Business

Africa shifts to the periphery at World Economic Forum

2019-02-04 14:53

With 60% of arable land globally and a projected demographic dividend of more than one-quarter of the world’s total under-25 population by 2030, Africa is set to become the future bread basket of the world and the largest contributor to the global workforce.

Despite this, one thing that was clear at this year’s World Economic Forum (WEF) in Davos was that the continent had moved to the periphery in the face of rising concerns about advanced world economy issues, including climate change, data governance issues and geopolitical tension.

Climate change and its related effects were the major themes for this year’s WEF. Of the top five global risks outlined in this year’s Global Risk Report, released prior to the commencement of the forum, three related either to climate change or negative weather-related effects.

Although climate change has featured at previous Davos meetings, its severity and resulting effect was brought home by natural historian Sir David Attenborough. In his acceptance speech at the Crystal Awards Ceremony for individuals who have excelled in various fields, Attenborough related his personal experience of how nature had changed over the years, including more extreme weather patterns, increased pollution in the oceans and a dramatic decrease in biodiversity.

Technology was also a key theme, both as a risk to jobs and a source of progress to the business community, government and individuals.

Data governance, however, remained a critical issue, along with information security.

The adoption of three different and far-removed approaches to data management by Europe, the US and China highlighted the gap that had manifested as a result of the destruction of multilateralism.

Through highly regulated data protection laws that came into effect last year, Europe had taken a strict stance in terms of privacy laws.

By contrast, the business-led US approach was more practical and pragmatic, looking at what the data would be used for to determine how it would be protected and stored.

On the other hand, China’s approach was that data was a public good with no requirement for protection.

More importantly, a significant takeaway from the conversations was that Africa’s data was stored outside the continent, raising pertinent questions about ownership, storage, right of access and privacy.

It became clear that there was no centralised architecture for governance over this data, which had accelerated and multiplied at a rate that had left the continent lagging behind on governance and the protocols on which all the protection mechanisms could be delivered.

The need to avert future data breach crises was real and the absence of global governance structures and institutions that were relied on in the past to lead the way in the creation of global governance standards was concerning.

There was great concern about decelerating global trade, with the business community particularly anxious about the US-China trade war and the self-inflicted Brexit quagmire.

Contestation of leading the next technological revolution was seen to be a factor that might prolong the spat between the two nations.

Closer to home, Africa continued to encounter challenges implementing the Continental Free Trade Area agreement signed last year, particularly on the creation of value and benefit for the signatories.

Although infrastructure remained a major obstacle to Pan-African trade, the focus had been on tariff barriers. Making our way into the fourth industrial revolution implied more interconnectedness and serious considerations about education, including introducing technology and being technologically savvy at a young age.

From an investment perspective, compliance burdens continued to plague South Africa and were a serious concern for investors, including crime and, to a lesser extent, black economic empowerment.

But, with the immediate challenges, there were upsides – including showing how South Africa was tackling various issues, such as Eskom, governance failures in state-owned enterprises; and serious efforts to tackle corruption. We did not convince anyone that we had a magic wand to transform the economic status quo and it was regarded that there remained a lot of work to be done, especially around regaining investor trust and confidence and where we saw economic growth coming from.

It could be argued that the WEF demonstrates a disconnection between the global elite and the general population. But it could be a good platform to take stock of what plagues the world, and to explore how business and government working together could tackle those issues and be a force for good.

Nyembezi is JSE chairperson

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February 17 2019