How to create jobs in Africa
Despite recent economic success, Africa needs a free-market makeover to create jobs for its high youth population. Zambia embodies the challenge – and opportunity – to create jobs by making it easier for businesses to operate and grow.
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In Zambia, big business became a target of nationalization in the late 1960s, a costly disaster only remedied by the privatization of the 1990s. Neighboring Zimbabwe has taken the more extreme and recent action of outright seizures in the private sector, cloaked in the nationalist term, “indigenisation.” Despite its obviously calamitous economic costs, this route offers a tempting policy for many African governments, not least Mr. Scott’s.Skip to next paragraph
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The border between Zambia and Botswana at the Kazungula ferry across the Zambezi River offers a striking contrast. It shows why Botswana has made dramatic progress since independence – Zambia, only halting forward movement. Botswana started off dirt poor when it gained independence in 1966. It possessed 10 kilometers of tarmac road and had a per capita income of just $70. With fewer than 50 university graduates, literacy was low, and there was scant access to health, sanitation, water, telephone, electricity, public transportation, and other services.
Today its per capita income, at about $14,000, is more than neighboring South Africa’s. Despite its dependence on a single commodity in diamonds, it has ensured both long-term investment and stability through a joint venture with the industry giant De Beers – and much better governance than the continental norm. Botswana is consistently ranked among the safest investment credit-risks on the continent.
At the ferry crossing, the Botswana side – in contrast to Zambia – offers a concrete slipway, neatly tarred road and, the bubble-gum blowing revenue official aside, a courteous, professional staff managing a clear process involving a single road tax payment.
Unlike Zambia and Zimbabwe, where police road-blocks abound as sources of informal “taxation,” Botswana’s are limited to functional checks to curb foot-and-mouth disease.
In Africa’s continuing liberation from the old ways of running the economy, governments embracing the market and making things easier for business will be the next critical step toward creating the jobs the continent so urgently requires.
Jeffrey Herbst is president of Colgate University in Hamilton, NY. Greg Mills directs the Johannesburg-based Brenthurst Foundation. They are authors of the recently launched “Africa’s Third Liberation: The New Search for Prosperity and Jobs."