The 2012 PISA* report has just been released by the OECD, a think tank of industrialized countries. This tri-annual study evaluates the competencies of youngsters at the end of their compulsory education (aged 15 to 16) in mathematics, reading and sciences. The last survey tested 510 000 students from 65 countries, 31 of which are non OECD members.  PISA provides, among other things, a measurement of a country’s education system and makes it possible to compare it in time, with its own past performance, and space, with that of similar countries. It is an essential element in the toolkit of decision makers allowing them to run, in a pragmatic and transparent way, the evolution of the educational system in terms of performance, resources consumption and fairness from both a social or gender perspectives.  

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The Franc Zone (FZ) brings together France and 14 sub-Sahara African countries in a common monetary area. This institutional device (fixed exchange rate CFA Franc/ Euro, pooling of foreign exchange reserves and guaranteed convertibility between the two currencies) defines the backbone of a singular economic, legal and cultural space. The FZ was designed to enhance the macro-economic stability of its African members and promote economic growth, through low inflation rates and an attractive regime for foreign direct investment. Forty years on, has the Franc Zone met these expectations?  

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Driving through any city in sub-Sahara Africa provides immediate evidence of the pervasiveness of the informal economy (IE). From the ubiquitous street vendor to the domestic worker, from the large business under-reporting its employees to the craftsman working alone or with a handful of aides, the IE spans a broad array of situations. On average the IE accounts for 40% of the GDP and 60% of the non farm labor in Black Africa*.  

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Can today’s Africa produce manufactured goods for exports? Can the continent become tomorrow one of the world’s manufacturing hubs and then move on to secure a position as an industrial powerhouse in its own right?

Sawa Shoes started answering these questions since the company opened for business in 2009.The founding idea was to build a brand of fashion sportswear shoes, 100% “made in Africa”, which would be sold in the developed world while retaining value creation on the continent. Hence, the shoes are designed and produced by a workforce of 100 people in Cameroon, West Africa, using raw materials sourced locally as well as from other African countries. The company has experienced rapid growth and its shoes are now available at trendy stores in London, Berlin, Paris, Barcelona, New York, San Francisco, Hong Kong and Tokyo.

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From 2001 to 2007, year of the outbreak of the global financial crisis, the Greek economy grew by 4.3% on annual average, more than 1% above the Eurozone average growth rate. However, this growth, led by private consumption and infrastructure projects largely funded by the European Union, proved unsustainable over time.

Essentially, from 2001 to 2010, Greece compounded a budget deficit of 9% of GDP p.a. with a current account deficit of the same magnitude*. Shielded by its Euro membership, the country initially found it easy to finance these twin deficits by borrowing on the international capital markets. Unfortunately, the 2008 recession drove lenders to reassess the credit risk of a country combining fundamental structural weaknesses (poor productivity and macro-economic management in a fixed exchange rate regime) with a massive debt burden of 160% of GDP.

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The consistent increase of GDP per capita that occurred over the last decade in Africa paved the way for the rise of local companies now at various stages of the globalization process.

The Boston Consulting group – a strategy consulting firm – recently drew up a list of 40 African companies it dubbed the “Challengers”. While hailing from diverse industries or countries, these national or regional champions share a lot of common characteristics. Often active in the mining or financial industry, they harness Africa’s comparative advantages to generate both high growth rates and strong profitability.

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I recently took part in a debate on a radio station. The discussion focused on the economic vision driving the African business class into the next decades. On the panel were the well known CEO of a large West African group of companies, a successful telecommunication entrepreneur and the founder of a business services company with a continent wide footprint.  

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Productivity and its evolution over time are the main drivers of a country’s economic growth, its international competitiveness, the profitability of its businesses and the standard of living of its citizens. It is therefore a fundamental indicator useful to governments and companies alike.

A high productivity reflects the ability to produce more with the same resources or to produce the same amount with less input. Africa struggling with a severe case of scarcity of resources, it would seem logical that increasing productivity be a top priority there.

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The need to improve access to credit for small and medium size enterprises’ access in order to boost economic growth has now become a well received mantra, popular with International Financial Institutions and African politicians alike.

To be sure, the object of this consensus remains hazy, its outlines ill-defined and useful data hard to find. For example, the statistics provided by banking authorities in both West and Central francophone Africa do not segregate SME’s borrowings from other types of borrowings. Arguably, it’s difficult to understand, let alone manage, something that is not being measured.

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The tide of social unrest that swept a number of African countries during 2007-2008 to protest against rising food prices has now ebbed. In its wake, the absurdity of agricultural policies that called for the urban populations in Africa to rely for their food on cheap imports from other continents’ agricultural surpluses is now plain for all to see. Clearly, the low price of imports - kept artificially so by hundreds of billions of subsidies to farmers of exporting countries- has been a major obstacle to the growth of a diversified and commercially viable agriculture in Africa.  

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