Africa looks to the Orient for lessons
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E-mail China Daily, September 9, 2013
According to Teng, China's skill and technology transfer to Africa would be a process of mutual learning. It is crucial for developing Chinese companies to grow alongside African skills and markets, and those who go to Africa earlier would have more opportunities.
"Industrialization for Africa is a necessary foundation for any future economic boom," he says. "For China, it's a strategic opportunity to reach common development. So, from an investment perspective, it's crucial to catch the 1 percent chance and turn it into 100 percent success at this special time."
However, people do not have a clear understanding of Africa and have over-generalized the situation, says Jorge Maia, head of the research and information at the Industrial Development Corp in South Africa,
"It is extremely important for us not to look at the continent in an abstract way, and take a broad-brush approach," he maintains. "The African countries are so different. The moment you focus on one country, you would realize how distinct it is from others."
Investors should generate more detailed and specific proposals for business in different regions and countries, rather than making decisions on a rough idea or general understanding that could lead to failure.
Typical obstacles to investment in many countries include disconnections between business, social and governmental entities.
Shamal Sivasanker, director of consulting for Deloitte Touche Tohmatsu Ltd in South Africa, goes a step further.
"I don't think Africa is capable enough at present to go through industrialization," he says. "If we look at the industrialization programs China carried out between the late 1980s and where we are today, and the level of coordination needed between government departments and private sectors, no one has actually talked about that level of collaboration and participation in Africa.
"The challenge we have at this moment is that there are a lot of good intentions in Africa about industrialization and its benefits, but it is the supporting regulations and actions behind these that really determine whether Africa could be industrialized."
South Africa has infrastructure programs that meet the basic requirements for more manufacturing, but the country lacks economic policies and the financial support to achieve this, he says.
"We know Africa does not have the skills and capability to roll out industrialization by itself, nor has it funding for it," Sivasanker says. "When we start looking at India, China, Brazil, the US and so on, the intention should be able to attract more investors, build a skill base in an African country and try to localize some components of industries."
When a country starts to impose the number of jobs that a foreign company needs to create locally, it becomes more politically aligned, he warns.
"The real industrialization policy is to see what local manufacturers could contribute, then let the market decide how it is done and decide how many jobs it needs to create," Sivasanker says. "The answer to the social issues lies in how we do industry in South Africa and how we allow a more free trading environment or, alternatively, a more regulated environment or policy to foster the environment."
He says a brain drain is also a threat to the future development of Africa, and governments should focus on encouraging better-established education policies to nurture talent and skills needed by personnel in the industrialization process.
"From an education and skills development perspective, there's no policy supporting education infrastructure or development," he says. "Chinese companies should also support certain parts of the education system in Africa to produce more engineers, rather than producing more Chinese engineers here.
"India has seen the benefit of a strong education system that was established 60 years ago. But within Africa, we don't have the capacity now.
"The country that is able to start and accelerate the industrialization process should win the talent war."
Xue Xiaoming, vice-chairman of the Nigerian Chinese Chamber of Industry and Commerce, and also managing director of Feiteng Industry Nigeria Ltd, says the slow progress in industry and manufacturing in Africa, judging by what is happening in Nigeria, is because of a difference in approach and vision between foreign investors and local government and industry.
"Nigeria is a total and absolutely free market, which has no preference toward any particular industry or field," says Xue. "So, although it has strong intentions to develop its industry and manufacturing, so far there has been no prominent support from policies, regulations, finance and laws."
Besides, he adds, it demands great courage to commit to industrial development in Nigeria, because poor infrastructure remains a major barrier - as it does in most countries in Africa.
"Developing industries require sustained electricity supply, smooth transportation and other very basic infrastructure facilities, which at present are still far from enough to ensure operations," Xue says. "And industrializing a country is not only to develop or establish one or two industries, but a complete industry chain that involves a lot of plant and other facilities."
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