African Bank: Nationalisation not a good idea

The turmoil in North Africa has hit growth across the continent but may be prompting important indirect political changes, the chief economist of the African Development Bank said on Monday.

In a speech, Mthuli Ncube said the unrest in Egypt, Libya and Tunisia will probably reduce economic growth in North Africa this year to 0.7% from 4.7% last year. Overall, Africa’s growth is estimated at 3.7% in 2011, down from 4.9% last year.

Further south, Ncube said economies have been affected by a drop in money sent home by Africans from elsewhere on the continent who had been working in North Africa. Niger, for example, had 200 000 citizens working in oil-rich Libya, according to bank statistics.

Sub-Saharan African countries with high unemployment should also be wary, Ncube said. He noted in an interview with the Associated Press after his speech on Monday that former South African president Thabo Mbeki — which is struggling to cut unemployment, particularly among the young — was ousted in 2008 by his own African National Congress in campaign led by the party’s youth wing. That might have been democratic South Africa’s version of upheavals in the north, Ncube said.

South Africa, the continent’s strongest economy, has suffered from the global recession more than other African economies, and is recovering more slowly, according to the annual economic outlook the African Development Bank released on Monday. Its GDP is expected to grow 3.6% this year.

Ncube said South Africa should draw lessons from Nigeria, where growth predicted at 6.9% in 2011 is tied in part to reforms that have encouraged entrepreneurship. Or from Kenya, where growth predicted at 5.3% is linked to East Africa’s progress in creating a regional market and improving infrastructure.

Ncube also cautioned South Africa against nationalising mines and other industries, a proposal pushed by the ANC Youth League but opposed by key party leaders and by businesses.

“Nationalisation, it’s not a good idea,” Ncube told the AP. “Governments themselves do not create jobs. They create an environment for jobs to be created.”

Libyan investment
Another knock has come from the reduction in Libyan investment across Africa as well as declining tourist numbers from that country, Ncube said.

But he said that while the economic impact was painful, the long-term effect of political changes made it worthwhile.

“Democracy is far more important,” Ncube said.

He noted that protests last month forced Senegal’s longtime president to cancel a proposed legislative change that would have made it easier for his son to take charge of the West African nation.

“It was really the North Africa effect,” Ncube said. “The youth will not tolerate any behavior they don’t perceive as democratic.”

Ncube also cited Morocco, which has seen protests calling for change even though the king remains popular. The king presented a new Constitution, approved by 98% of voters last week, designed to curtail his powers and make his government more accountable.

Ncube said the large number of unemployed youth, who used social networks to organise, helped drive protests that forced out a president in Tunisia and were followed by uprisings around the Arab world. – Sapa-AP

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories


Already a subscriber? Sign in here


Latest stories

DRC: To restore security, address impunity for rights violations in...

Diplomatic and military action alone will not solve the problem of violence against civilians

Chile’s lithium a poisoned chalice

It provides profit to billionaires but exhausts the land and its people

World Lion Day: Five young lions rescued in Romania arrive...

The country’s captive lion population of 9 000 is three times the size of the wild lion population.

Marikana lawsuits to be finalised by end of August

The state has already paid out R170-million in claims following the August 2012 massacre

press releases

Loading latest Press Releases…