Wednesday 21 April 2021
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Africa to transform its economies through observational learning

Roman Grynberg and Fwasa Singogo of the University of Namibia penned an interesting opinion piece in the Namibian newspaper of Tuesday, 22 October 2019. They argued that “…Africa became in the last decade a major mining province”.
They believed that this happened partly because of the World Bank through structural adjust policies which were imposed on some African countries in the 1980s. Mining is capital intensive.
It has low job content.
Through the combination of low tax regimes on mining companies and the suspected illicit financial leakages, African countries are not benefiting optimally from their natural endowment. Yet, the African youthful population needs jobs.
According to the World Bank report titled: “Jobs and Economic Transformation-2019”, Africa should create 1.7 million jobs every month to meet the challenge of youth unemployment.

This is only possible if Africa was going to change the structure of its economies.
The report urged African leaders to change their mind-set and embark on policies which will enhance economic transformation on the continent.
In many ways Africa leadership demonstrate the dependence syndrome, a belief that investors shall come and create jobs in Africa.
The World Bank study found that those African countries that have successfully diversified and transformed their economies and build-up their resources are in a better position to grow their economies.
In particular, the report recommends that African countries should develop policies and investments that support the integration of lower-skilled and lower- educated workers to benefit from digital technology adoption.
An increase in technological adoption has a potential of boosting the employability of African youth.
Technological adoption requires energy and effort.
This means that African countries have to develop strategies of technological adoptio.
One such strategy is observational learning or information cascade.
Information cascade model posits that individuals learn from their predecessors.
Information cascade happens when external information obtained from previous participants in an event overrides one’s own private knowledge, regardless whether such knowledge may be correct.
In the case of African economic transformation, Africa could learn from others as to how to adopt technologies which others have used to transform their economies.
To start with African countries are at different levels of development.
Those at lower levels of development can learn from those at advanced levels of development. Africa as a whole can learn from other continents as to the best ways of technology adoption.
For this to happen, African countries should first and foremost identify economic sectors with high potential of transformation and growth as well as create triggers for new business ideas.
This will help them to locate the relevant technologies which should be adopted to transform those sectors or put the new business ideas into operation.
Countries may then identify those other countries who have successfully applied such technologies.
Observational learning will follow and the adoption of new technologies will take place.
A process of economic transformation will take place.
Africa will start to industrialize and create more jobs for its youth. In particular, digital technologies have a high potential to leap frog African economic transformation.
Digital technologies adoption can help businesses to be more competitive by reducing costs of doing business.
Moreover, access to internet and mobile applications can help lower-skilled workers to learn better business practices and become more competitive.
In this regard African countries should invest more in digital infrastructure with the view of tapping in regional value chains. At the same time they will be able to empower their youth with new skills.
Africa cannot afford to continue to base its economy on extraction of raw materials.
Africa must transform and diversify its economies to ensure that African economies are not vulnerable to exogenous factors as is the case today.
In addition, Africa must transform its economies to create jobs and better livelihoods for its people.
While Africa continues to dig holes in the ground as Roman Grynberg and Fwasa Singogo opined, Africa must change its mind-set and embark on a serious programme of economic transformation and sound economic management.
Africa must learn to learn from others!

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