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Achieving Rapid Industrialization

This Space is For Sale

This Space is For Sale

Achieving Rapid Industrialization

Otega Ogra

In almost any summit as with most economic conversations, catchphrases around the fourth industrial revolution, the rise of tech in Nigeria and Africa (in this age of the Africa Continental Free Trade Area) are bandied around. Therefore, as I sat in the audience with over a thousand business and political leaders from across Africa at the last Africa CEO Forum in Kigali, I listened with intent as speaker after speaker made pitches for more Intra-African collaboration and investments in basic industries. Some were very innovative; others were rehashed, old and tired tropes on development – depending on what side of the divide they belonged. 

A lot of questions were raised some of which I have highlighted below:

  1. What really is Nigeria/Africa’s greatest need? The fourth Industrial revolution or jobs for its every growing young, unemployed/underemployed population?
  2. The West or China? Where do we pivot to achieve rapid industrialization? Is there even need for a pivot?
  3. Development Programmes vs. Agriculture vs. Investment in Factories & Basic Industries. What do we do?

Nigeria, and Africa with a population of almost 200million and more than 1.2billion people respectively is one region that cannot be ignored. Yes, we may be beset with high youth unemployment, higher poverty rates vs. the rest of the world and mostly weak governance systems, but the past two decades have shown a determined people committed to a paradigm shift – no matter how subtle they may be. Africa has moved from being the land of despair to one of opportunities. 

According to the Billionaire industrialist and founder of Nigeria’s BUA Group, Abdul Samad Rabiu, Africa has everything to industrialize and the opportunities are endless. He should know. He has built one of the largest industrial and diversified companies in West Africa across manufacturing, infrastructure and foods yet; he is of the opinion Africa has not even scratched the surface of its potential. “The world is coming here; African Governments, the Private Sector and DFIs need to look inwards, get our acts together and collaborate to rapidly industrialize and move the continent forward”, he said during a recent TV interview.

Can Africa do it alone? Evidence suggests that it may be possible but at a cost. This cost could manifest in time, more people put into the unemployed pool in the short term, social instability and insecurity. It can however be done. Some have even gone ahead to suggest that the strides Africa is making in tech, creative industries and medium scale businesses will be the solution to the industrialization problem. I beg to disagree. Never before in the history of the modern world has any great nation been built on the back of service-based industries. They just do not provide scale enough to move prosperity of the mass. From the discovery of the printing press to steam machines to nineteenth century America, the Asian big weights and more recently, China, there has been one common factor – FACTORIES

Providing Infrastructure and the mass creation/influx of factories, alongside agriculture/food production and investment in education provide the quickest route to move a large number of any population out of poverty.

Nigeria and Africa occupy a very important place in history when it comes to rapid industrialization and by virtue of this, we can and must do things differently so that our experience may be better and the results less negative. We can borrow from previous models that have worked – be it in China, the rest of Asia, the Middle East or the West and build our own systems of checks and processes that will make it work better for us. We will need to create ecosystems that ensure the sustainability of the sectors that need the most interventions and in some cases, provide necessary government support whilst also ensuring that we meet minimum standards to protect the environment for the future. 

I know a couple of people would have winced at the mention of government support or intervention but I’m yet to be aware of any rapidly industrialized nation whose government has not or does not support growth of its key industries one way or the other. What is most important is that the governments of Africa must know when to step back and allow positive regulations to guide players in these industries with minimal intervention. 

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Case in point is the rejuvenation of the Nigerian cement industry – once heavily reliant on imports to now being a net exporter of the product because of a government-led backward integration policy. This Nigerian industry has created alongside it, allied industries and massive employment opportunities and a similar initiative is now occurring with Sugar. As Aliko Dangote or Abdul Samad Rabiu will tell you, there are still millions of jobs to be created and money to be made using the basic factory and industry models. Rapid Industrialization can and will be done. Africa needs to be more open to letting the factories in and letting them thrive.

To paraphrase Irene Yuan Sun from the book, “The Next Factory of The World”, “For years, Africa has been the premier testing ground for various ideas about poverty alleviation. These programmes will not create 100million jobs and lift half a billion people out of poverty. If we are serious about raising living standards across this vast region of the world, it is time to try something new. That something new has started moving to Africa: factories.

Bottomline: There is a need to leapfrog innovation but beyond that, Africa has untapped potential in basic industries and industrialization that can provide badly needed jobs for its ever-growing young population.

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