A developmental state: Lessons from China

The recently concluded China-Africa Think Tank forum which took place on April 14-16 in the Chinese city of Yiwu – which I did attend as one of the presenters on our development path – and which was attended by large numbers of African and Chinese academics and practitioners, brought to light serious flaws in Africa’s development agenda, and the need to rely on other models of development to spur our own development. This has not worked for any country/continent and will certainly not work for Africa. Yes, Africa is not the same and although some western pessimists want to believe the contrary, this is a continent on the move. The train left the station as the adage goes. Question is to where, and how fast? This is a million-dollar question facing African policymakers, whose policies are either too academic to capture reality on the ground or even a face-saving exercise of appeasing development partners who demand these policies as a precondition for financing. Policy failure in much of Africa has been blamed on lack of political will to pursue the designed policies; weak institutions to pursue the same; lack of qualified, competent and independent implementers, and social capability to that end. Not so in China where the political will is given through their political setup which, although was denigrated by many in the west in all sorts of manner and called all sorts of names, has delivered for Chinese. It is the same western people that now court China for their various economic interests never mind that, in the yesteryears, this is a country that was labeled communist, socialist etc, and anyone working with it was as ‘bad a guy’ as the very system they ostracized. Africa not a country The theme of the “China-Africa Production Capacity Cooperation and Africa’s Industrialisation” think-tank forum was viewed to be a win-win for Africa and China. Consensus as to the strategic relationship between Africa and China is certainly shared by Africa’s policymakers, business leaders and academics. All these parties are not only opinion leaders and movers in their own right and areas of influence, but also if properly coordinated, can make the best of this relationship. And whereas China certainly knows the best it seeks from this strategic relationship, the views expressed in this think-tank gathering show that Africa may not know what it wants to gain from this strategic relationship. It is not finance, relatively cheap goods and machinery, or capacity. It should be more than this. More so, it should be country specific. The biggest mistake often committed in such fora is that, Africa is treated like a country. A simplistic view that has been held dear even in the west, and one which we Africans have not been able to dismiss yet it negates the essence of each country and diversity in everything from leadership and culture to levels of development and attendant constraints. And so, we end up getting the theme ‘Africa’s Industrialisation’… This is deceptive and simplistic and in a way does not allow the opportunity to confront the real problems facing Africa in general (thanks to the one-size-fits-all Africa mindset). SAPs and Africa’s industrial demise It is worth recalling that Africa’s industrialisation was devastated by the SAPs (Structural Adjustment Programmes) advocated by the World Bank, IMF and other multilateral and bilateral development partners which advocated for privatisation of nascent African companies in a bid to save finance for other development priorities. These African industries were in perpetual loss making mode mainly because of managerial deficiencies and colonial manipulations that aimed at creating markets for their own goods and services. Fulfillment of SAPs’ conditions was a fundamental prerequisite for funding of Africa’s development agenda, that never was. Instead this turned Africa into a net-importer of everything, from bread to butter from western companies either based in Africa or sometimes shipped straight from the west. This situation persists today in most francophone Africa. But this is pure hypocrisy for even western industrial development was state led and diversification/privatisation was more orderly phased, with the few exception of the UK under Thatcherite privatisation policies that proved disastrous to the UK economy. Industrial development has to be state led, and although private sector needs to be partners in this, the state must guide this sector, and mobilise affordable and long-term finance for its development. Leaving it to the private sector alone leads to unstructured development of this very sector. Africa will never solve the balance of trade deficits under the prevailing economic structure of agro-based production and commodity exports. Import substitution and export oriented industries are the only solution. This is where China’s strategic relationship would make a difference but only if each African country drew a master plan for their industrialisation and sequencing of such industrialisation which will necessitate modernisation of our agricultural sector which will, in turn, avail raw materials from such industries and at the same time provide a market for goods and services to the same industries. This completes forward and backward integration process, critical for sustainability of such an industrial policy choice and through this, sustained high levels of growth and thus development. It is a choice Africa should have made yesterday, for literally the entire continent is paying the price of not doing so, instead of relying on commodities trade that proved a total failure both under colonial administration and now under Chinese-Africa strategic relationship. Revisiting Africa’s strategic relationships, whether with China or the West, is a policy choice African countries need to undertake. The writer is an economist and financial expert. Email: nshutim@gmail.com. To be continued…

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A developmental state: Lessons from China