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CURRENT AND POTENTIAL PUBLIC FINANCE MAGAMENT

REFORMS CONTRIBUTION TOWARDS ACCELERATING ECONOMIC GROWTH

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Presented By

Prof. PLO – Lumumba

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AT THE 27TH ESAAG ANNUAL CONFERENCE ON THE 27TH DAY OF JANUARY, 2020 AT

SWAKOPMUND, NAMIBIA

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Abstract The recognition of the role of good governance in corporate performance in emerging and developing economies has been identified by stakeholders as critical to the promotion of economic growth in domestic and regional markets. This paper focuses on the Perspective on the future of Africa in the Global Economy, inextricable linkage between politics and corporate governance and how this interplay impacts on the economic growth and development of the sub-Saharan Africa. The paper further seeks to stimulate dialogue between governments, the public and private sectors on the growing concerns why Africa has not achieved its potential in terms of real economic growth, nearly half a century after majority of African countries attained political independence from the European colonizers. The paper concludes by suggesting that Africa should learn from successful experiences since it has the potential to do well in the Global Economy.

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PUBLIC FINANCE MANAGEMENT REFORMS AND CONTRIBUTION TOWARDS ACCELERATING ECONOMIC GROWTH

A. Introduction

When African countries emerged from the York of colonization many promises were made across the length and breadth of Africa, word used by the leads of the day may have been different but the message was one:

Let us take charge of our affairs that we may improve the quality of service delivery for the benefits of our people

With the attainment of independence by most African countries in the late 1950s and 1960s, the public sector was generally regarded as the hinge that would promote socio-economic development hence the rationalization of key institution such as Postal services, Electricity generations’ services, Telephone services and create what were described as parastatals. The nationalized Institutions thrived for a short time on inherited momentum. Unfortunately, with the advent of political patronage and nepotism corruption and inefficiency crept in to the determent of service delivery. As a result of Institutional collapse in the 1980s the International Monetary Fund (IMF) and the World Bank (WB) instituted the structural adjustment programs to support economies of developing (mostly African) economies to become more marketed oriented thus leading to commencement of Privatization which in itself was bedeviled with numerous problems. The foregoing notwithstanding the public sector offers Africa a significant opportunity to leapfrog stages of development and radically increase employment.

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B. History of Africa Global Economy Since Independence

In a half century of independence, Africa has not realized her potential. Although African economies have been growing at an average of 5 per cent for five years, and the record of democracy and human rights had been steadily improving over the past 20 years, according to the World Bank statistics on the Purchasing Power Parity figures of 2009, Africans south of Sahara were still the poorest people in the world, with an average annual income of $1681- 50 per cent less than the next poorest people of South Asia, and more than seven times poorer than Latin Americans. Africans had the lowest life expectancy worldwide (50 years compared to the next lowest, South Asia, at 64), and the highest rate of infant mortality. This reflected consistently low real economic growth across the continent, and lack of economic opportunity for Africans, as well as a range of other problems including poor governance, high rates of conflict, food insecurity, poor infrastructure, fragmented industrial sector, widespread corruption and reliance on foreign aid.1 However, no country has developed solely through Aid. No amount of money was going to ‘fix’ African states if their leaders continued to make wrong development choices. According to Dambisa Moyo, Aid has been, and continues to be, an unmitigated political, economic, and humanitarian disaster for most parts of the developing world.2 Indeed, the majority of Sub-Saharan countries continue to flounder in a seemingly never-ending cycle of corruption, disease, poverty, and aid-dependency, despite the fact that their countries have received more than US$300 billion in development assistance since 1970.3 Over the past thirty years, the most aid-dependent countries have exhibited an average annual growth rate of minus 0.2 per cent. Between 1970 and 1998, when aid flows to Africa were at their peak, the poverty rate in Africa actually rose from 11 per cent to a staggering 66 per cent.4 Yet it is worth remembering that just thirty years ago Malawi, Burundi and Burkina Faso were economically ahead of China on a per capita income basis.

1World Development Indicators 2008. Washington DC: The World Bank 2008. 2 See, Moyo, D. (2009) “Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa”, p.1. New York: Farrar, Strauss, and Giroux.

3Ibid. 4Ibid.

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C. Africa Space in the Global Economy

GDP (Nominal) of Africa 2019

1. Nigeria (18.13%) 2. South Africa (15.13%) 3. Egypt (12.21%) 4. Algeria (7.49%) 5. Morocco (4.94%) 6. Kenya (4.04%) 7. Angola (3.76%) 8. Ethiopia (3.71%) 9. Ghana (2.78%) 10. Tanzania (2.78%) 11. Other countries (27.81%)

Countries Nominal GDP in Billions $ Nominal GDP Per Capita $ 1 Nigeria 444.916 2,233.45

2 South Africa 371.298 6,331.46

3 Egypt 299.589 3,019.72

4 Algeria 183.687 4,229.78

5 Morocco 121.350 3,409.95

6 Kenya 99.246 2,010.51

7 Angola 92.191 3,060.02

8 Ethiopia 90.968 951.10

9 Ghana 68.258 2,262.57

10 Tanzania 61.032 1,172.18

11 Democratic Republic of the Congo 48.458 495.08

12 Côte d'Ivoire 45.252 1,722.26

13 Libya 44.964 6,835.62

14 Cameroon 39.219 1,537.61

15 Tunisia 36.204 3,072.51

16 Uganda 33.569 828.06

17 Sudan 31.468 728.06

18 Senegal 25.32 1,510.20

19 Zambia 24.615 1,343.57

20 Zimbabwe 22.29 1,423.49

21 Botswana 19.651 8,263.22

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22 Mali 17.833 933.88

23 Gabon 16.709 8,031.44

24 Mozambique 15.372 493.37

25 Burkina Faso 14.882 744.24

26 Mauritius 14.812 11,693.55

27 Namibia 13.961 5,675.11

28 Madagascar 12.734 470.67

29 Guinea 12.623 926.33

30 Equatorial Guinea 12.432 9,140.32

31 Chad 11.372 888.29

32 Benin 11.184 954.10

33 Republic of Congo 11.162 2,443.75

34 Rwanda 10.211 829.97

35 Niger 9.724 487.68

36 Somalia 7.903

37 Eritrea 7.718 1,253.06

38 Malawi 7.436 366.532

39 Togo 5.592 682.40

40 Mauritania 5.569 1,191.51

41 Eswatini 4.662 4,205.67

42 Sierra Leone 3.998 516.76

43 Burundi 3.573 309.87

44 Liberia 3.221 703.67

45 South Sudan 3.151 235.52

46 Lesotho 2.811 1,372.51

47 Djibouti 2.392 2,218.05

48 Central African Republic 2.285 440.99

49 Cabo Verde 2.042 3,650.11

50 The Gambia 1.741 778.08

51 Seychelles 1.654 17,154.74

52 Guinea-Bissau 1.538 865.74

53 Comoros 0.726 832.87

54 São Tomé and Príncipe 0.477 2,147.16 Total 2,453.8445

5Mensah, Francis. "AFRICAN STOCK MARKET DEVELOPMENTS AND ECONOMIC GROWTH." QRBD (2019): 151.

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You may be concerned about what globalization does to countries in Africa and what it means for the environment, for human rights, and for democracy. My view, however, and this is what I want to discuss today, is that globalization is an overwhelming force which cannot be ignored. God has laid a foundation of enormous resource in Africa. When you move from South, you encounter gold in South Africa, coffee in Madagascar, copper in Zambia, platinum in Zimbabwe, Aluminum in Mozambique, we find diamond in Botswana. When you enter Central Africa, you step on the fertile soil of Congo, the vast Congo Forest and the diamonds. And when you move to the West, you come across Oil in Nigeria, Cotton in Mali, Iron Ore in Mauritania, uranium in Niger and Cocoa in Ghana.6 You go northwards and you are confronted with Crude oil in Libya, natural gas in Algeria. And when you turn eastwards, you encounter livestock in Somalia, tea in Kenya, gold in diamond in Tanzania, coffee in Uganda. 7 These vast mineral deposits; gold, oil reserves that continually pump barrel after barrel of the precious liquid, fertile and well-watered plains can feed the entire world. Africa needs serious reforms to secure a prosperous future in the Global Economy. This is not to pretend that reform is easy. Reforms are about challenging the status quo and there will be powerful individuals and groups who will fight hard to prevent change. Given Africa’s rising population and growing cities, inaction will ultimately end badly for all, even the elites. Therefore, for African Countries to meet the challenges coming their way then their leaders need to make their counties both attractive and competitive in both regional level and internationally.8

6Oppong, Joseph R. Africa south of the Sahara. Infobase Publishing, 2005. 7Stalker, Peter. A Guide to Countries of the World.Oxford University Press, 2010. 8 Greg Mills, Jeffry Herbst, Olugesun Obasanjo, Dickie Davis. Making Africa Work.Hurst and Company London. 2017. P 269.

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D. The Public Sector

The public sector is the sector that provides a range of governmental services, it exist to provide services for its citizens such as infrastructure, public transportation, public education, health care, police and military services. Organizations in the public sector do not seek to generate a profit. Public Sector is the largest sector, which works to improve the lives of the people.9

Examples of the Public Sector Examples of organizations in the public sector include:

• Education • Electricity • Emergency Services • Fire Service • Banking • Gas and Oil • Healthcare • Insurance • Agriculture • Infrastructure • Law Enforcement • Police Services • Manufacturing • Postal Service • Public Transit • Social Services • Transport i.e. Railway services

9Savas, Emanuel S., and Emanuel S. Savas."Privatization and public-private partnerships." (2000).

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E. Basis For The Development Of Public Sector In Africa

Good governance, transparency and accountability have always been Africa’s Achilles heel. Following years of neglect and disuse, mostly as a result of mismanagement of public funds and accounts, most government institutions, especially in conflict countries, stand as empty monuments of misdirected efforts at development. Many more lie in a heap of ashes, having fallen victim to corruption scandals, resulting from disillusionment with the political leadership, often consumed by unrestrained pursuits for power and a selfish desire to accumulate vast amounts of personal wealth.10 Under governance that is truly transparent, effective and accountable, citizens have access to crucial information about how government operates, establishes priorities and makes decisions. In recent decades, civil society and governments in Africa have made advances in increasing transparency and accountability at all levels of government. Yet there is still a need for greater and more meaningful participation and accountability, particularly when it comes to how public resources are utilized by Institutions. Effective institutions enable people to work together effectively and peacefully. Fair institutions ensure that all people have equal rights and a chance to improve their lives, and access to justice when they are wronged. Institutions can be both formal and informal. Core formal institutions include laws, contracts and formal public management processes (such as public financial management, procurement, and human resources management), while informal institutions refer to broader norms and values that can influence behavior. In essence, however, institutions (whether formal or informal) define how power is managed and used, how states and societies arrive at decisions, and how they implement those decisions and measure and account for the results. Effective institutions can take many forms: robust legal frameworks and representative parliaments with strong capacity for oversight; adept civil services and the timely and quality delivery of public services; efficient

10Amuwo, Adekunle. "Constructing the Democratic Developmental State in Africa." (2008).

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judiciaries that uphold the rule of law; vibrant and actively engaged civil societies; and free and independent media. These institutions depend on the development of decentralized, democratic decision-making processes. Since time immemorial the efficacy of institutions has been measured by the quality of public services, the quality of the civil service and its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to its stated policies. However, there are overriding factors that gauge such efficacy and they include:

i. Competence of civil service; effective implementation of government decisions; and public service vulnerability to political pressure;

ii. Ability to manage political alternations without drastic policy changes or interruptions in government services;

iii. Flexibility, learning, and innovation within the political leadership/political will; ability to coordinate conflicting objectives into coherent policies;

iv. The efficiency of revenue mobilization and budget management;

v. The quality of transportation infrastructure, telecommunications, electricity supply, public health care provision, and public schools; the availability of online government services;

vi. Policy consistency; the extent to which government commitments are honored by new governments;

vii. The degree to which bureaucratic delays hinder business activity;

viii. Existence of a taxpayer service and information program, and an efficient and effective appeals mechanism;

ix. The extent to which:

• Effective coordination mechanisms ensure policy consistency across departmental boundaries, and administrative structures are organized along functional lines with little duplication;

• The business processes of government agencies are regularly reviewed to ensure efficiency of decision making and implementation;

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• Political leadership sets and maintains strategic priorities and the government effectively implements reforms;

• Hiring and promotion within the government is based on merit and performance, and ethical standards prevail;

• The government wage bill is sustainable and does not crowd out spending required for public services; pay and benefit levels do not deter talented people from entering the public sector; flexibility (that is not abused) exists to pay more attractive wages in hard-to-fill positions;

• Government revenues are generated by low-distortion taxes; import tariffs are low and relatively uniform, export rebate or duty drawbacks are functional; the tax base is broad and free of arbitrary exemptions; tax administration is effective and rule-based; and tax administration and compliance costs are low;

• Policies and priorities are linked to the budget; multi-year expenditure projections are integrated into the budget formulation process, and reflect explicit costing of the implications of new policy initiatives; the budget is formulated through systematic consultations with spending ministries and the legislature, adhering to a fixed budget calendar; the budget classification system is comprehensive and consistent with international standards; and off-budget expenditures are kept to a minimum and handled transparently;

• The budget is implemented as planned, and actual expenditures deviate only slightly from planned levels;

• Budget monitoring occurs throughout the year based on well-functioning management information systems; reconciliation of banking and fiscal records is practiced comprehensively, properly, and in a timely way;

• In-year fiscal reports and public accounts are prepared promptly and regularly and provide full and accurate data; the extent to which accounts are audited in a timely, professional and comprehensive manner and appropriate action is taken on budget reports and audit findings.11

11Shah, Anwar. Fiscal decentralization in developing and transition economies: progress, problems, and the promise. The World Bank, 2004.

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All these factors are concentrated towards transparency and accountability of government institutions. This is because they all have a direct impact on each other hence one cannot do without the other.

i. Good Governance

The underlying litany of Africa's development problems is a crisis of governance. Poor quality institutions, weak rule of law, an absence of accountability, tight controls over information and high levels of corruption which still characterize many African states. Many African countries score poorly in all governance indexes that include corruption as a measure. Within African countries themselves, corruption is also ranked very high up in their list of the core impediments to national and sub-regional development and progress. African governments have come under domestic and external pressure to take measures to contain corruption and corrupt practices. Good governance involves far more than the power of the state or the strength of political will. Under good governance, transparency and accountability are not merely technical questions of administrative procedure or institutional design. They are outcomes of democratizing processes driven not only by committed leadership, but also by the participation of, and contention among groups and interests in society—processes that are most effective when sustained and restrained by legitimate, effective institutions. All over the continent, various types of anti-corruption commissions and agencies have been established with varying jurisdictions and mandates. Public campaigns, mostly through the media, have also been mounted to exhort the citizenry to join in the official fight that has been declared against corruption. The effectiveness of the anti-corruption agencies and campaigns has itself been a subject of broad governance interest across Africa. Overall, there is a broad consensus that much more effort needs to be deployed by governments to fight corruption successfully.

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The goals for good governance include12: i. Provision of legitimate, effective, responsive

institutions and policies (“embedded autonomy”) ii. Establishment of understandable processes and

outcomes with visible results in citizens’ lives iii. Accountability of government to the public with

clear standards for success or failure and clear lines of responsibility and accountability

iv. Transparency of government operations inclusive of openness, participation and scrutiny from the public.

ii. Transparency

In recent times, there has also been a major push on transparency in financial governance, to improve citizens’ ability to hold their governments to account. The credibility of national budgets has improved, although expenditure controls and internal audit functions remain weak. It is estimated that, with more effective institutions, African states could double their tax revenue. Auditor-general institutions and parliament public accounts committees have become increasingly active. Getting these accountability mechanisms to work effectively is a key goal. If African governments can continue to demonstrate to citizens that they are using public revenues more effectively, it can lead to a virtuous circle: citizens will be more willing to pay taxes but at the same time more determined to hold states to account for how their taxes are spent. Corruption continues to be prevalent in many African countries, with a corrosive effect on growth and poverty reduction. The poor bear a disproportionate share of the burden of corruption, being forced to pay extra for basic services. Transparency International’s Corruption Perceptions Index records some modest improvements in recent years, but still ranks the majority of African states at less than 3 out of 10. Transparency ensures that public officials, civil servants, managers, board members and businessmen act visibly and understandably, and report on their activities. And it means that the general public can hold them to account. It is a safeguard against corruption, and helps increase

12 Michael Johnston, ‘Good Governance: Rule of Law, Transparency and Accountability’ Colgate University. Available at http://www.unpan1.un.org

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public trust in government institutions. Transparency can thus be summed up as the degree of openness with which public affairs are managed. iii. Accountability

Accountability entwines greatly with financial control of government institutions during the process of budgetary preparation, sustenance and utilization in Africa because it provides for a strong regulatory mechanism13. Accountability, in the context of a Government, means the responsibility of the institutions, which constitute the Government, to discharge their mandates under the Constitution for the benefit of the people at large without fear, favor or discrimination. From this generalization flows the responsibility of public officials and government institutions to the State for their actions in the discharge of their duties. Various studies have identified corruption as a main cause for the failure of Governments to meet their responsibilities to the people they lead. Corruption damages economic development, hinders the growth of democratic institutions, and impedes the ability of developing countries to attract foreign investment. Accountability relates to transparency and refers to the extent to which it is possible to identify and hold public officials to account for their actions. In simple terms transparency and accountability are related and go together. Openness determines answerability and answerability reinforces openness. The absence of transparency and accountability provides fertile ground for corruption to thrive. If corruption is seen as a disease, then transparency and accountability are important cures.

13 PLO Lumumba, ‘Budgetary Control and Corruption in Africa’ Paper presented at the Konrad Adenauer Stiftung Stakeholders Conference at Lake Victoria Serena Resort and Spa, Entebee Uganda on 22nd -25th July, 2014.

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iv. Public Participation

Public participation has been defined as a form of social accountability mechanism which with a well-defined legal and policy framework requires Governments to disclose information and be transparent, to explain and justify every step made and answerability of Government performance and also acceptance of both good and bad consequences of every decision made. Public participation takes the form of citizen participation in dialogue platforms, public hearings, public forums, citizen advisory boards, government contact committees, direct feedback either in person or electronically (considering the rapid growth of the Information Communication and Technology sector), citizen charters including integrity pacts, citizen jury or people verdict and even through public interest litigation.

F. The advantages of public participation in fiscal control of a country

(a) It opens up all Government processes, structures and

procedures during budgetary preparation and implementation.

(b) It provides for a venue of transparency, accessibility and accountability with regard to fiscal policy formulation and implementation.

(c) It provides legal standing for interested or affected persons, organizations and where pertinent, communities to appeal from, or review decisions, or redress grievances on resource allocation during budgetary preparation, with particular emphasis on persons and historically marginalized communities, including women, youth and disadvantaged communities.

(d) It regularizes monitoring and re-evaluation of budget spending such as where there was too much and unnecessary spending of public funds.

(e) It provides a foundation for reasonable balance in the roles and obligations of Government as whole and non-state actors in budgetary decision making processes to promote

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shared responsibility and partnership, and to provide complementary authority and oversight.

(f) It provides for recognition and promotion of the reciprocal roles of non-state actors’ participation and governmental facilitation and oversight.

Public participation is therefore sine qua non in fiscal control and in bridling corruption when proper policy and legal frameworks in public finance management are instituted. This is because the public can regularize and control public finance management and budgetary processes through public service accountability monitoring, public expenditure tracking surveys, sectoral budget tracking, and lifestyle checks among others. The principles of public participation, transparency and accountability are core to effective delivery of public service by government institutions as they ensure that the rectitude of government budgets with regard to the management and procurement processes and preparation procedures are in line with the laws and regulations of the land.

G. The Role of Professionals in Improving the Public Sector

Countries that perform well economically embrace the need for complementarity between the states and market forces as a gateway for the promotion of national development.14 Thus, the congruence between political systems and choices of economic policies is very important. In light of the afforested, public management is the kingpin of a country’s economy. This is because it affects the market forces in terms of supply and demand and by extension economic growth. If Africa is to realize her potential, her professionals must be in the forefront of offering exemplary services.

14 See, Colin Bradford, "East Asian "Models": Myths and Lessons?” in Jerry Lewis and Valerie Kallab, Development Strategies Reconsidered. Transaction Books, New Brunswick, 1986, p. 118.

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Today, many African countries and institutions whose financial statements are annually and ‘ritualistically’ endorsed, suffer from anemic depletion of funds to the detriment of the society. This obviously calls into question the quality and integrity of services that African professionals offer. Every African professional must now take a solemn vow to discharge his or her duties with dedication and honesty if the continent is to realize her dreams. The way forward for African governments is to build effective, accountable and inclusive institutions at all levels of government, and this includes;

(i) Enhancing the fight against corruption and strengthening the anti-corruption systems already in place;

(ii) Developing effective, accountable and transparent institutions at all levels of government to ensure that service delivery is effected to all citizens;

(iii) Ensuring responsive, inclusive, participatory and representative decision-making at all levels by the public to increase public trust, transparency and accountability ;

(iv) Ensuring public access to information and protecting fundamental freedoms, in accordance with national legislation and international instruments.

(v) Ensuring that professionals discharge their duties without undue influence.

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H. Major Challenges Affecting The Public Sector In The Developing Countries

i. Corruption Corruption is one of the fundamental evils of our time. It rears its ugly head everywhere. It lies at the root of almost all important problems-or at least prevents their solution- and has a particularly devastating effect in the poor regions of the world, where it holds millions of people in bondage to suffering, poverty, diseases, violent conflict and exploitation15. There is abounding evidence in developing countries indicating that corruption negatively affects growth and development. In the words of the late Kofi Annan, the former United Nations Secretary General:

“Corruption undermines economic performance, weakens democratic institutions and the rule of law, disrupts social order and destroys public trust, thus allowing organized crime, terrorism and other threats to human security to flourish…And it is always the public good that suffers

ii. Poor Leadership Dambisa Moyo in her Book “Dead Aid” once said that:

In a perfect world what poor countries at the lowest rungs of economic development need is not a multi-party democracy, but in fact a decisive benevolent dictator to push through the reforms required to get the economy moving.16

Most of African leaders tend to abuse power for various reasons. They often put their personal interests first than anything else. Yet their self-interest may not be the interest of the public at large. Therefore, in order to improve the public sector in Africa. African leaders should commit themselves and lead by example. Greg Mills in his Book “Why Africa is poor and what they can do about it”

(page 1) says that:

15 Peter Eigen, founder of Transparency International speaking on Corruption in March 2003. 16Moyo, Dambisa. Dead aid: Why aid is not working and how there is a better way for Africa. Macmillan, 2009.

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The main reason why Africa’s people are poor is because their leaders have made this choice. The record shows that countries can grow their economies and develop faster if leaders take sound decision in the National interest. This is also true in countries which have performed well.17

I. A prosperous Future of Africa in the Global Economy

This presentation is made on the understanding that Africa Agenda 2063 spells out the continents’ desire to improve the lives of her people based on the following seven (7) pillars

a. Agenda 2063 1. A prosperous Africa based on inclusive growth and sustainable

development 2. An integrated continent, politically united and based on the ideals of

Pan-Africanism and the vision of Africa’s Renaissance 3. An Africa of good governance, democracy, respect for human rights,

justice and the rule of law 4. A peaceful and secure Africa 5. An Africa with a strong cultural identity, common heritage, shared

values and ethics 6. An Africa whose development is people-driven, relying on the

potential of African people, especially its women and youth, and caring for children.

7. Africa as a strong, united and influential global player18

b. Regional Organization

• Economic Community of West Africa States (ECOWAS) Comprising of fifteen member states, namely: Benin, Burkina Faso, Cape Verde, Cote D’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo whose mission is to promote economic integration in all fields of economic activity, particularly industry, transport, telecommunications, agriculture, natural resources, commerce, monetary and financial questions and social and cultural matters.

17Mills, Greg. Why Africa is poor: and what Africans can do about it. Penguin Random House South Africa, 2012. 18Besada, Hany, and Ben O’Bright."Maturing Sino–Africa relations." Third World Quarterly 38.3 (2017): 655-677.

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• Southern African Development Community (SADC) Comprising of fifteen member states namely: Angola, Botswana, Democratic Republic of Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe, SADC sets to ‘promote sustainable and equitable economic growth and socio-economic development that will ensure poverty alleviation with the ultimate objective of its eradication, enhance the standard and quality of life of the people of Southern Africa and support the socially disadvantaged through regional integration.’

• East African Community (EAC) With six member states namely: Kenya, Uganda, Tanzania, Burundi, Rwanda and South Sudan whose objectives are to develop policies and programs aimed at widening and deepening cooperation on political, economic, social and cultural fields, research and technology, defense, security and legal and judicial affairs.

• Inter-Governmental Authority for Development (IGAD) With eight members namely: Djibouti, Ethiopia, Eritrea, Kenya, Somalia, South Sudan, Sudan, and Uganda it aims to promote ‘joint development strategies and gradually harmonize macro-economic policies and programs in the social, technological and scientific fields.’ More specifically, IGAD seeks to ‘harmonize policies with regard to trade, customs, transport, communications, agriculture and natural resources , and promote free movement of goods, services and people, and the establishment of residence.’

• Economic Community of Central African States (ECCAS) Comprising of eleven (11) member states namely: Angola, Burundi, Cameroon, Congo, Central African Republic, Democratic Republic of Congo, Gabon, Equatorial Guinea, Chad, Rwanda and Sao Tome Principe which aims to ‘promote and strengthen harmonious cooperation and balanced and self-sustained development in all fields of economic and social activity, particularly in the fields of industry, transport and communications, energy agriculture, natural resources, trade, customs, monetary and financial matters, human resources, tourism, education, culture, science and technology and the movement of persons.

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• Arab Maghreb Union (AMU) The idea for an economic union of the Maghreb began with the independence of Tunisia and Morocco in 1956. However, the plans never came to fruition. It was not until thirty years later, though, that five Maghreb states—Algeria, Libya, Mauritania, Morocco, and Tunisia—met for the first Maghreb summit in 1988. Its aim was to coordinate relations with countries, foster intra-regional trade and coordinate relations with the European Union. 19 The first Maghreb Summit held in Algeria in 1988 decided to set up the Maghreb High Commission. In 1989 in Marrakech, the Treaty establishing the AMU was signed. The main objectives of AMU are to ensure regional stability and enhance policy coordination and to promote the free movement of goods and services.

c. Cooperation among Countries

Countries cooperate with each other in thousands of ways through international organizations, treaties and consultations. Such cooperation generally encourages the globalization of business by eliminating restrictions on it and by outlining frameworks that reduce uncertainties about what companies will and will not be allowed to do. Countries cooperate.

d. The Emphasis on Science and Technology Science and technology has improved managerial practices and organizational change in the production of goods and services. Increased investments in information and communications technology (ICT) have led to improved quality of capital and labor as we witness the rising skills of the average worker in African economies. Technological change obtained through the returns to research and development and other knowledge-based investments and spillovers from innovation also contribute importantly towards growth.

e. The 4th Industrial Revolution

The 4th industrial revolution which its aim is to have digitally smart factories, cities and entire economies connected to the Internet to boost growth and development of Africa. It has the potential to impact on all industries and all nations, regardless of their location or state of development.

19Møller, Bjørn. "Africa’s sub-regional organisations: seamless web or patchwork?" (2009).

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Today, all business is global, competition comes from everywhere and jobs are borderless.

f. Trade Globalization and trade have been reshaping the world and improving our standard of living, with world trade coming to account for one-quarter of the global GDP. As East Asia’s ratio of exports in goods and Services to GDP doubled to nearly 30% per cent in the two decades to 2000, so their economic growth rate averaged over 10 per cent. Trade has been essential for poor countries, which cannot rely on their domestic market for growth.20

Conclusion

In the years following independence, many African economies were paradigms of chronic underdevelopment. Africa’s missed opportunities are a hard reminder of its unexplored and underutilized potential. However, Africa can no longer remain hopeless and helpless. Evidence from successful experiences within Africa and elsewhere go a long way to show that the past is not everything. Africa can rise again. Prosperity is within Africa’s grasp especially so if Africa can decisively and conclusively reverse its enduring legacy of corruption, nepotism, cronyism, negative foreign influence and most importantly, bad politics. These powerful words must serve as a wakeup call to Africans in all spheres of leadership if Africa’s third liberation, from decolonization through dictatorships to sustainable economic growth is to come alive. African leaders must abandon the culture of primitive accumulation where greed is the creed and embrace a new ethic of service. The process of Africa’s economic renovation Globalization requires strong mental presence and focused leadership if Africa’s growth potential is to be consolidated, accelerated and translated into development.

20Mills, Greg. Why Africa is poor: and what Africans can do about it. Penguin Random House South Africa, 2012. Pp 37-38