Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has advocated the need for Africa to develop own strategy to stimulate growth of economies in the continent.

Sanusi stated this in a paper titled: “Neither the Washington nor Beijing Consensus: Developmental Models to fit African Realities and Cultures,” presented at the Eirenicon Africa Public Lecture Series (EAPLS) held at The Royal School of Medicine, London. A copy of the speech delivered on March 27, 2012, was posted on the apex bank’s website Tuesday.

Sanusi, insisted that Africa, with its huge natural resources, regional market size and human resources ought not to be a marginal player in the global economy. 

According to the regulator, neither the Washington Consensus nor the Beijing Consensus could bring about the desired change in the continent.
“The implications of the structure of African economies need to be critically appraised in order to identify an appropriate African Consensus - for its development model.

“In this regard, a development strategy for the continent would include a framework that embrace competitive regional and international trade, development of critical infrastructural, harnessing of the potential of the huge natural resource endowment, including abundant labour force and large domestic market,” the central bank chief said.

The CBN governor also argued that trade liberalisation that was recommended by the Washington Consensus further compounded Africa’s problems, saying that African countries had been unable to develop efficient and low-cost industries that could compete favourably in the global market.
He added: “Thus, while many countries outside Africa have been able to liberalise foreign trade to increase their share of global trade, Africa had witnessed declining terms of trade with adverse effects on export revenue and real exchange rate.

“Although, the Washington Consensus could be said to have improved macroeconomic stability in Sub-Sahara Africa (SSA), it had not facilitated the solution to development in Africa and developing countries in general.

“This observation was supported by Woo (2004), who elucidated that although Indonesia, Korea and Thailand implemented the Washington Consensus type of policies to counter the Asian financial crisis, they suffered deeper output losses for a longer period than Malaysia, which adopted capital controls instead.”

The continent’s economic growth, according to him, had been grossly inhibited by a global trade system inimical to the full exploitation of its comparative advantage. Furthermore, he pointed out that a limited market access for low-cost textiles, cotton, and agricultural products and competition from heavily subsidised exports from industrialised economies had also prevented growth in Africa.

“Thus, unable to produce capital intensive goods, African countries have been reduced to net importers of finished products. Hence, for African economies to achieve their growth potentials, they should be able to utilise their export earnings to broaden their production base and productivity,” he said.