A Growing and Diversifying Continent: Africa’s Place in the World

15 May 2013 - “It is a very interesting time to be in Africa.” With these words renowned economist and CEO of Pan-African Capital Holdings, Dr Iraj Abedian, initiated a thought-provoking conversation with Nelson Mandela Bay business leaders and academics. As part of the next installment in the NMMU Business School’s Strategic Conversations anthology, the discussion, that took place on the 15th of May 2013, centered around Africa’s place in the world economy and what business leadership should, and could, do to improve Africa’s economic development.

Dr Abedian began the conversation by stating that a “structural break has occurred in global economic growth and trade patterns,” while at the same time, “Africa’s economic performance has taken a turn for the better.” Interestingly, research found that developing or emerging countries along with advanced countries growth trends have “decoupled post the 2000s”. According to the IMF, global growth projections indicated that developing/emerging countries will by 2016 have a 6% growth rate; while it’s projected that advanced countries will only be maintaining a little over 2% growth. However, Dr Abedian cautioned that, “advanced economies will never be insignificant”.

With various global economic crises gripping some of the world’s economic powerhouses it was encouraging to hear that “Africa’s GDP is rising so sharply that African countries can account for a large share of the fastest growing countries in the world” if one consults the 2011-2016 growth rate. African countries within this group are: Ethiopia, Mozambique, Zambia, Ghana, Angola and Tanzania.

However, as with any country there are certain problems and issues, infrastructural as well as societal, that can hamper growth. In the case of African countries, Dr Abedian stressed two critical issues: the role of ethics and having a moral framework, and Africa’s colonial mind-set. “We need to overcome our colonial mind-set,” he emphatically stated. He continued by saying that this colonial mind-set creates trade boundaries and ultimately it not only hampers economic growth but also investment opportunities.

Other issues highlighted as hindering investment in Africa, included: severe food security risks; lagging infrastructure coverage, including hard infrastructural issues and soft issues that encompasses people-related problems like corruption; problems with energy supply and transport infrastructure; uneven distribution of airport hubs; and the digital divide experienced by Sub-Saharan Africa.

Dr Abedian also discussed the role of business schools in improving Africa’s development. He believes their role is to clarify categorization, research how to initiate economic growth in Africa by recognising problem areas, finding a way around these factors and ultimately finding a solution. “Academia has a role to play. Academics should strive to stimulate intellectual inquiry of students who are future business leaders,” he commented.

Dr Abedian concluded his highly informative discussion by again cautioning that “the achievement of Africa’s developmental objectives remains distant as long as food and various infrastructure needs … are not addressed.”

Lastly, he reiterated that developing and emerging countries “have become the anchors of global economic growth and their influences have become evident in international trade.”

Dr Abedian holds a PhD in Economics and has served as a consultant on economic policy issues to public and private sector organizations in South Africa as well as internationally.