msafiri’s business columnist Nkem Ifejika has just returned from Mauritius, where he discovered the secret of the country’s success – and it’s not down to an abundance of natural resources
Mauritius is a rather special country. It has one of the highest GDPs per capita in Africa. It has one of the highest GDPs per capita in Africa. It does well in rankings for ease of doing business, its economy is diversified, it has a decent infrastructure, literacy rates are high and unemployment is low. Crucially, Mauritius also doesn’t have any natural resources in sufficient quantities to exploit. All it has really ever grown is sugar cane. So how did this tiny island off the southeastern coast of the African continent achieve all it has since independence from the British in 1965?
On a recent trip I spoke to business leaders and others about what had brought about their success. The refrain was the same: for a country that didn’t really have anything natural to tap, developing human capital was their best hope for advancement. Previous administrations had had the foresight to end the country’s reliance on sugar cane, and to rein in people’s fertility to avoid an overcrowded island. But the key driver of growth has been having an educated population.
It feels obvious to talk about investing in people, rather than natural resources. But I’ve seen and heard enough to know that spending on people isn’t always a government’s first priority. How many times have you heard African leaders, when asked what they have going for their country, start to reel off a list – oil, gas, iron ore, bauxite, diamonds, gold, etc? Rare is the president or prime minister who mentions the people as the country’s greatest asset.
The cruel joke is that exploiting many of those natural resources provides no direct gain for the people. Oil and gas are largely automated and don’t create as many jobs as the outsized reverence in which the industry is held would suggest. Even mining is also moving towards automation. So money ends up in government coffers via company taxes.
Business leaders in Africa face many challenges, such as poor infrastructure, often unclear regulation, fluctuating currencies, political instability and many others. However these issues tend not to be the most pressing. Over time they’ve learned to cope, to adapt or die. The political mantras for coping were mostly birthed in the dark days of military dictatorships. Some companies are constantly shifting money around to combat currency fluctuations, or they just deal in more stable forex.
Yes, whenever I speak to business leaders in Africa, they’ll complain about poor roads, or lack or electricity and sundry similar problems. But what they most worry about is the quality of the staff they recruit. The complaints include incompetence, lack of trust, and the inability to take initiative. Which is why the Mauritius story is so instructive. It’s not the natural resources, or the infrastructure, or the regulation, or the political climate. It’s the people, stupid.