Magatte Wade is right, Africa must create wealth to break free

At an international conference on development cooperation hosted in Nairobi earlier this week, Senegalese-born entrepreneur Magatte Wade did not come to play.

Born in Senegal, educated in Germany and now blossoming in the US, Magatte opted to serve it raw rather than placate participants at the conference, “Transforming international development cooperation: markets, interests and partnerships in a changing global order'.

It’s harder to do business in almost anywhere in sub-Saharan Africa than it is in anywhere in Scandinavia, she told development practitioners, policymakers and business leaders brought together by the Friedrich Naumann Foundation to re-imagine effective development cooperation.

“This is the most overregulated place in the world. It has the least economic freedom,” she thundered.

To start and succeed in business on the continent, one is assailed at all fronts by bureaucracy, unfair competition, tax and extortion. They must surmount all this while elsewhere, their counterparts skip these.

For 60 plus years now, Africa applied the wrong dose upon her illness. She subscribed to the mis-philosophy of aid to alleviate poverty when all she ever needed was to dream, build prosperity and wealth.

“Poverty is solved by prosperity, not poverty alleviation. Prosperity is built by entrepreneurs. Free the entrepreneurs. Stay close to the entrepreneur, pay closer attention to what they are saying or not saying,” she pleaded.

Magatte is right, by a lot. While the global balance of power is shifting largely in favour of Africa, the continent is not seizing the opportunities with appropriate measures of investments.

While Europe, East Asia and the Americas face an economic and demographic winter—characterised by shrinking workforces, ageing populations and overburdened pension systems—the African continent boasts the youngest, fastest-growing, tech-savvy population on the planet.

The demographic windfall provides a historic window of opportunity. Yet, numbers alone do not guarantee a renaissance. If we are to reclaim our lost fortunes and lead the world, African nations must cast away outdated, state-reliant economic models and embrace aggressive, market-based growth.

In this time and age, Africa cannot continue to train her young population for jobs that no longer exist, while suffocating the very local enterprises capable of creating actual wealth.

To break free from this cycle, we must confront our internal realities with absolute candour. We must acknowledge that the historical injustices of colonialism and slavery left deep, systemic scars on the socioeconomic landscape.

The extraction of Africa’s resources and the fragmentation of our borders were historic wrongs.

However, in an era where every global trend points toward Africa’s ultimate success, history can no longer be used as an excuse for continued underdevelopment. Africa cannot build tomorrow's prosperity on yesterday's grievances.

True liberation requires us to stop blaming external forces and take absolute, unapologetic ownership of our destiny by unleashing the power of the free market, dismantling barriers to enterprise and fostering grassroots capitalism across all 54 nations.

If Africa is to lead, her government must shift from acting as economic gatekeepers to becoming market enablers through a series of structural overhauls.

We must be ready to dismantle the regulatory barriers inhibiting growth. Over-regulation, redundant licensing and predatory tax regimes kill innovation in the cradle.

They choke free enterprise, stymie growth and refoul innovation.

The ultimate economic independence lies in our informal sectors, our local artisans and our tech startups. We must build robust, localised financial markets that provide these micro-entrepreneurs with affordable credit, venture capital and clear property rights.

Competitive market forces must be allowed to drive efficiency in critical sectors such as agriculture, energy and logistics. Intra-Africa trade barriers must be crushed with unmistakable resolve. 

Leadership remains our ultimate missing link. For too long, political rhetoric across Africa has centred on how to distribute a shrinking national pie rather than how to bake a larger one.

We need a new breed of leaders who can prime their populations for growth. These new leaders must, of necessity, understand that wealth creation happens on factory floors, in tech incubation hubs and on commercial farms—not in government boardrooms.

This requires an unyielding commitment to the rule of law, the strict enforcement of contracts and the eradication of corruption, which acts as a direct tax on enterprise.