China offers a strong development model for Africa by virtue of the transformation of its economy in one generation. This was the argument of Lamido Sanusi, a former CBN governor and now the emir of Kano, in a presentation on Tuesday at the annual meetings of the African Development Bank (AfDB) in Busan (South Korea). Manufacturing’s share of GDP across Africa has fallen from 19% in 1975 to 11% in 2001. The event’s theme was Improving Domestic Resource Mobilization to Finance Industrialization, so the presentation was an attempt to identify useful pointers and parallels.
- Investment in education is a starting point. Sanusi noted that the number of graduates in China has soared from eight million when Deng Xiaoping assumed the leadership in 1978 to 300 million. It was unsaid but we assume that graduates of the liberal arts make up a small percentage of the total.
- Sanusi noted a strong correlation between poor tax collection and low rankings in Transparency International’s annual Corruption Perceptions Index. The tax revenue/GDP ratio ranged from 24% in Senegal to 18% in Kenya and 6% in Nigeria.
- He added that fiscal deficit/GDP ratios serve little purpose in isolation and should be viewed in conjunction with those for tax revenues/GDP. The impact of a 3% deficit in Kenya is very different to in Nigeria, for example.
- Panellists from three African governments were asked by the mediator to comment on the index. Eritrea disputed the methodology, Algeria initially side-stepped the question, and Angola accepted that its low league position reflected poor governance and neglect of its non-oil economy over many years.
- Development policy cannot be detached from demographics. Being the youngest population in the world does not pay a dividend without parallel investment in the infrastructure and education, and job creation. Sanusi noted China’s one-child policy, launched in 1979, as one policy response, without endorsing it.
- He supported the African Continental Free Trade Area, noting that nine out of ten African countries run a trade deficit with China and arguing that together they would have a far stronger negotiating position.
- At the same time, China offers a great opportunity for job creation. Because it has moved dramatically up the income ladder, about 100 million low-cost jobs in areas such as textiles will have to be exported. This process has begun.
- Sanusi was not speaking in isolation. He did not use the term but outlined the broad characteristics of the “developmental state”. (Good Morning Nigeria, 30 April 2018). He also gave the examples of Ethiopia and Rwanda, adding Côte d’Ivoire to the mix for its approach to, and record in industrialization.
