Africa S2

a) The story of Africa

Africa is widely considered to be the next frontier market.

And there are many success stories but

Sadly the current indicators spell out a picture of extreme challenges;-

  • Population growth
  • Malnutrition growth
  • Agricultural production is leveling off.
    • It is estimated that Africa will have to increase its agricultural production by approximately hundred and fifty percent to accommodate the population growth and counter malnutrition.
  • GDP per capita gap with the rest of the world is busy to increase.
  • The poverty cycle is not broken, key factors in this are
    • Food availability/ malnutrition/ time per family/costs

b) What are the key drivers?

  • Africa’s current growth is primarily driven through the sale of minerals and resources
  • The continent’s percentage of value adding/high end economic activities is decreasing despite seemingly growth indicators, for example: —
  • Africa’s population currently is 13% of the global population and will increase to 17% as it’s growth rate is out of control
    • It’s manufacturing contribution is less than 4% and will decrease to below 3%. Not as a result of, limited manufacturing expansion (as manufacturing are expanding) but as a result of the fact that global manufacturing are exponentially accelerating.
    • More devastating is Africa’s shrinking and totally below average value adding within a growing global knowledge economy. The current contribution is effectively less than 1%. As illustrated for example through aspects such as patent applications, Internet use. Again despite seemingly growing electronic communication growth.
    • The result of these two factors are that Africa have a growing gap and is falling behind with regards to its gross domestic product per capita with the rest of the world.
  • This is further aggravated three adverse historically driven policies. For example:-
    • Africa’s agricultural productivity is leveling off despite growth in agriculture and successful development projects by the IFD.
    • At the core of this are two main factors. Policies aimed at alleviating job creation through ground redistribution, And the establishing of small scale farmers.
    • This per say both culturally and historically is not an adverse policy, the problem however is:-
    • To achieve growth of small farmers to a level of commercial and food security contribution, the cost and time in comparison to other regions are becoming a negative driver.
    • Furthermore, the majority of agricultural small scale farming projects have been driven by primarily either what one can call colonial type or perceived historical policies, and not ground level market developments.
  • The other critical factor in this scenario is that Africa currently has a substantial rural population with an unfortunate dynamics of high urbanization. A factor which will increase on its own, excluding the existing malnutrition, will require a 40 to 50% reduction in nutritional increase in agricultural production.
  • The overall primary factor is the development of our human potential. Currently this within an African context is largely driven through what one can summarize as social political rhetoric.
    • The unlocking of Africa’s human potential’s key lies in a total reference framework change; that empowers our??people through personal visions of self worth, economic contribution and personal pride. In short truly restoring Africa’s persona, not through policies designed to negate historical colonial concepts, but through human dignity and personal strength, self image and personal pride.

c) SA versus Africa

SA is currently the only African country which has a broad base agricultural business, commercial and emerging production platform able to meet the required increase in food production. This capacity however is currently under utilized through policy constraints at an estimated 55%.

This directly contributes to major difficulties to unlock poverty and malnutrition within the South African society.

The agricultural policies and civic society current interaction with the agriculture have to be normalized.

SA cannot afford an agricultural Marikana.

If South Africa reaches the same point in agriculture as mining, currently social unrest within South Africa will accelerate, international investments confidence will dissipate and SA will face a seventeen year plus recovery.

In simple terms, the current demands for higher wages without increased food production, nationalization policies such as the 5050 proposals and labor evictions; is simply not a sustainable model.

d) In conclusion :-

The aforementioned paragraph clearly highlights the need for a social accord with future directed policies and collaboration between all parties from government, unions, workers, farmers and business, including our communities.

Collaboration is achievable on a win win scenario, through mutual respect, acknowledgement, support and partnerships.

In short SA requires future director policies which results in accelerated agricultural and economic growth, that is supportive and incorporate the development of our human potential, while simultaneously addressing the growing adverse deficit.

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