Africa must speed up - Prodi

Africa must speed up its transformation because the continent cannot keep its current rate of growth at 5 percent if it wants an enormous change in its economy, Romano Prodi, chair for Sino-European dialogue at the China Europe International Business School (CEIBS), has said.

Speaking in an exclusive interview with the B&FT in Accra, the economics professor and former Prime Minister of Italy said economic integration and the creation of a common market in Africa are fundamental to the continent’s prosperity.

“If there is anything I will say is a priority, it is the creation of a big internal African market. I appreciate that the African Union cannot be at par with the European Union. But if you don’t create a common market and strong cooperation politically and economically among African countries, you will never have a prosperous Africa.

“Even in the biggest countries like Egypt, South Africa and Nigeria, their national economies are not sufficient to create a modern economic structure. They are not big enough. In Europe no one country, not even Germany, can win in the global competition alone. So the same rule applies to Africa,” he said.

“As the former chair of the European Union Commission, it was not easy giving money to the African Union to enable the creation of a political union. “I did it because I was convinced that there was the need for a political union – which was very difficult even in Europe – and for institutions that can help the dialogue for an economic union, so that the flow of goods, capital and people among African countries can be free,” he added.

But to shape a huge common African market, it is not enough to make institutional agreements to change the rules, Mr. Prodi said, but it is also very important to have infrastructure.

“If you have 54 different economies in one continent, you will never have a sound manufacturing industry. The other step is to link development institutions to shape a huge common African market.”

Mr. Prodi, who is also the United Nation’s Special Envoy to the Sahel, urged African governments to improve governance, boost foreign direct investment, raise productivity, and expand industrialisation.

“Solving the problem of governance is an absolute condition for an increase in foreign direct investment. In the present phase of Africa’s economy, getting these two right is indispensable for the growth of the continent. This is because they bring technological progress and open the markets.”

He suggested that the continent has to learn from China, because the contribution to the change of China by multinational companies has been remarkable.

Addressing the structure of African economies, he said: “Two-thirds of the population is still in agriculture; this is not right for productivity. A big part of that population must move into other areas. You must not only develop services but industries as well. But if you want to develop industry, you must have a big trade and economic area all over Africa.”

Yet even as he saw many critical challenges confronting the continent, Mr. Prodi was upbeat about the future of Africa, whose economic growth is the second-fastest among the world’s major economic regions.

“Change is coming for the first time. Before, the situation was desperate, but now there is a young generation of entrepreneurs who are working hard to bring change. Also, to have this calibre of business school, CEIBS-Ghana, in Africa is a signal of a new trend in education, culture and so on.”

He said the task of the school is to teach, but its great contribution is to not just teach a new generation the rules of trade, economy and business but also the rules of governance, and the difference between business and politics – which he described as “one of the more delicate problems for Africa.”