• Sanusi dismisses single currency initiative
TO achieve accelerated industrial growth, African nations should urgently begin review of their economic, financial and political policies and tailor them towards attracting foreign investments.
This is one of the views of participants at the ongoing Sixth Joint Yearly Meetings of the African Union (AU) and United Nations Economic Commission for Africa (UNECA) Conference of African Ministers of Finance, Planning and Economic Development in Abidjan, Cote d'Ivoire on Monday.
Also at the event, the Governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, dismissed the idea of single currency, saying Africa should rather, devote its attention to boosting intra-African trade, which according to him, is at its lowest ebb, improving infrastructure and enthroning right leadership.
Global interest in the continent and recent indication that some of the fastest economies in the world are in Africa, according to the participants, point to Africa's potential for economic and social transformation, but each country has to tell her own story and thereby shaping Africa's future growth through structural transformation.
At the opening of ministers' conference Tuesday, President of Cote d'Ivoire, Dr. Alassane Ouattara, Chairperson of African Union Commission, Dr. Nkosazana Dlamini-Zuma, United Nations Under-Secretary and Executive Secretary of ECA, Dr. Carlos Lopes and other panelists agreed that there is need for paradigm shift in policies of African nations for large-scale industrialisation to take root on the continent.
On the theme of the continent, "Industrialisation for an Emerging Africa," Ouattara observed that industrialisation has not been successful since the time of independence.
According to him, from the 60s and 80s, Africa tried import substitution, but the policy failed. "From 80s, we changed economic policies, focusing on promotion of private sector – privatisation and decreasing governmental control on economy, but overall, this too has not been successful, even though the share of industrial sector as a percentage of Gross Domestic Product (GDP) was six per cent in 1970's and it grew to 15 per cent in the 90s. This is not enough. We must do more and better," he said.
Ouattara of Cote d'Ivoire said his country has adopted a development plan to make the country better by 2020. He asserted that in order to be successful in the area of industrialisation, Africa needs political stability and a conducive environment for savings and investments.
Dlamini-Zuma called for tackling the root causes of conflicts on the continent. "We need a paradigm shift from the way we see our economy and political problems in order not to let others dictate our paradigm to us. African population is growing very high. Between 1995 and 2006, Africa has imported $50 billion of processed foods while we have exported $21 billion of crude crops. This creates deficits and a threat to food security on the continent," she said.
Sanusi argued that the finance for industrialisation in Africa is not the problem, but deficit of the right policies and good leadership.
"What the private sector wants is the enabling environment. For example, provide industrial cluster area, power, infrastructure, security, provide access to market and the right track and channel of incentives. When you will have a problem is when you will think that you need private capital coming to invest in an environment, which is not conducive.
"My stand is that the governments should focus on right policies and providing the enabling environment, infrastructure, technology, technical and vocational education. If we can do that, the private sector will deliver."
He said his biggest worry in Nigeria in the last four years is that the government cannot continue to spend 70 per cent of budget allocation on salaries or spending 80 per cent of recurrent expenditure on overhead.
He said Nigeria must continue to increase spending on capital expenditure, unlocking the bottleneck to production, stop spending huge revenue in subsidising petroleum consumption.
On leadership deficit on the continent, he said the leaders must develop the continent as a whole since one country cannot develop in isolation of the other.
He said it was not how many years African leaders stay in office that matters, but what they do in office within the shortest period of time.
On common currency, Sanusi said it is of no benefit to member-states now, owing to the fact that the percentage of trading among them is less 10 per cent.
"You can't talk of single monetary currency or monetary union if you don't have economic integration. Theoretical you have a single currency because you want reduce transaction cost and now you give monetary independent if you have huge transaction cost. Now you are not trading with someone, what is the benefit of having single currency?" he queried. It is ideal or is an aspiration, but people should understand that central banks can not by fiat come out to give us a single currency, otherwise we will have a Euro crises or wars."
He called for increase in trading activities, free movement of people and goods to enhance integration on the continent.
The Guardian