Building a robust and enduring and productive capacity in Africa

1. Building a robust and enduring and productive capacity in Africa NEPAD AfricaRecruit Employment & Human Resources Exchange Seminar “Deploying the diaspora option” Challenges, obstacles and opportunities Ralph Tanyi Cranfield University Wembley Conference Centre, London 10-11 March 2005

2. Introduction Africa snapshot at the dawn of the 21st Century

3. Introduction The African plight: The erosion of (human) capital • 1985-1990: An estimated that 60,000 engineers, doctors, and university staff migrated from Africa.  • 1990-present: Average 20,000/year leave Africa. • Some 100,000 expatriates employed in Africa at a cost of about $4 billion per annum.  • over $150 billion of capital flight from Africa since 1975.  • The African continent suffers from haemorrhage of human and fiscal capital. 

4. Challenges: Building a robust and enduring and productive capacity in Africa Human Resources Exchange/Seminar Challenges, Constraints/obstacles and Opportunities - MDGs i- healthcare ii- economic development - Management /capability

5. Challenges: Healthcare UK nurse registration applicants Source: WHO UK government has budgeted USD103 million to attract and retain health workers in 2005.

6. Challenges: Economic development • Dependence on natural resource intensive exports • Marginal manufacturing exports due to a dearth of skills % of exporters by industry Source:Måns Söderbom (2000)

7. Challenges: Two dimensions of skills (i) education and experience of workforce. (ii) operational/underlying efficiency of firms (managerial ability). -A firm’s operational efficiency is a key determinant of both investment and exports. -Exporting is associated with significant fixed costs. >> relatively productive firms with relatively high returns to exporting will afford the costs of international market entry.

8. Challenges Management • Negative picture of management in Africa (reactive, resistant, authoritarian, etc) • Seen through “developing-developed” world paradigm • Little research effort into the nature of people and change management in Africa. - African management is cross-cultural management. Key constructs: Humanistic vs. instrumental cultural values. Concept of locus of human value in distinguishing between; Instrumental view - people as means to an end (predominant western concept), and Humanistic view - people as having value in their own right. Western concept of ‘human resources’ typified by instrumentalism will predominate most post-colonial African organisations in the immediate future.

9. Opportunities The future is African (?) A- Africa’s pop. is expanding steadily; and to rise from just under 800M today to over 2 billion by 2050. B- Africa will have the youngest population during the 21st century. Demographics: destination 2050

10. Opportunities Possible outcomes of the demographic divergence: (i) large number of Africans attracted to Europe to compensate for decline.  (ii) global production to shift to Africa because of its younger population and large supply of labour. C. large share of the global commodity production far into the future.  • e.g. South Africa: • 88% of global platinum reserves, 72% of chromium, 80% of manganese, 30% of titanium, 40% of gold, 44% of vanadium, and 19% of zircon.  It also has 10% of the world’s coal, 10% of its uranium, 8% of its nickel, and 17% of its fluorspar.  • Guinea: 30% of the world’s bauxite.  • Botswana: 25% of the world’s diamonds.  • Zimbabwe: 12% of the world’s chromium as well as large platinum deposits. • The DR Congo: large deposits of copper, cobalt, gold, and other raw materials which have not even been measured. 

11. Opportunities D- Remittances(What about ?) - Important but not a panacea for development. - How to effectively harness remittances towards development? critical factors which will determine Africa’s ability to turn its demographic advantage and natural resource endowment into engines for economic growth will be: [political] governance and, Investment/industrialisation policy.

12. Obstacles/constraints DOING BUSINESS -SubSaharan Africa has the most regulatory obstacles to doing business in developing countries (compared to other poor regions) - Starting a business -plethora of procedures required. -time spent in bureaucracy -cost of procedures Contract enforcement - plethora of procedures and steps(e.g. 58 procedures in Cameroon) - cost of process - Investor protection - Poor capture and disclosure of ownership, quality and availability of financial info.

13. Some good practices India: Annual expatriates diaspora day institutionalised. China: government promotes free movement of students, actively courts overseas professionals (60% FDI accounted for by diaspora). Philippines: government issue USD100 million bond offering to allowing overseas professionals to purchase risk free to capture savings for infrastructure investment. Mexico: Local and federal government match funds programs to attract capture remittances to essential infrastructure – roads, schools, hospitals. Diaspora networks: Some 120 groups of highly skilled foreign nationals in more than 40 developed countries, of which Africans: thinkers, inventors, entrepreneurs, artists, who meet and brainstorm about their homelands over the internet. These can provide a steady stream of ideas, experience, technology, venture capital for development.

14. Conclusion - Immigration is a major domestic and foreign policy in international relations - Flight of the educated African is more a symptom than the cause of Africa’s woes. - Diaspora capital will be a major development instrument in Africa’s future - (as a source of fiscal and skilled human capital), but many obstacles remain. - Incentives that attract diaspora investment will have a strategic impact on increasing manufacturing exports and industrialisation. - Many African countries remain unsold to the idea of formally engaging with the diaspora human capital. The most enterprising of the African countries that will be best able to capitalize on [their] overseas human capital. - An urgent need for a benchmark Diaspora Charter at the level of each African Union member country. END