As developed countries are struggling to find the level of economic growth that characterized the pre-financial crisis period, the African continent is driving world growth. This situation should enable us to design new approaches to growth if we want this opportunity to last.
But sticking to the same recipes that have now shown their shortcomings would only result in the same issues. New models of growth need to be different; they need to create employment – we have no choice. More than 500 million Africans depend on us.
Some of the financial models invented in the 1980s analysed salaries as liabilities that could be reduced to increase share prices, but as Mukhisa Kituyi, Secretary-General of UNCTAD, recently articulated, we should reconsider the role of wages “less as a cost of production and more strategically… as the main source of demand”.
If we do not provide our people – and especially our youth – with business opportunities and decently paid employment, we will not only limit their consumption capacity, but also deprive them of any hopes of being part of a future they can be content with. Such exclusion will lead to social unrest, not for political reasons, but because of economic and social frustration. The scale of this potential crisis is difficult to apprehend; if no action is taken, we can safely assume it will agitate our 1 billion-strong labour force and have a global impact.
However, if we provide young Africans with opportunities to create wealth, the continent will be able to drive international growth, thanks to its own growth and consumption, and its need to partner with others to build the future.
Such wealth creation can only happen through industrialization. This may not be the same industrialization as Europe has known in the past centuries, but one that grows around new technologies, an integrated agricultural value chain, and new products and services that Africa is well placed to invent. This process will rely on enlarging the markets, something our own regional integration efforts make possible. For instance, the Economic Community of West African States (ECOWAS) creates a market of 300 million people, as opposed to the 6.2 million that my country, Togo, offers. By focusing on regions and their real potential, we can also identify the specific needs of such regions, which often share many similarities in domestic demand.
We, as governments, need to encourage and facilitate this regional approach by harmonizing our legislation and standards, removing non-tariff barriers and investing in infrastructure. If we can create a regional environment that is conducive to development, I am confident we can create a virtuous circle that satisfies the needs of all. Our people will have access to the goods and services they need, as well as to employment and business opportunities; our regions will experience more harmonious relations; and our investors will find partners and conditions to create sustainable growth and share the benefits with their shareholders.
I am aware that this thinking might seem ambitious, even idealistic. Bold and courageous action is required, possibly even to change some of the rules of the game. It is my belief that the World Economic Forum on Africa 2014 is the ideal place for the continent to articulate its needs and preferred ways of meeting them, with resultant benefits for all.
Author: Faure Gnassingbé is President of Togo
Image: Traditional dancers perform during the inauguration of the new African Union (AU) building in Ethiopia’s capital Addis Ababa, January 28, 2012. REUTERS/Noor Khamis