JOHANNESBURG (miningweekly.com) – Africa’s economic lions must be allowed to roar by “urgently” improving the continent’s competitiveness, De Beers chairperson Nicky Oppenheimer said in Addis Ababa.

Addressing Africa Day celebrations in the plenary hall of the African Union, the head of the world’s and Africa’s biggest diamond-mining company said that acceptance of the philosophy of economic competitiveness was key to the continent’s provision of jobs, security, trade and the economic growth that Africans craved.

Competitiveness was Africa’s opportunity that must seized “with both hands”, and only if Africans worked together would they be able to prosper economically.

“Over the next 12 months we’ll face many difficult challenges, and tough policy choices will have to be made, but these can be met if we act in partnership – and also by accelerating our ongoing reform efforts aimed at greater competitiveness and economic diversity,” Oppenheimer said.

“We must never forget that Africa is populated by lions that operate as a pride,” said Oppenheimer, whose De Beers helped to create economic wealth through diamonds in Botswana.

The continent needed to build coalitions for growth – “remember the lions” – to be able to take advantage of the long-term trends driving capital to developing markets.

The global economic meltdown had afforded Africa an opportunity to create an African way of doing business, grounded in fairness, integrity and sustainable development – “rather than the greed and recklessness, which has got so many of us into an economic mess”.

Strong and principled leadership – of the Nelson Mandela kind – was needed to drive Africa’s renewal. The election of US President Barack Obama presented “a genuinely historic opportunity – a chance to break with a troubled past, as Mandela did in my own country”.

Competitiveness, as the US auto industry had learnt to its cost, was the life-blood of economic growth, which was the linchpin of social harmony and political stability.

By improving competitiveness and deepening its integration with global markets, Africa could simultaneously reduce its economic vulnerability and increase growth.

African competitiveness had received too little attention, he said, quoting Rawandan President Paul Kagame as saying that it was competitive enterprises that were the real source of wealth; Mozambique’s President Armando Guebuza as arguing that the current global economic crisis was a louder call for Africa to improve its competitiveness; and Liberia’s President Ellen Johnson-Sirleaf as reiterating that competitiveness was essential for Africa’s economic renewal.

Oppenheimer urged that goals associated with the promotion of competitiveness should be accelerated.

“True competitiveness requires political and macroeconomic stability, and social and environmental stability. It relates to what countries can do together, including improving trade logistics and deepening integration. With growth and competitiveness as a national and continental priority, resources can be mobilised, appropriate policies written, and novel solutions brought to bear. This is our opportunity. We must seize it with both hands,” Oppenheimer urged.

Oppenheimer cited five lessons that needed to be learned from the world’s worst economic crisis since the Great Depression.

• The first lesson was to continue to embrace globalisation, despite the global meltdown, and to continue to reduce protectionism. He urged Africa to assume a constructive role in global negotiations at multilateral forums, such as the G20 – “and it means having more to say apart from requesting more aid”.

• The second was no longer to assume a commodity supercycle.

• The third was to use commodity inflows effectively, to ensure that the future was about more than just commodities.

• The fourth was to for the banking system to build a reputation for fair returns rather than excess and profligacy.

• The fifth, and most important, was to strengthen and improve African competitiveness “urgently”.


Oppenheimer said that Botswana remained a remarkable example of how to invest a commodity windfall wisely.

On restoring trust in the banking system, he added: “Without reliable banks and efficient credit markets, Africa, like other developing regions, will remain poverty stricken, at the mercy of the costly finance provided by weak institutions and narrow networks, and heavily dependent on unrefined commodity exports.”

For business, corporate good governance and social investment had to become an operating dictum founded in self-interest. “Ethical capitalism requires reasonable returns, not rapacious behaviour.”

In the short-term, governments would have to manage the economic and political fall-out of lower revenues from natural resources, trade and tax, as well as smaller aid transfers.

Most African leaders would have less scope than Western nations to buttress domestic demand through stimulus spending programmes, given the rudimentary nature of their capital markets.

African nations would also have to resist the temptation of playing politics and rolling back reforms in the face of temporary domestic pressures.

Several would nevertheless have to increase money supply, which could lead to increases in domestic inflation and falls in currency valuations.

“It’s vital that we avoid learning the wrong lessons from the current crisis. We cannot discard the market-related reforms, which have acted as key drivers of growth for successful developing nations around the world.
Good governance, open markets, and strong institutions all remain intrinsically important to Africa’s development,” Oppenheimer said.

Over the longer-term, Africa needed to renew efforts to build consensus on the necessity of economic reform, the importance of high growth rates to reduce poverty, and the integration of African nations into the global economy.