Dr Kingsley Chiedu Moghalu, Deputy Governor of the Central Bank of Nigeria (CBN), recently delivered a public lecture on Africa’s development at the London School of Economics (LSE). The lecture, entitled “Beyond Africa Rising”, drew on his recent book, “Emerging Africa: How the Global Economy’s ‘Last Frontier’ Can Prosper and Matter.”
Dr Moghalu was on a mission to challenge the current orthodoxy about Africa’s development and to articulate a new vision for the continent.Africa, he began, may be emerging, but it is far from rising. He argued that recent macroeconomic stability, including low inflation, high GDP growth, and high returns on investment, has led to the growth of the “Africa rising industry,” and to an “opportunistic” focus on Africa as the ‘last frontier’ of profit.Yet, Africa has not emerged, let alone risen as a co-creator of global prosperity: its share of world trade is just 3%; it attracts less than 4% of total world FDI; and its total GDP, at $1.6 trillion, is just about the GDP of Brazil.
So, why has Africa failed to rise? Dr Moghalu advanced two reasons. Africa is underdeveloped, he said, because it lacks a worldview in its economies and in its governance, noting that worldview is the secret of the rise of West and the East. Secondly,globalisation has hurt the continent more than it has helped it. Africa, he said, is not ready for globalisation.From these two “fundamental understandings,” as he put it, came his big ideas, his ‘new’ paradigm for Africa’s development.He urged African countries to adopt an inward looking, self-sufficient industrialisation policy. To this end, he recommended that African countries should combine state capitalism and crony capitalism, adding that cronyism is“particularly suited to African countries; it’s a reality of our lives.”
Dr Moghalu may not be a Marxist or even a neo-Marxist, but he is certainlyof the radical and structuralist school of international relations. He believes that globalisation has condemned Africa to the periphery of the global economy, and favours a more muscular state hand on the levers of capitalism. His thesis is that Africa needs to be self-sufficient so that it can “short-circuit” globalisation and “liberate itself from the oppressive dominance of globalisation.”
These areprofound ideas that can have paradigmatic effects, and define the terrain of policy discourse. The fact that the proponent of these ideas has significant institutional access to critical policy making arenas as deputy governor of CBN also gives the ideas a lot of potency as they can feed into and shape policy making.
It is for these reasons that we need to examine the worldview that Dr Moghalu has constructed to correct for any error. After all, as a scholar once said, “(e)ven the genius in drafting a worldview sometimes fails to avoid contradictions”, and the philosophical systems constructed by great thinkers are not always without fissures and flaws. It is in this context that I review in this piece Dr Moghalu’s LSE lecture.
Globalisation is Dr Moghalu’s biggest bugbear. He presents it as a dangerous phenomenon that African countries should cut loose from through a self-reliant economic policy. These anti-globalisation and self-sufficiency worldviews, however, pose enormous challenges.For instance, the idea that, in a world of complex interdependence and linkages, a nation-state can ignore global economic realities and do what it wants at home is nothing but a false prospectus.As a central banker, Dr Moghalu will be familiar with the standard Mundell-Fleming theory, which is the starting point for analysing the effects of global finance on national macroeconomic policy. Global interconnectedness has changed the world, and the glory of independence is nothing but a mirage.
But globalisation is not just about the constraints it places on policy autonomy; it’s also about the huge opportunities it creates. Since the 1990s, globalisation has helped to liberate economies and spread prosperity across the world, including in Africa. Recently, Nigeria rebased its economy, due to new economic activities in the telecommunication and entertainment sectors, and suddenly became the largest in Africa.These new sectors owe their emergence and growth to globalisation. For example, Nigerian musicians and actors are able to perform in London, New York and other world capitals because of the performing, recording, and broadcast rights that countries are obliged to protect under the rules of the World Trade Organisation (WTO)and the World Intellectual PropertyOrganisation (WIPO). The use of mobile phones and the internet has transformed lives and business in Africa, with Nigeria having 56 million internet users, and Egypt 35 million.The global interconnection and interoperability of telecommunications traffic across national borders are facilitated by global telecommunications rules under the International Telecommunication Union (ITU). So, when Dr Moghalu criticised the “uncritical embrace of globalisation and its institutions and agents in the mistaken belief that African countries are obliged to do so as members of some presumed international community or global village”, one would assume he is not suggesting that African countries should withdraw fromglobal economic institutions, such as the WTO, WIPO or the ITU, or ignore their rules.
There is another contradiction in Dr Moghalu’s view of globalisation. The secret for Africa’s development, he said, is ininnovation. Nothing can be truer; after all, the key mechanism for convergence at the international level is the diffusion of knowledge. Poor countries can catch up with rich ones to the extent that they achieve the same level of technological know-how, skill and education. So, Dr Moghalu is right to privilege innovation as one of the key drivers of progress. However, his view on innovation cannot square with his argument that Africa is not ready for globalisation. You need openness and, by extension, globalisation to achieve technological convergence. As Thomas Piketty powerfully puts in his recent book, Capital in the Twenty-First Century, “The diffusion of knowledge is not like manna from heaven: it is often hastened by international openness and trade”, adding that “autarky does not encourage technological transfer.” Dr Moghalu will, of course, protest that he is not advocating autarky, but it’s difficult to read anything different from his prescription of an inward-looking economic policy and self-sufficiency.