Lessons from commodity price fall

IT MAY sometimes sound awkward to positively mention both Zimbabwe’s President Robert Mugabe and President Ian Khama of Botswana in the same communication. But somehow, they should have been able to complement each other in dealing with their countries’ long-term economic challenges. One of those challenges is how to deal with the growing threat of unemployment, even though the scales of the problem are very different.

One of the issues we raised in our edition of Southern Times last week was the inevitable fact that natural resources, particularly minerals, are finite. This calls for their judicious exploitation and prudent use of their proceeds against pressures to lift the lot of the rural poor out poverty.

It was then deduced that African nations need to diversify their economies going into the future, and move away from “monocultural” dependency – diamonds in the case of Botswana. That requires a new set of skills for Africa’s growing population of young graduates.

One of the lasting messages President Mugabe tried to hammer on his fellow African leaders during his chairmanship of both SADC and the African Union was the need for beneficiation and value addition of primary resources, be they agricultural or minerals. This, he said, would enhance their traded value on the market, create employment and minimise loss of foreign currency reserves through avoidable imports.

On the other hand, Botswana’s almost miraculous economic growth in the past 50 years since independence in 1966 has been driven exclusively by its vast diamond wealth. And it has managed to build reserves of nearly US$12 billion. But they also don’t last forever, and are not creating sufficient jobs for the nation’s graduates who street-walk without finding employment.

A prominent lawyer and businessman in Gaborone David Magang noted in a recent interview with Reuters that: “Modern economies are propelled by people who have been properly-trained.

One of the mistakes we made is not training people to be doers and creators.” In other words people go to school in the expectation of later looking for a lucrative white collar job, rather than creating one.

Unfortunately, the same can be said of all former colonies in Africa. The continent produces graduates who are neither properly-trained nor have any skill to survive on. They are not entrepreneurs. They expect their government to create employment as a right.

This is a challenge most acutely felt in Zimbabwe where thousands of graduates leave the country’s more than a dozen state and private universities annually but find themselves roaming the streets with no jobs and with no idea of how to sustain themselves.

The government has recently tried to react to this inadequacy by refocusing its education curriculum with an emphasis on science, technology, engineering and mathematics or STEM subjects. Although it was almost a panic response to the time-bomb of unemployment, it is a case of better late than never.

The key objective of the policy is to eventually produce graduates who can solve problems by themselves, use their training to start businesses, are doers and creators and in the end appreciate the importance of value addition and beneficiation of the country’s natural resources.

When Zimbabwe’s new black farmers start maximising production, this should generate raw materials for the graduates to add value in a diversified economy, or take up farming themselves where they can deploy their newly-acquired skills.

Far better than Botswana, Zimbabwe is endowed with a lot of minerals which are exported cheaply in their unprocessed form. It has suffered the consequences following the collapse of primary commodity prices on the international markets along with Nigeria and Angola (oil) and Zambia (copper).

A land reform programme launched in 2000 to correct colonial property ownership rights has suffered from lack of adequate financial resources and skills training for the new owners.

The way forward for Africa is self-evident: proper training of manpower to produce; diversification of economies and beneficiation of natural resources. Africa cannot forever be a source of raw materials to the world and hope to develop.

October 2016
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