Human Capital - Africa’s missing piece of the puzzle
There has
been no continent whose definition in itself has been as paradoxical as Africa.
A continent with an abundance of resources but rife in poverty. A people who
are hospitable but torn by war until recent times. A people with an
unparalleled cultural heritage of medicinal plants and healing techniques but
battling with common diseases like malaria and tuberculosis. This same Africa
that has birthed great minds in the likes of Kwame Nkrumah, Nelson Mandela,
Kofi Annan is the same continent that has more than 35% of its adult populace
as illiterates. The same Africa whose people's built the empires of Europe and
northern America cannot seem to even build their own continent to leave the
status of the long held title of "under developed" or 3rd world.
There certainly is a gap to bridge in order to extinguish this paradox and
engender a new Africa.
Africa is continent blessed with
an abundance of natural resources. These include diamonds, salt, gold, iron,
cobalt, uranium, copper, bauxite, silver, petroleum and cocoa beans, but also
woods and tropical fruits – the list is inexhaustive. Much of its natural
resources however remain undiscovered or barely harnessed. Most Africans are rightly
proud to hail from a continent
of such great endowments.
African mineral reserves rank
first or second for most key minerals. The 2012 share of world production from
African soil was bauxite 7%; aluminium 5%; chromite 38%; cobalt 60%; copper 9%;
gold 20%; iron ore 2%; steel 1%; lead (Pb) 2%; manganese 38%; zinc 1%; cement
4%; natural diamond 56%; graphite 2%; phosphate rock 21%; coal 4%; mineral
fuels (including coal) & petroleum 12%; uranium 18%. In fact much of the
land south of the Sahara is arable all year round.
Yes, Africans pride themselves in
these natural resource endowments, but ostensibly missing in the list of
resources Africans boast of and that the continent is known for is
human capital endowment.
In the World Economic Forum 2015 report
on Human Resources Utilization, in sub-Saharan Africa, Mauritius (72) holds the
highest position in the region. While another six countries rank between 80 and
100, another 17 countries from Africa rank below 100 in the index. South Africa
is in 92nd place and Kenya at 101. The region’s most populous country, Nigeria
(120) is among the bottom three in the region, while the second most populous
country, Ethiopia, is in 115th place. Africa as a continent ranks lowest.
According to the World Economic Forum,
Africa produces only 1.1% of global scientific
knowledge. The continent has just 79 scientists per millions of
inhabitants compared to countries like Brazil and United
States where the ratio stands at 656 and 4,500, respectively.
This has however not always been
the case. Although the authors of recent history pay little tribute to it,
Africa has had an illustrious past in the fields of medicine, scientific
discoveries, architecture, art, music, industrial innovations and various
advanced forms of knowledge.
In Education The Library of
Alexandria which existed in Egypt well before 300 BC was considered the world’s
largest at the time. The same goes for the University of Sankore, Sidi Yahya University, and Djinguereber University -the three
philosophical Universities which existed in Mali as far back as the 12th
Century. By the end of Mansa Musa’s reign the Sankore University boasted of
over 25,000 students and over 1,000,000 manuscripts. Scholars and the learned
came from all over the world to study in Timbuktu.
In Mathematics Ancients texts
such as the Rhind Mathematical Papyrus and the Moscow Mathematical Papyrus prove that
the Egyptians were capable of performing the four basic mathematical
operations—addition, subtraction, multiplication, and division. They used
fractions, computed the volumes of boxes and pyramids, and even calculated the
surface areas of rectangles, triangles, circles and spheres. They understood
the basic concepts of algebra and geometry, and could solve simple sets of simultaneous equations and had
grasped the principles of the Pythagorean Theorm. Another major achievement
found in Africa was the advance knowledge of fractal geometry and mathematics. This
knowledge is shown to have been applied in wide aspects of African life from
art, social design structures, architecture, to games, trade, and divination
systems.
In medicine, we find that, around
800 BC, the first psychiatric hospital and insane asylum in Egypt was built by
Muslim physicians in Cairo. Also, around 1100 BC, the ventilator was invented
in Egypt. Tetracycline was being
used by Nubians, based on bone remains found between 350 AD and 550 AD. The
antibiotic was in wide commercial use only as recently as the mid-20th century.
In 1285, the largest hospital of
the Middle Ages and pre-modern era was built in Cairo, Egypt, by Sultan Qalaun
al-Mansur. Treatment was given for free to patients of all backgrounds,
regardless of gender, ethnicity or income.
There is a long list of other several
contributions to the world’s body of knowledge in almost every field of
endeavour. This is however history. The current state of Africa’s knowledge
based capital pales in comparison to its illustrious past.
What the advanced nations have
managed to achieve with great success is the commercialisation of their
discoveries and advancements to create a valuable competitive advantage for
their peoples. This translates into a
higher per capita contribution to GDP and better standards of living.
As at 2016, Africa's population
of 1.216 billion represented 16.4% of the world’s population. Although this
makes Africa the second largest and second most populous continent, its
contribution to world GDP has been circa 2.5% making it the continent with the
lowest productivity per person.
Juxtapose that with Japan for
instance that represents only 1.7% of the world’s population but contributes
6.65% of the world’s GDP in 2015. How can Japan be doing three times more than
Africa with far less land mass, no natural resource endowments and
significantly far fewer people?
The fact is that the
value of what is produced by skilled labour is considerably many times that of
unskilled labour. According to the Africa development bank, the informal sector
in Africa contributes about 55 per cent of Sub-Saharan Africa’s GDP and forms
80 per cent of the labour force. Nine in 10 rural and urban workers have
informal jobs (unskilled) in Africa and most employees are women and
youth.
This is why Africa’s contribution
in the global scheme of things counts for so little. Although Africa is
blessed with such resources it is evidently intellectually almost bankrupt in
comparison to the rest of the world.
Table 1 represents a list of the
top 10 countries that have leveraged their human capital the most.
Their
relative contribution to world’s total Gross Production supports the argument
that there exists an undeniable positive correlation between having a strong
human capital base and strong national productivity.
These countries have mainly only
their intellect and human resources to boast of. Not gold, not silver, not
diamonds but brains at work and yet they are doing far better.
The Human Capital Report 2015
defines a nation’s human capital endowment as—the skills and capacities that
reside in people that are put to productive use—this can be a more important
determinant of its long term economic success than virtually any other
resource. This resource must be invested in and leveraged efficiently in order
for it to generate returns—for the individuals involved as well as an economy
as a whole.
This is the open secret of how
the developed nations have gotten so far up the prosperity ladder. In fact, the
closer you look the more you discover just how far the continent has lagged
behind the rest of the world in developing its labour force.
The Human capital heat map
(below) paints the bleak state of Africa’s human development when compared to
the rest of the world.
Human Capital Heat Map 2015
Several factors however account
for this state; some exogenous others self-inflicted.
Colonial Legacy:
Harnessing a nation’s human
capital endowment isn’t an ideal that is realised over-night. The nations
highlighted in green in the map above spent hundreds of years developing their
peoples to be productive, innovative and relevant to the new world order that
they foresaw emerging. Africa on the other hand spent the last few centuries
specialising in being the world’s pool for menial labour.
For at least 500 years, the
African continent has been forced to till the soil to feed the world and mine
the depths of the earth to fuel the industrial revolution of many western
nations today highlighted in green on the map – tasks that required Braun not
Brains. The map above is a reflection of some of the adverse effects of
colonisation and slavery. There has simply been no time or need for Africa to
develop such advanced skills.
The travesty of this sad story is
that the continent will have to play catch up for a very long time even if
drastic steps are taken to remedy the situation.
Low Investment in Human Capital:
Post-independence, the colonizers
sought to create a permanent class of people who will always be subjugated to
them. Therefore little attention and effort was put into developing Africans to
possess skilled labour. That way they could still have access to the resources
without having to be physically present. What you see in the Human Capital Heat
Map is a conspiracy by design and not entirely borne out of lack of effort on
the part of the peoples of the continent.
Investors, global companies,
colonial governments and even religious establishments conspired and combined
their forces to prevent Africa from becoming a powerful force in this world.
The unfortunate reality for
Africa is that almost the entirety of foreign direct investment has been either
to extract its natural resources or to exploit its vast markets by providing
services like banking, telecoms and transport. The little investments that go
towards human development in Africa are often grants and charity handouts from
Non-Governmental Agencies and donor partners. These as if by design have been
often woefully inadequate to equip the continent and keep her at par with the
rest world.
Although African governments
spend on average 18% of their expenditure budget on education (higher than any
other continent) it is still inadequate to make a noticeable dent on the years
of exploitation, legacy of colonisation and the reality of neo-colonisation.
The glee and alacrity with which
African governments hail the discoveries of Oil, Gold and other resources under
the misguided impression that these new finds will herald a new dawn of wealth
and prosperity easily betrays their wrong prognosis of the challenge at hand and
consequently their wrong prescription of a solution. African Leaders are blind
to the opportunities that are waiting to be harnessed and lack the political
will to bring about the improvements needed.
According to a 2013 study by
OECD, South Korea which attained independence together with Ghana in 1957 was
the best (ranked 1st) in Mathematics and Science out of 76 countries
compared. Ghana ranked 76th.
The difference is the relative
levels of investment that goes into education. South Korea invests on average
more than $11 billion dollars into education yearly and students attend school
seven days a week. The country is nearly 100% literate. In contrast, Ghana's
government 2016 budget, allocated approx. $1.4b (1:1.45) equivalent towards
education with a sizeable portion of this going towards building educational
infrastructure. Africa has simply not invested enough to make it globally
competitive.
Absence of Peace and Stability:
It takes many years of persistence in peaceful and
benign conditions to build that critical body mass of intellectual assets that
the world’s leading nations do boast of today.
Since the 1960s, no continent has known more war and
instability than the African continent. Such conditions displace and rob the
youth of the safety and tranquillity they need to develop themselves. Instead
of investing in their young ones, some African governments tend to invest more
in feuding factions by investing in guns and ammunitions. Although there is
relative peace in most parts of Africa today, the years invested in the
unprofitable ventures of war has left the land intellectually impoverished.
Brain Drain:
Africa continues to lose it best talents to
developed nations who can afford to pay several times more for such talents and
provide the conditions necessary for them to thrive.
According to Thabo Mebki former South African
President, since 1990 Africa has lost more than 20,000 of its academic
professionals to other nations. It is estimated that more Africa scientist and
engineers live and work in the USA and in the UK than anywhere else in the
world.
Competition for the skills of the best and
brightest this world has to offer is global and Africa has been intellectually
impoverished by this brain drain phenomenon.
Lack of a Clear Strategy and Plan of Action:
Of Africa's 1.2 billion
population, 41% are under the age of 15. This is a raw resource that is waiting
to be harnessed.
According to a research by
Mckenzie, Africa’s labour force is expanding, in contrast to what’s happening
in much of the rest of the world. The continent has more than 500 million
people of working age. By 2040, their number is projected to exceed 1.1
billion—more than in China or India—lifting GDP growth.
This presents both opportunities
and challenges. This human force can either become Africa's new factor
endowment that will help it benefit from its natural resources and usher in a
golden age of prosperity or can become a liability and a drain on the entire
planet.
According to a Mckinsey &
Company report of Human Capital in Africa, over the last 20 years, 66% of the
continent’s increase in GDP per capita came from an expanding workforce, the
rest from higher labour productivity.
But "education is a major
challenge, so educating Africa’s young has to be one of the highest priorities
for public policy across the continent" the report concludes.
If Africa can provide its young
people with the education and skills they need, this large workforce could
become a significant source of increased global consumption and
production. This kind of advancement takes long term planning and
execution to attain. Leaders on the continent are yet to show the devotion
needed to make impressive inroads.
There are still Africans living
today who continue to make significant strides in adding to the world's body of
knowledge
So what is the way forward? What
concrete steps can be implemented to accelerate the development of Africa’s
Human Capital? What lessons can Africa learn from the developed world?
Make Education Free and/or Accessible.
Free quality education must be a
core strategic imperative. One common feature of all countries that take human
capital development seriously and are reaping the benefits thereof is that
either all or most of the education provided is free and accessible.
Cuba is one of such countries. It boasts of the
best educational system in Latin America and it is free.
The entire educational system is fully subsidized
by the government, meaning that Cuban students at all levels can attend school
for free. To ensure that free doesn’t mean cheap, the largest chunk of Cuba
budget goes towards education. This has been the case for the past 50 years.
In the UK, public education is
free until secondary school. Once you
make it into a tertiary or a vocational institution you can borrow up to your
full tuition fee or up to £9,000 a year for university tuition to fund your education.
Apart from these provisions,
there are private lending companies and banks that have products to support
students once they successfully secure an admission letter from selected
schools. Additionally, scholarships and grants abound to help citizens get up
the educational ladder. Similar arrangements exist in most developed nations
that ensure they remain ahead of the human capital index.
In the end it is a win-win
situation. If Africans can have access to such levels and varied sources of
funding, then those investments will go into the various institutions of
learning to improve delivery and in the end produce high calibre graduates for
the job market. The productivity will increase as would the GDP. Africa will
have created a viscous cycle of prosperity. African governments need to make
education free, underwrite loans for academic purposes and enter into
private-public initiatives to open up their financial markets to those who want
to advance their skills. These interventions must be targeted and focused on
those particular fields of study that will promote productivity.
Make it Relevant:
African educational systems have been cast on the
module of their colonial masters with no particular effort being made to tailor
the investments to meet local needs.
According to Thabo Mbeki, “Africa recruits and hires expats and pay more
than $4 billion dollars a year…the $3.6 billion dollars we spend training
professionals who we lose every year is equal to the $4 billion that we pay the
150,000 that we import."
There is clearly a mismatch between the talent we
produce and the talent we actually need. Some of what we produce is clearly
irrelevant .This has the ripple effect of the continent ultimately being unable
to achieve synergy between its natural resource endowment and human capital
stock.
As aptly put by Ali Mazrui, “Africa produces what
it does not consume and consumes what it doesn’t produce”. There is clearly a
strong argument for a re-alignment of local talent to meet local demand and
opportunity.
Bring Back our Brains:
Directly derived from the point
above is the need for Africa to become an attractive destination for its own
talent. There are millions of talented Africans living abroad with diverse
skills and expertise critically needed for nation building.
By appealing to the patriotic
feelings and nationalistic sentiments of its citizens in the diaspora, African
governments can win the global price war in attracting its talents. This drive
will however not be effective if consideration for competence and efficiency
doesn’t begin to outweigh the culture of nepotism and the “whom you know”
syndrome.
Also, you cannot ask someone to
leave the comforts and allure of the developed world to join you in furtherance
of an African dream when the same government officials are pilfering the state
coffers and living in extreme luxury at the expense of its poor. It won’t work.
Leverage on Technology:
Technology can provide a robust platform on which
significant gains can be made quickly in providing access to cheap but quality
education.
Countries like Japan, Singapore and China are good
examples of countries that are leveraging on e-learning tools such as open
course (crowd source), online class room sessions, chat rooms, e-books and
e-libraries to provide access to many millions. Why not Africa?
Although internet penetration in Africa is around
28% compared to 57% for the rest of the world, one can take comfort in the fact
that the rate of growth in Africa is higher than anywhere else in the world.
The internet penetration in Kenya, South Africa and Nigeria for instance are
growing at 41%, 27% and 17% respectively year on year and effort must be made
to harness this opportunity.
Garbage in Garbage Out:
African governments must be ready to invest their
best human resources into developing the next generation of human resource. How
can the worst produce the best? It just doesn’t make any sense but
unfortunately that is what is happening across most African countries. The
system is designed to accept the worst university entrants to train as
educationists.
Finland has for many years ranked as one of the
nations with the best educational systems. Several factors account for this but
chief amongst these is the quality of their teaching staff. Finnish
Universities regularly turn away 9 out of 10 applicants. The 10% (the best of
the best) that make it in have to undergo series of interviews and
psychological assessments to confirm their suitability as teachers and then
finally go through a 5 to 6 years master’s programme before they are allowed to
teach their first primary class. Finnish teachers are amongst the best rewarded
anywhere on this planet. The quality of the final product is equally unmatched.
African governments must make the teaching
profession lucrative and fulfilling enough to attract the best minds as the
quality of input invariably determines the quality of the output.
If these developed nations in
spite of their lack of factor endowment in natural resources have created such
significant wealth by harnessing their intellectual resources, then why not
Africa? Africa’s error of the ages is in believing that all endowments
have to be God given. No. Endowments can be nurtured out of nothing.
In conclusion, African
governments must begin to de-emphasis their obsession with their natural
resource endowment. The real jackpot is in human capital.
To harness this great potential
African governments must develop long term strategic plans that will address
Africa’s current skills gap and takes cognisance of the world’s future demand
for human capital. Both government and the private sector must invest heavily
in this vision and the technology to make it a reality. The financial markets must be structured to
provide funding for the investment in human capital. The millions of Africa
talent living abroad must be encouraged to return and supported to successfully
embed the best practises from around the world.
When the African story is told in
the future it should be full of pride in innovations, inventions, knowledge and
advancements in science and technology and of pushing the frontiers of space
travel and of major discoveries.
Africans must start writing the
lyrics and the melodies today for a new song; not only of Nature gifts of
resources but of its human exploits and achievements.
Date: 31st December
2016
Author: Nii Kpakpa Quartey ACMA,
CGMA
Email: jouradequartey123@gmail.com
Sources:
