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GLOBALISATION
IS A THREAT TO AFRICA'S POVERTY TRAP
By Njualem Columbus
It is unrealistic to think that African nations will break out of the poverty trap simply by implementing liberal economic reforms. Until the rules of international trade becomes clearly defined and fairly applied, most African economies will continue to suffer from poor economic growth and underdevelopment.
Economic experts have expressed the greater need for African societies to integrate into the global economy to avoid the disaster looming in the horizon. According to the UN population projections, the population of Africa may reach 1.8 billion in 2050.If current levels of low economic growth persist, the vast majority of Africans will remain desperately poor throughout this century and the wealth gap with other regions of the world will widen.
Therefore Africa faces quite a bleak future unless its leaders undergo a fundamental change in perspective. With the continent 's population forecast to continue to grow at a fast rate, in the absence of substantial economic growth, development per capita income in the region will fall and endemic poverty will increase in the coming years, with dire political and social consequences for ordinary people.
Apparently most African nations especially those in the sub Saharan Africa region lack the internal capacity to achieve the high level of sustainable economic growth to bring prosperity to their peoples. Experts who previously thought that Africa can overcome undevelopment through liberalisation have increasingly found this theory unrealistic. How can agrarian societies, unable to produce even the most basic technological facilities, face open and unprotected competition from firmly established economies?
No nation in contemporary history has developed in isolation from the international economic system or without trading. None of the Asian countries that have reduced poverty during the past three decades achieved their economic growth by relying solely on internal resources. Economic success has reflected openness to trade and the acquisition and adoption of modern technology.
What Africa needs is industrial revolution- that is the swift reorganisation of society for maximum economic production? More precise transition from a traditional agricultural society to a modern industrial one relies on modern industrial machinery rather than simply tools. The application of technology not only increases productive capacity but also bring about important economic and social changes especially in the ways that production is organised and society structured.
Since the industrial revolution started in Britain in the mid eighteenth century and spread rapidly across Europe and America every society has develop materially and undergone some form of industrial revolution.
The principal agents of industrial revolution are the bourgeoisie-entrepreneurs and financiers- who set-up, owned and operated modern firms that brought together the factors of production i.e. land, labour and capital. Principal motives of firms are to make profit. To this end firms constantly adjust the factors of production to make changes to attain higher productivity in order to survive and prosper in competitive markets. This competitive drive for innovation and greater efficiency is the major motivational force behind capitalist development.
The development predicament of African nations is that they do not have strong indigenous bourgeoisie group capable of bringing about an industrial revolution. There are few entrepreneurs able to establish modern firms that adopt and grow using capital and labour efficiently. There exist throughout the region numerous small -scale. Businessmen making a living in agriculture, retail services and some cottage industries, but very few have the capabilities to evolve into mass manufactures.
The weakness of the private sector in Africa is partly due to governments continuing to obstruct the emergence of the bougeoisie. It is an irony that the countries that most need a vibrant private sector are the very ones that place most obstacles in fronts of entrepreneurs. It is far more difficult to set up new formal sector business in most African countries than elsewhere in the world.
But the real problem is not the failure to liberalise and open up to the forces of globalisation. Many African governments have over the past two decades introduced significant free market reforms but unfortunately there have been little or no competitive response to these forces. Few new industries have emerged and existing ones have not been upgraded. As a result Africa has largely been bypassed by the global production networks that have been crucial in developing industries elsewhere especially in Asia.
Clearly African governments must do more to create environments conducive to local production and there is much room for the global economic system to be made fairer through trade reforms but unless there exist enterprises on the ground in Africa, Capable of taking advantages of the changes, the results are unlikely to succeed .there are barely few firms in Africa that are designed to operating under competitive market conditions and able to response to changes in market conditions. This is the continent greatest economic weakness.
TO BE CONTINUED IN THE NEXT EDITION
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