For the past few months I have been thinking a lot about what we need to do for Malawi's to go on a growth trajectory that will see its population moving out of poverty. There are many prescriptions that have been given or proposed to developing countries on what they should do to tackle poverty and most of them are based on the experiences of developed countries. Perhaps the most dominant of these is for developing countries to transform their economies from relying on agriculture and move on to the manufacturing sector which is seen to have the properties or characteristics to act as a spring board for rapid economic growth and further structural transformation of the economy.
The interesting thing, however, is that it seems like most developing countries in particular those in Africa seem to be taking a different route. Yes there is some structural transformation of the economy, but this is taking the form of moving from agriculture to services, by passing manufacturing. As a result, you find aid agencies saying that this growth will not be sustained over time yet you find the growth has persisted for over a decade now, such that there is talk of Africa rising.
This makes me think that perhaps the path to growth for Africa, and Malawi, is different from the path that was taken by Europe and East Asia. This is backed by not just the trend I've mentioned above but also existing global realities. For example, given the dominance of China in the manufacturing sector, it is difficult for new entrants into the global market to make significant headway. Furthermore, we cannot make use of the same export promoting policies that Europe, USA and East Asia used because of the constraints given by the World Trade Organisation.
But it is not all negative, a look at the innovations taking place on the continent show you that we are already in some ways taking a new route to addressing our challenges. In fact, the economic histories of developed countries reveals that it is technoloogical innovations that were behind their growth experiences. The industrial revolution was mainly about making improvements in production and distribution of goods at lower costs and with accompanying increases in capacity. What we need is something along the same lines but not necessarily in the manufacturing sector.
And already there are signs that this is what is happening, just today I was reading of M-Shwari, a Kenyan innovation that will have a significant impact in the area of access to financial services. This is an upgrade in a sense of the mobile banking innovation M-Pesa that radically transformed how money was transferred and gave huge parts of Kenya's population easy access to money. The M-Shwari innovation will mean increased access to financial services such as savings and small loans at a cost that is much lower than the policy prescriptions we are getting from International Finance Institutions and aid agencies. In essence, it provides a shortcut to the same destination that these prescriptions are aiming for.
All this to say that, as Africa we need to realise that the path to development is diverse, there are many paths that will lead to the destination of sustained growth and significant reductions in poverty. For us to embark on that path, we need to look at our own situation, what are the challenges and opportunities that exist and what innovative ways can we come up with to address the challenges and take advantage of the opportunities. This will mean undertaking our own research that does not rely too much on existing theories of development. We can also learn from each other, rather than looking east or west, maybe we need to look within the continent and pick out those that are doing well and learn from them. After all, those lessons from other African countries will be easier to take up given that our histories and cultures are generally similar at least compared to those of East Asia and Europe for example.
It is time we took charge of our own destinies and embarked on our own development path.
