Despite $300bn in aid that has been disbursed to the African continent since 1970, economic growth and human development in Africa still lags behind the rest of the world. That is a challenge that the Rwandan President took on during a recent five-day trip to visit the United Kingdom, where he was a speaker at the Conservative Party annual conference in Blackpool and at the London School of Economics.
For President Paul Kagame, as it should be for the rest of the continent, processing or value addition to local products is an indispensable practice that Africans must fully embrace if they are to ever break the yoke of aid dependence that is necessitated by reliance on the export of raw materials. His call for minimizing exporting only raw materials, and turning to processing them before export, thus adding value first, should not be taken lightly. Instead of exporting coffee beans for example, we export coffee as a finished product.
The President argued that Africans need to see aid as a temporary vehicle for building institutions, systems, infrastructure and capacity for embarking on real development via domestic entrepreneurship and direct foreign investment.
His address to the London School of Economics (LSE) pointed out that over 83% of COMESA exports are raw materials. If the relatively industrialized economies of Kenya and Egypt are left out of this equation, the percentage of raw material exports goes much higher.
Countries get rich by adding value to commodities and selling these products. This requires investment and Africa is still hardly the most attractive destination for such capital. Inadequate infrastructure, insecurity, lack of skilled labor and stifling government bureaucracies cause investors to put their money elsewhere.
Productive capacities, competitiveness and value addition to products – as opposed to aid dependency, is a frame of mind and a practice that Africa and Rwanda must embrace. Kagame gave an assessment on why Africa fell behind. According to him it was because of bad leadership, the failure to invest in people, a lack of productivity and competitiveness and aid dependence.
Governments should see their roles as enablers of business, and not gatekeepers that control and hamper it. Governments do not create wealth, businesses do, the President emphasized.
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