Will Africa really catch up after Corona pandemic?

Thursday, August 6th, 2020 00:00 | By
A banking hall. Photo/PD/FILE

At one time or another, nations and individuals confront moments of existential challenge that also open up new possibilities.

African countries face three possible outcomes post-Covid-19: play catch-up, stand still or fall even further behind the industrialised world. 

To avoid falling further behind, Africans must narrow the scientific and technology gap and leverage comparative advantages.

It is time for Africa to adopt radical technological and policy innovations. The global economy is increasingly driven by science-based and patent-intensive systems.

Through investments in molecular technology, AI and other technologies the fourth Industrial Revolution is ushering in, they can overcome existing barriers to entry.

India offers an example of how to catch up. There, two key developments in the 60s and 70s sharply altered the country’s trajectory.

In 1965, following past famines crises, India imported 250 tonnes of high-yielding wheat seed varieties for wide-scale testing on farms.

Early positive results led to the importation of a further 18,000 tonnes.

Within five years, the country produced enough grains to support its population and, following a drought in 1979, had no need to import grain.

Radical policy response to famine-induced crisis birthed the Green Revolution.

India’s pharmaceutical sector also experienced a crisis-inflection point in 1972, when the government passed the Patents Act, which enabled domestic firms to replicate drugs patented by multinational corporations.

Local companies have since dominated the global market through reverse-engineering leading to generic medicines far more affordable than patented ones. 

Africa processes a small proportion of its agricultural produce. We continue to export raw commodities that others process and re-sell to us at a higher valuation.

Our continent also has sufficient sunlight, wind and hydropower, technologies that can power Africa and other regions.

Critically, Africa has a median age of 19, a potential demographic dividend of young innovation-driven workers and a relatively small proportion of elderly workers.

This human capital will foster Africa’s forging ahead. If we fail to harness new technologies and leverage our strengths to create abundant high-paying manufacturing and service jobs to compete within global supply chains, then we risk falling even farther behind  socioeconomically.

To forge ahead, Africa will first have to return to economic growth. Diversifying economies will be critical, particularly for countries dependent on one or two mineral resources.

African companies must deepen capacities for competitive advantage to master new technologies in emerging sectors.

African innovators need a robust innovation framework and a better enabling environment to master the so-called industrial biology embedded in the fourth Industrial Revolution.

For instance, firms in Morocco, Senegal, Nigeria and other African countries have developed Covid-19 test kits but face a difficult path to commercialisation.

China’s response to the pandemic is illustrative of a dynamic industrial policy. It is targeting ambitious increases in domestic firms’ share of the global medical supplies market.

The government has provided cheap land for factories, subsidised loans to secure a supply chain of raw materials, and to stimulate domestic demand by incentivising hospitals and companies to use their products.

There are powerful examples right here. South Africa successfully financed production of  the National Ventilator Project to address Covid-19, developing prototypes, securing component supply chains, and a manufacturing facility.

The project owes its success in part to strong government support and broad coordination among economic and technological agencies.

As such, the rest of the continent would benefit from strong innovation systems that are part of national budgeting and planning frameworks.

African businesses have a critical role to play, but so do African leaders, who must strike a delicate balance between state intervention and open markets. — The writer is  senior special adviser on industrialisation to the President, AfDB

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