African countries must begin a manufacturing renaissance to take over from China as that country’s labour costs rise, and unleash investments in food and farming to secure the continent’s future growth, the head of the African Development Bank has warned.
“With wages rising in China, Africa needs to create manufacturing,” Akinwumi Adesina, president of the AfDB, said in a speech at the Financial Times Africa summit in London. Mr Adesina added that African governments should seek to attract production that is being outsourced from Chinese factories.
Mr Adesina also said that it was “not acceptable” that Africa remained a net importer of food despite possessing two-thirds of the world’s future arable land. “Africa must feed itself … if we are going to have inclusive growth, we have to turn around agriculture,” he added.
African countries are spending $35bn a year on importing food to feed growing populations. If trends persist, the bill could rise to $110bn by 2025, according to the AfDB, which plans to invest $24bn in African agriculture over the next decade.
Mr Adesina’s call to find new sources of growth such as manufacturing and farming came as research by the Mo Ibrahim Foundation revealed that Africa’s oil-exporting nations such as Nigeria and Angola had largely squandered their resource wealth in the past decade by failing to diversify into new sectors.
Despite a fall in commodity prices putting further pressure on finances in several countries, Mr Adesina said that governments were not facing serious debt distress. “Africa is not in a debt crisis. [Countries] have a liquidity challenge,” he said.
Also speaking at the FT Africa summit, Pravin Gordhan, South Africa’s finance minister, said that the country’s economic institutions such as the Treasury and the central bank were “in good hands” despite political turmoil in the country’s ruling African National Congress.
South African markets and the rand were unsettled over the summer by news of a police investigation into a rogue spy unit set up at South Africa’s tax service when Mr Gordhan was its head, fuelling speculation that President Jacob Zuma wanted to remove him from office.
Mr Gordhan said that he had Mr Zuma’s backing and that “there’s no case really, but there’s a lot of noise” over the investigation.
The finance minister added that “you must expect what we would call a bit of noise” as the ANC neared a conference scheduled next year to select its next president.