Can Africa Be the Next Asia?

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Kingsley Moghalu

AKingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria, Professor of Practice in International Business and Public Policy at Tufts University’s Fletcher School of Law and Diplomacy, and former senior United Nations official, is the CEO of Sogato Strategies, a strategy, risk and public policy consultancy. In this thought-provoking essay Dr. Moghalu, who ran for election as President of Nigeria in the country’s 2019 elections, examines Africa’s development prospects from the perspective of a recent international dialogue on The Asian Aspiration.

The rise of Japan after World War II, China in the past 40 years, and several other East Asian nations, has clearly made the 21st century an Asian one. In the span of a generation, the lives of more than one billion Asians have been transformed from one of poverty to that of prosperity. Global power, certainly economic power, is heading from the west to the east. As the world looks with admiration at the rise of Asia, even if with important caveats, the question is whether Africa, the last remaining holdout of mass poverty in the world, can or will be the next Asia. This is at once an essential question and a fascinating human story of possibilities.

For three days in late September at the Villa del Collina overlooking the beautiful Lake Como, an hour from Milan in Italy, a number of retired-but-not-tired African presidents and 30 development thinkers and practitioners, diplomats, and emerging political leaders in African countries dissected and reviewed the manuscript of “The Asian Aspiration”, a forthcoming book that seeks to provide answers, or, at least, clues. The dialogue was convened by the Brenthurst Foundation, a Johannesburg-based public policy think tank established by the South African billionaire Jonathan Oppenheimer. It was hosted by the Konrad Adenauer Stiftung, the foundation named after the renowned post-World War II German Chancellor. Villa del Collina was Adenauer’s holiday retreat away from Germany, later purchased by the Adenauer Foundation well after the Chancellor’s death.

The “Can Africa Be the Next Asia” dialogue, held under the “Chatham House” rule of no-attribution to individual speakers, was jointly chaired by Nigeria’s former President Olusegun Obasanjo and Ethiopian former Prime Minister Hailemariam Desalegn, with former Sierra Leonean President Ernest Bai Koroma also participating. Greg Mills, the Executive Director of Brenthurst Foundation, Obasanjo and Desalegn, and Emily van der Marwe of Brenthurst are the co-authors of The Asian Aspiration. President Obasanjo is the chairman of the board of trustees of Brenthurst Foundation, and Prime Minister Desalegn a member of the board.

So this project is part of a continuing collaboration by the three men in seeking and offering pathways for progress by African countries, and builds on two previous books with Mills and Obasanjo among the co-authors: “Making Africa Work”, and “Democracy Works”. There is no better contribution ex-African presidents can make to the continent than constantly being open to new thinking, engaging in policy formulation work, and advising present and rising generations of leaders and public servants based on their experience as the ultimate leaders in their countries. That experience, it must be said, includes the lessons from the mistakes and failures of these former leaders. The matter of leadership mistakes – “looking back” — was therefore not left out of the Lake Como deliberations.

The Lake Como Dialogue wasn’t dominated by the usual foreign experts, although the group was well-balanced with participants and perspectives from Asia, Europe and North America. A number of new-generation political leaders from African countries such as Malawi, South Africa, Tanzania, Zambia and Zimbabwe also participated. Present company included, most of this group of participants in the Lake Como meeting have in recent years been candidates in presidential elections in their countries. They all are dissatisfied with the habits and systems of the status quo that have kept most African countries poor, economically unproductive, and their societies ethnically polarized and unstable. Their participation in the Lake Como dialogue was a breath of fresh air different from meetings dominated by government officials that are more remarkable for recitations of the party line than serious thinking and free discussion.

The manuscript of The Asian Aspiration has case studies of 10 countries in East Asia: China, Indonesia, Japan, Malaysia, Phillippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Since 1960, the GDP per capita in sub-Saharan Africa has dropped by nearly half while that of East Asian countries has grown in leaps and bounds. Nigeria is a good example of development stasis and retrogression. The country’s average nominal GDP per capita between independence in 1960 and 2018 is $1736 according to the International Monetary Fund. It is ranked 157 out of 189 countries in the Human Development Index of 2017. In 2018 the World Bank ranked Nigeria 152nd out of 157 countries in its Human Capital Index, and is now ranked the “poverty capital” of the world by the World Poverty Clock, with 92 million of its 200million people living in extreme poverty. All of this is largely due to poor governance and weak, market-unfriendly economic policy and business environments.

Why would African countries aspire to be like Asia? In the first place, should they? No two countries or continents can be exactly alike. Africa should seek to be a much better Africa, not an Asian clone, just as the latter developed on its own terms and with its own unique identity. But there are many lessons to be learnt from Asia, and African countries can certainly apply “translative adaptation” (taking ideas from elsewhere and adapting them to unique, local environments) as Japan did in relation to the western world.

Culturally as well, Asia is much closer to Africa than Europe or the United States. Broadly speaking, cultures in Africa and Asia are more communal than individualistic, as is the case in the West. Most of the East Asia countries examined in The Asian Aspiration were once colonies of foreign powers, just like African countries except Ethiopia and Liberia. More important, East Asia has achieved development largely within a span of 50 years, the same period in which African countries have ostensibly had political independence but were unable to translate that into economic transformation.

Against this backdrop, there is every reason why Africa should want to be the “next Asia” development miracle:
•Asia achieved rapid poverty reduction and transformed millions of lives within a generation.
•Asia has achieved manufacturing-led export growth, while Africa’s industrial productivity has declined.

•Despite corruption and authoritarianism, East Asian countries have successfully demonstrated an effective commitment to the popular welfare of their citizens. East Asia has achieved low unemployment, high levels of skills development, and markedly improved their rankings on the Human Development Index.
•Asia has attracted stable foreign direct investment (nearly $6 trillion over the past decade, mostly in China), with Africa attracting just $50-60 billion.

•Africa has a population problem, with 1.3 billion people, projected to double by 2050, and with 70 per cent of its youth population unemployed. With real development, the continent’s youth bulge could explode, with extremely negative social and other consequences.

The Asian Aspiration study found that the five key takeaways from Asia’s development experience are that, first, it takes time, especially to build skills and institutions, both key foundations of development transformation. This means that there must be a focus on these goals, and that focus must be consistent in order to yield results. But this shouldn’t be an excuse for non-performance in governance. It is wrong to argue, as some African governments do when confronted with their failures, that “Rome was not built in a day” when the right focus, effort and consistency are absent in the first place. Rome may never be built in that scenario.

Second, there will difficult trade-offs and hard choices. African governments often are unable to make the right priority choices and stick to them with discipline. Third, a healthy private sector is essential for real, transformative development. Governments must create this space. Where government economic policies, with an eye on short-term goals and populists considerations, squeeze the private sector, it will be hard to achieve development goals because the right incentive drivers are absent.

Moreover, few African states have capable states with strong technocracies as Asia has, in order for the state to play its role in development effectively. The absence of technocratic states has resulted in rent-seeking private sectors – capitalism without strategy – in which robber baron capitalists manipulate governments for the benefit of their business bottom lines, but inclusive wealth creation across markets, sectors and workers is not happening.

Fourth, competition is crucial, and it must be built on a bedrock of innovation, infrastructure, and integration between infrastructure and markets. Lastly, not all lessons are worth learning. Asian growth has often happened in the negative contexts of political authoritarianism and environmental degradation. These characteristics should not be examples for African countries to adopt. Rather, they are lessons about what to avoid in Africa’s growth path.

This study of East Asia’s economic miracle suggests other important lessons. African countries must avoid a singular focus on natural resources. They should not mistake trade for development. They must avoid high-debt infrastructure growth, and avoid the temptation to pick “winners” in industrial policy. Import substitution is problematic, and is unlikely to deliver the results expected. Again, Nigeria serves as an example of the failure of the focus on import substitution instead of focusing on endogenous productive competitiveness.

Agriculture played an early, critical role in the East Asian development story, but only because it was broadly well managed and strategy-driven, with varying degrees of success across the region. East Asia’s stages of growth were, in ascending order: land reform, agricultural reforms that increased crop yields, universal education, light manufacturing, heavy industry, modern industry (IT and services), and economic and political liberalization.

Three final factors are make or break for Africa’s development aspirations. The first is the basic question: do Africans think? Of course we do. The question is: how? The African mind is the greatest obstacle to the continent’s development. Long-term strategic thinking and the discipline of execution, based on a philosophical worldview, must replace the continent’s seemingly innate tendency to short-termism and motions without real movement. The continent needs a new generation of political leaders with a world-view of transformation. Ethiopia’s contemporary leadership and its well-developed leadership selection process, with the country’s self-awareness of its place as one of the world’s oldest civilizations and a resolve to return to global prominence, is an example of this approach.

Ethiopia has a civil service university, which it copied from France and South Korea, and building a strong technocracy and bureaucracy has been key to its early successes in a journey of transformation.
Ethnicity is a threat, and should not be the basis for politics. Unity of purpose in African societies is essential for a successful development drive. Primordial radicalization should be avoided, and diversity should be managed in a sensitive manner. Unfortunately for Africa, ethnic radicalization is still very much the reality of much of the politics in African countries. This reality must be confronted if there is to be progress.

Finally, leadership is the missing ingredient that Asia had but Africa, with a few notable exceptions, still lacks. Objective and transparent parameters of leadership selection that balance competence, performance track records, with managing ethnic diversity remain key challenges. Leadership search, selection and process should become a conscious approach to having world-class leaders, instead of the current focus on corruption-fueled political maneuvering in Africa’s “democracies” that has proved so self-defeating for the continent. Africa needs the kind of “development-obsessed” leaders that Asia has had. East Asia’s miracle doesn’t tell Africa what to do, but gives helpful clues as to how to do it.