Why Africa Must Turn Potential into Value

Africa is in a crisis that can be avoided if the continent turns its potential into value. The continent’s promise lies in a young and dynamic population, abundant natural resources, and vast opportunities for innovation and development. Despite this abundance, grave challenges persist—all of which are solvable if we exploit this enormous potential fairly. After more than sixty years of independence for many nations, it is time for Africa to take responsibility for its actions or inactions. Often, we blame others and fall into a sense of hopelessness and, at worst, conflict.

Hopelessness—a complete lack of optimism or belief in the ability to respond to a situation—can have devastating consequences for Africa and its people. In a 2016 article, UNICEF concluded that hopelessness could erode the confidence and motivation of the young generation, who drive change and innovation. It can also fuel resentment and violence, leading to instability and insecurity. Hopelessness can reduce African leaders' and institutions' willingness and capacity to pursue reforms and cooperate with regional and global partners. It can ultimately trap Africa in a cycle of underdevelopment and dependency, wasting its enormous potential and value.

Without a concrete strategy to move from potential to value, embracing a four-step strategy often advanced by Africa’s foreign friends is imperative. The first is to strengthen the foundations of governance, peace, and security. Yes, we say they are lecturing us, but enhancing democratic institutions, promoting human rights, resolving conflicts, combating corruption, and ensuring the rule of law are prerequisites to stability.

Second, we must continue to invest in human capital and social development. This involves improving access to quality education, healthcare, water, sanitation, and nutrition for all, especially women and children. It also means fostering social inclusion, empowerment, and participation of marginalized groups, such as youth, women, ethnic minorities, and people with disabilities. These are the drivers of innovation and productivity now and in the future. However, we need to translate these concepts into a language people understand.

Third, diversifying and structurally transforming the economies. This requires boosting agricultural productivity, expanding manufacturing and services sectors, developing digital and green technologies, and enhancing regional – African Continental Free Trade Area (ACFTA) - and global integration. It also entails creating decent jobs, improving infrastructure, and mobilizing domestic resources through capitalising her natural resources, especially the strategic mineral reserves in high demand for the global transition to a low-carbon economy.

Africa holds about 30% of the world's mineral reserves, including cobalt, lithium, platinum, and rare earth metals. These are essential to produce batteries, electric vehicles, solar panels, wind turbines, and other green technologies. However, Africa still needs to benefit from its resource wealth, as it exports most of its minerals in raw or semi-processed forms, with little value addition and limited linkages to the rest of the economy. This means that Africa needs to catch up on the potential revenues, jobs, and skills generated from processing and manufacturing its minerals.

To reverse this trend, the continent must invest in data and knowledge on our mineral resources, improve governance and regulatory frameworks, strengthen bargaining power and negotiation skills, promote local content and beneficiation policies, and foster ACFTA. By doing so, Africa can ensure its natural resources catalyze sustainable development and inclusive growth. These are the sources of competitiveness and resilience in the global market.

The fourth strategy is learning to love yourself. It is informed by my statistical experimentation, which I conduct in every country I visit. In Korea, every ten vehicles passing on any road are eight to nine Koreans. Japan is the same. In India, the dominant truck is Tata, and virtually all the vehicles on the road are manufactured or assembled in India. In contrast, one in two chickens Africa consumes is imported.

Despite having many rivers, lakes, and oceans, we import more fish than we catch. Last year, Nigeria produced 1.2 million MT and imported 2.4 million MT. Africa’s poultry imports were estimated at $3 billion in 2018. South Africa, the largest chicken producer, still imports at least 4 million chickens annually. Although I am not comparing apples to apples, it is a fair comparison that even with what Africa can do, the continent still is not able to turn potential into value.

To change this image, Africa must use data to disentangle the continent from subsistence to commercial farming. There is plenty of data to help the continent understand the demand and supply patterns of different agricultural products, identify the gaps and opportunities in the value chains, and design policies and interventions that can enhance productivity, quality, and profitability. It is useless to say data is the new oil if it cannot be used to inform the people how it helps monitor and evaluate the impact of our actions, learn from best practices, and adapt to changing circumstances.

It is no longer a secret that data can empower farmers, processors, traders, and consumers to make informed decisions and access better markets. It does more, including facilitating cross-border trade and regional integration, which can create economies of scale and reduce dependence on imports. Data is not a magic bullet but a powerful tool that can transform Africa's agriculture sector, improve the livelihoods of millions of people, and ensure food security.

This article's central message is that Africa can become a significant player in the global agricultural market. Still, it needs to use data to transform its farming sector and create value for its people. Data can help Africa to understand its challenges and opportunities, improve its productivity and quality, access better markets and prices, and enhance its food security and resilience. Data can also enable Africa to diversify and transform its economy, strengthen its governance and institutions, invest in its human capital, and foster a sense of pride and confidence in its abilities and achievements. Using data effectively, Africa can turn its potential into value and realize its vision of a prosperous and peaceful continent.