Because Africa has many other opportunities. It doesn’t need to focus on the export of soft commodities as its primary goal.
Are you suggesting that Africa can downplay commodities like cocoa, cotton and others and concentrate on other opportunities?
Yes. First, there are commodities that Africa, because of its monopoly position, should be able to get better deals from, like cocoa. Second, it’s a lost battle because Europe will not give up. And third, the future of Africa is not in soft commodities; the future of Africa is in industrialisation. Yes, we need to produce agricultural products big-time – but for Africa.
But can you separate industrialisation from a focus on soft commodities?
No, I don’t separate the two. If we are saying industrialisation in Africa is necessary, it will be commodity-based. That includes soft commodities, but a few, not many. Like cocoa and cotton. You can even think of sugar. There is a market for it. But for the rest, the agricultural production of Africa should turn into Africa consumption. I hate to use the term ‘world food security’ because it carries a lot of baggage. It immediately connotes we are taking care of people affected by drought. It’s much more than that. It’s about creating a market for consumption of agricultural products in Africa.
Back to integration. It appears that there is more activity at the regional level than at the continental level.
Well, the African Free Trade Zone initiative says it very clearly that the future will be through regional blocs, the regional economic communities. The problem we are facing right now is that the regional economic communities are in different speeds. From the most exciting East African Community to the Maghreb Union, you have very different dynamics going on. What investors would like to know is that whatever I invest in Country A is going to have the possibility of flowing in whatever direction it flows. They will say, OK, this is a key port, a key city, a key industrial hub, a key IT innovation centre – that is very powerful. And if you sell it as part of an Africa-wide approach, that’s very attractive.
There appears to be a lot of emphasis on foreign direct investment in Africa. But intra-Africa trade is only about 12% and…
Well, again, 12% measured how? Which statistics?
That’s coming from your institution.
The majority of the intra-Africa trade is informal. Everybody knows that. You just go to any important border crossing. See what is going on there and you know that 80% of the transactions are informal. This is the border post, and what about those that don’t even go through the border post?
So you believe that intra-Africa trade is more than 12%?
I think it’s officially 12%. But this has to be qualified with two footnotes: firstly, it doesn’t include the informal transactions, and secondly, the statistics are old. This is the reality. But there is no doubt whatsoever that it’s way below what it should be.
The Continental Free Trade Area by 2017 – is that expected to help intra-Africa trade?
It’s a political tag. For me it expresses ambition. In these days, any expression of ambition on the part of African leaders has to be taken as a good sign of self-confidence. But technically, it’s very difficult.
Currently, China is Africa’s biggest trading partner. Many believe the Chinese are taking more than they are investing.
The African Union has taken a decision. They have put a brake on new partnerships and called for a review of the existing partnerships. When I talk about China’s relations, I like to throw one number which tells the story: the totality of Chinese investment in Africa is 5% of Chinese investment in the world.
That’s quite small.
It’s very small; but we make a big fuss of it. If you compare the last 10 years – the increase in Chinese investments in Africa with Chinese investments in Latin America, Asia, Europe, even in the US – which one comes last? Africa. So we need to stop the easygoing bashing. The Chinese economy is occupying a much different size in the world economy and Africa is part of that trend.
Finally, what is your vision for the African economy?
I have no doubt that Africa will emerge. If we use that expression emerging economies, Africa will be a strong, emerging economy. I have no doubt that by the year 2040 most African countries will be middle income and we will have the largest work force of any continent, and the youngest.
This article was first published in Africa Renewal