One of the more pertinent questions asked at the African Development Bank (AfDB) 2018 annual meetings was whether African states could strategically and successfully implement plans for the continent’s fourth industrial revolution.
The question, and it needed to be asked, was how do African countries talk about accelerating the fourth industrial revolution when they have not completed the first, second or third revolutions.
The question was asked again by Sung Soo Eun, Chairman and President of the Korea EXIM Bank.
Sung said South Korea has gone through the first three industrial revolutions and this is why the country was ready for a fourth industrial revolution.
Sung spoke at the “Pathways to Industrialisation” session that took place at the AfDB 2018 annual meetings in Busan, South Korea.
The question sparked major debate as analysts and social media commentators asked if there was indeed the “right way to industrialise”.
The theme for this year’s meetings was Accelerating Africa’s Fourth Industrial Revolution and it was no coincidence the meetings were held in South Korea.
Everyone agreed that the industrialisation of South Korea was a good example for the world but wondered if its model could be applied to African countries.
In just one generation, South Korea managed to move from a largely rural economy with high levels of poverty and inequality to what it is today, a first-world country with a Gross Domestic Product (GDP) per capita of $39 276 (PPP. IMF 2017 est). This economic miracle in known as the Miracle of Han River, the period of rapid growth following the Korean War (1950 – 1953).
The former president of Ghana, John Dramadi Mahama, said: “There has been three industrial revolutions [in the world]. Africa has missed a lot.” And he asked the pertinent question, “How is Africa going to take advantage of the fourth industrial revolution to improve the lives of its citizens?”
AfDB President Akinwumi Adesina called the history of South Korean development “amazing”. This statement was made in one of his interviews during the 2018 annual meetings.
“This [Korea] is a country that is smaller than Liberia, smaller than Benin, smaller than Mali, in fact one third of the size of a country like Algeria.
“When they started out, they started with heavy industries; then they went to light manufacturing; then they moved up into more high-tech, value-added industries we see today. You have the Samsungs of the world, the LG, Hyundai. The question is, what did they do and how did they do it,” said Adesina.
What Adesina does not mention in the interview is that the AfDB, in partnership with African government agencies and South Korea, are already in the process of implementing this accelerated industrialisation in Africa – all four stages of industrialisation at the same time.
How they made it work: A history lesson
South Korea’s heavy industrialisation caused major inequalities in the 1960s which led to country-wide riots. Professor Do Hyun Han of the Academy of Korean Studies writes that there was absolute rural poverty in the 1960s in South Korea as the income gap between urban and rural areas increased.
Most rural areas suffered from seasonal starvation every year. During the long winter season, farmers did not have work, so most farmers spent their time drinking and gambling, writes Do.
This aggravated rural poverty during the winter season.
Because of severe rural poverty, there was a great deal of rural migration to cities, which resulted in serious over-urbanization. Slums were quickly formed within major cities.
“One urban riot in 1971 was clear evidence of the acute urban problems in Korea which resulted from the rural-urban mass migration,” writes Do.
He adds that unsatisfied farmers who were excluded from the benefits of industrialization became a potential social problem.
“These factors pressured the government to come up with a broad-based and inclusive growth policy. The South Korean government launched its Saemaul Undong model in the rural areas while heavy industrialisation took place in urban areas.”
The AfDB follows the same process of development across different countries on the continent. Adesina says heavy investment in science & technology, innovation, robotics, biotechnology and nanotechnology should be part of African economies’ industrialisation strategy.
At the same time African countries are rich in natural resources.
“We have lots of oil; we have gas; we have minerals; we have arable land; we have all this raw material. We need beneficiation and value-addition.
“We have to manage the resources well. This is why the bank has launched its own industrial strategy called, Industrialise Africa. It is one of our High Five priorities. We want to support countries to have very good industrial policies and to help them invest more in infrastructure to enable industrial clusters and special industrial zones.
“We are also supporting the development of capital markets. We want to invest $35 billion dollars over the next 10 years, $3.5bil every year. We want the continent to raise its industrial GDP from where it currently stands, at around $700 billion, to $1.7-trillion by 2030,” said Adesina.
Even though these projects are great and could very well lead African economies into the fourth industrial revolution, they have a way of increasing extreme inequalities which lead to poverty, formal economy exclusion and an unskilled labour force. Industrialisation, without inclusivity, does not work.
If African countries and the AfDB only focused on big industrial projects, the majority of African citizens will be left behind.
This is why the knowledge transfer taking place between African states, the AfDB and South Korea is critical.
Some African countries are already ensuring rural development takes place at the same time as major industrial projects.
This is why the AfDB, Korea-Africa Economic Cooperation Trust Fund (Koafec) and African government agencies are working together to implement the Saemaul Undong Model across villages in different African countries.
The words Saemaul Udong, translated into English, mean the New Community Movement or the New Village Movement.
This model focuses on local community development with ethos of diligence, self-help and cooperation at the centre.
When this model was implemented in South Korea in the 1970s, it achieved equitable distribution of income, improvement of the environment and agricultural infrastructure.
The first project was successfully implemented in Ethiopia in Turi Goda Village, the Becho District in Oromia Region.
The results were tangible: a youth centre and a school library; a four-kilometre long road to facilitate transport for people and products; ten domestic water supply wells which had a positive effect on health and gender; solar power to 300 domestic households; domestic farm animals for produce and village credit.
The N’gbekro village and Zatta village of Yamoussoukro, Cote d’Ivoire
The drive to N’gbekro village and Zatta village in Yamossoukro, Cote d’Ivoire was simple. The road was good and there were no police “stop and gos” on the way.
At the corner of one village was a community centre painted in yellow with the words: “Diligence, Auto-Assistance, Cooperation” on the side.
These words were the village’s motto for collaborative work and engagement.
Both villages are under a chief, and the Saemaul Undong model understands the importance of getting the go-ahead of the chief for the project to be a success.
The advisor to the chief said the difference with this model is that it was not the usual top-down approach forced by governments and international organisations onto communities but rather, a collaborative and horizontal approach was followed where the villagers were asked what they wanted.
The villagers wanted: a community centre where they could have meetings; a primary school and a child-care centre; teachers’ housing; a medical centre; cassava farm, tomato farm and a poultry and pork farm. In the N’gbekro village, the villagers also asked for a youth centre with an office where the the operations of the village’s micro finance would run.
The Agence Nationale d’Appui au Developpement Rural (Anader) was the Cote d’Ivoire government agency that worked closely with these villages and made sure the necessary training took place. And as a result, Anader, Koafec and the AfDB have transformed economies of the two villages – impacting 2,961 inhabitants.
One of those inhabitants is Zounon Sylvie who received $500 (US) loan from the Saemaul Undong through AfDB and technical support from Anader.
In her first year, she made a 70% profit.
“I am a single mother of four. Thanks to this project and the loan, I got 70% of the profit in my first year. My farm business has helped me to take my children to school.
My eldest is currently in university. And I alone, am able to pay for this,” she said.
She has since been able to expand her vegetable farm and has partnered with a another young farmer, Kowadio Kan. She said it was the only way the local chief would allow them to get more land.
“Land is a big issue in Africa. Collaboration has made this possible. It has also facilitated a lot of work and significantly increased our market,” said Sylvie.
They have expanded from growing only tomatoes and now include aubergines. The two of them have employed five full-time farm labourers. They need $5 000.00 to expand their capacity and grow.
In an interview with Dr. Miaman Kone, head of the Saemaul Undong projects and Economist at Anader, he said the major factor for the success of these projects was the fact that the villagers selected their priorities and were actively involved in its implementation.
“They have complete ownership of the project and as such, are invested in its sustainability,” said Kone.
“The key lesson learned is that the change of mentality of actors based on the Saemaul Undong philosophy of diligence, self-help and collaboration is permanently engraved in the villagers’ approach to improve the quality of their living standards,” said Kone.
He said continuous training was necessary to ensure the maintenance of constructed facilities and infrastructure such as, buildings, road, irrigation dams.
What is also important to realise is that, through collaboration with community members, mutual interest and the want so sustain the community, most farmers have moved from subsistence farming to agro-preneurs. They have created their own markets and networks out of their own villages into the greater Cote d’Ivoire.
The challenges that remain are the safe transportation of goods and proper logistics to ensure the goods arrive at markets on time.
But the project works.
This was further cemented by the AfDB president who superimposed the importance of big projects, while at the same time ensuring development takes place in rural areas.
Adesina explained why the change in mindset was critical.
“While major projects are taking place in bigger industrial areas, smaller ones in villages are also taking place. The mindset matters. When you are tired of being poor, and you decide to not be poor… that’s where is starts,” said Adesina.
From rural villages to aerodynamics
While basic agriculture takes shape in villages of Yamoussoukro; the Turi Goda village of Ethiopia and the Kibueya village in the Democratic Republic of Congo, other projects, that show Africa is indeed ready to accelerate its fourth industrial revolution, are taking place across the continent.
The article will focus on Liberia, Kenya and Morocco.
Lorna Rutto, a Kenyan young banker, presented on the “Bridging Innovation Industries: African Youth Solving Continental Challenges” session at the 2018 annual meetings.
Rutto quit her job to co-found EcoPost. She said her social enterprise was created in response to the need, that was prevalent in Kenya, to find alternative waste management solutions to the country’s huge plastic waste problem.
In 2009 she founded her company, which collects plastic waste and manufactures commercially viable, highly durable, and environmentally friendly fencing posts, used widely across Kenya.
Since then, the social enterprise has created thousands of sustainable jobs for people in marginalized communities, in addition to conserving the environment.
“Trees were being cut down and plastic waste was all over the place. It was very scary for me to resign a good bank job, but I had to fulfill my calling as an entrepreneur. That was when I developed the idea that waste was a resource and not a thing to throw away,” said Rutto.
Another entrepreneur, full within the fourth industrial revolution, is Moroccan tech entrepreneur Badr Idrissi. He co-founded ATLAN Space, a start-up that uses artificial intelligence and drone technology to fight illegal fishing.
Environmental and ecological threats such as illegal fishing, poaching and deforestation faced by many African countries are what inspired Idrissi to establish his software start-up. He said these issues lead to a large percentage of fishing activities, especially those off the West African coast, resulting in huge economic losses. These countries do not have the capacity to have satellite surveillance on the sea for each square-kilometre.
“The Overseas Development Institute shows that even though illegal fishing is a worldwide phenomenon, it is much more dramatic for African countries.
For West African countries, illegal fishing costs governments US$1.4bn every year and destroys 300,000 jobs, ” said Idrissi.
Another presenter was Abigail Urey, CEO and co-owner of Edgail, a scrap metal exporter. They manufacture and export recycled waste oil, initially to customers in China. Their factory is located 60 km inland off the Kakata Highway, one of just a few critical but badly broken roads connecting inland Liberia to the port.
This is the challenge.
Urey said: “With the new business we won’t get second chances with our customers, so every improvement helps [referring to the infrastructure gap]. We will depend on the shipping lines and the port to perform as expected, so we don’t break our promises.”
“Closing infrastructure gap” has been identified by AfDB Predisent Adesina as the most critical issue for the successful industrialisation of African states.
“How do we industrialise when we have no power? When we have no logistics. There is nothing more important than closing the infrastructure gap. We have created an equity vehicle called Africa 50. This vehicle was created by the AfDB and I am the chairperson. So far we have mobilised $853 million dollars and want to grow it to $3 billion,” said Adesina.
He said African governments needed a new way of thinking and emphasised the importance of long-term planning as well as having clear industrial policies.
Adesina added: “Africa cannot industrialise when we don’t have the right productive capacity and human capital – the skills necessary for industrialisation.
We live in a world where artificial intelligence is going to rule. Bio-technology, robotics, nano technology, quantum physics and mechanics, these are the things that will dominate the world. I want us to start investing in young people,” he said.
Adesina said it was possible: “Samsung in the past, in the 1960s were exporting human hair. The Korean women cut off their hair and gave it away to be exported. They started with exporting human hair, today they dominate the digital economy, why can’t African countries do that?”
Currently on the continent, small and massive projects are underway.
The President of the AfDB bank believes that African countries can go through all four industrial revolutions at the same time.
Photo credit: Thuletho Zwane (RSA), Andualem Sisay Gessesse (Ethiopia), Ulrich Janse van Vuuren (RSA)