I believe Africa is in turmoil because it doesn’t want to subscribe to the basic concepts of economics, the reason why it doesn’t subscribe it may be due to the thinking of which the leadership of this continent has. We have a history of being led by ex-cons and puppets. Those who stood up and wanted to distribute the wealth amongst the people have failed drastically, one good example is Thomas Sankara who led Ivory Coast in the most moral manner and never tolerated corruption still failed tremendously in uplifting the economy of the country. Zimbabwe also failed after land redistribution.
In South Africa the value of our currency increased when Cyril Ramaphosa became President of the ANC, I guess the reason behind this it’s because the investor confidence went up since he is a renowned businessman. When our currency gained more value it threatened our GDP of which the same applies in every country in the continent of Africa. Africa is the largest continent in the world which is rich in minerals, Africa is so big that it can house China, USA, Mexico, France… hack! let me just give you a graphical illustration
All the other countries are exploiting Africa by digging its natural resources for their own economic gain. The reason why the increasing value of our currency is threatening our GDP it’s because the things we produce in the country are going to be expensive and the countries we have a comparative advantage with will lose their opportunity cost and would rather produce for their own, meaning we will have fewer exports and more imports and that will decrease our economy. As much as we are a big continent in size and riches, our GDP, however, is saddening. Let’s look at this graphical illustration which will enable us to see the size of our GDP compared to the rest of the world.
I can’t even see Africa!, it’s important for us to note that our GDP is at the mercy of the entrepreneurs. And if Africa doesn’t embrace the entrepreneurial culture by offering end to end support to businesses who are solving the problems of Africa and the rest of the world we will forever be in an “ag shame” state. By support, I don’t mean the cute entrepreneurial programs which have been copied from Silicon Valley we need business models of our own which will fit in our environment. Our greatest dilemma is that we are cursed with the first world’s technology whilst we are the third world and haven’t effectively found ways to utilize them to solve our problems, instead we are solving the first world’s problems with that, so far we are not making any progress.
Our economy is predicated on production and only entrepreneurs can do that. Entrepreneurs are the holy grail of the economy, another aspect considered when calculating the GDP is “expenditure” of which people can’t spend money if they are unemployed. Small and Medium Enterprises (SMEs) have been identified as productive drivers of inclusive economic growth and development in South Africa and around the world. Some researchers have estimated that, in South Africa, small and medium-sized enterprises make up 91% of formalized businesses, provide employment to about 60% of the labor force and total economic output accounts for roughly 34% of GDP.
What I will be doing in 2018
I am a Group CEO of an IT Security Company which is securing digital infrastructure for businesses within the African market and ensuring that Africa can build secure technologies which will be effective in this fourth industrial revolution and we will have the opportunity. Secondly, I will be building business models that will better suit the African entrepreneurs to tackle economic growth.