Kalu proposes ‘near-shoring’ to boost Africa’s economic growth

Nigeria’s Deputy Speaker of the House of Representatives, Hon. Benjamin Kalu, on Tuesday proposed the concept of ‘near-shoring’ as a solution to boost Africa’s economic growth and reduce migration.

Speaking during an online roundtable titled: EU-African Relations: An African Perspective in Brussels, Belgium, Hon. Kalu said it would be mutually beneficial for Europe and Africa to partner with each other.

According to him, ‘near-shoring’ involves taking technology and industrialisation closer to raw materials in Africa, thereby creating value-added products and jobs for African youths.

The Deputy Speaker’s call for investment in Africa comes as the continent seeks to harness the potential of the African Continental Free Trade Area (AfCFTA) to promote intra-African trade and economic growth.

It will be recalled that the Deputy Speaker, who chairs the Monetary and Financial Affairs Committee of the Pan-African Parliament (PAP), is leading the delegation of the African parliamentary body to the European Union (EU) Parliament in Belgium.

He emphasised that while the raw materials are domiciled in Africa, European technology and expertise, through the new partnership, would be used to process them, thereby creating value-added products and employment opportunities for African youths.

The approach, the Deputy Speaker said, would not only reduce migration but also promote economic growth and development in Africa, noting that African youths are seeking opportunities.

Hon. Kalu highlighted the demographic advantage of Africa, stressing that the continent is projected to have 42% of the world’s youth population in the next five years.

Citing examples of how near-shoring could work, the Deputy Speaker said Africa could become a manufacturer of batteries and chocolate, rather than exporting raw materials to be processed and shipped back to Africa at higher value for the European continent.

He said: “Let me go to some of the issues you raised about the youths, about the challenges and what the future holds for Africa. The truth is that I am happy that Europe now knows we are your neighbours, and that what affects our continent affects your continent, and that you have not leveraged the strength of Africa over the years. And what are those strengths?

“It is projected through statistics that in the next five years, Africa will have 42% of the youths globally resident in Africa. What are you doing with that? Europe does not have that and cannot boast of that. What are we doing with that manpower? It is also a known fact that the European continent has an abundance of technology and funds, while Africa does not. But what we have that you don’t have is natural and mineral resources.

“The question becomes, in this partnership, are we leveraging our strengths? What we should do to address the challenges that we have encountered over the years—one of them being migration—is adopt the strategy known as near-shoring. Near-shoring is where you take technology and industrialisation closer to raw materials.

“What African youths are looking for—they are running for opportunity. African youths are looking for opportunity, and these opportunities are found in Europe. That is why they are coming there. And the question is: is there any way to reverse that? What mechanism can we use to reverse that?

“The mechanism we can use is to take the technology and industrialisation closer to raw materials, create those opportunities around Africa, keep them in Africa, and have a win-win situation. So, what it means is that little mines in Africa will no longer be known for little mining only, but Africa will now be known as a manufacturer of batteries.

“Now, cocoa farms in Africa will no longer be known for just being cocoa farms, but they will be known as producers of chocolate. So, the whole nine yards of the production there in Africa will keep Africans within Africa. Then, you have a single market system here in Europe; we are now to set up the African Continental Free Trade Area (AfCFTA).

“All we need is the capacity building and support to make sure that we succeed. And if we do succeed in having a single market where Africa will trade more within Africa and Europe supports our manufacturing system, it will be a win-win for Europe and Africa.

“The solution lies in finding the causative factors that lead to people migrating. And the solution is in Africa. It’s not in Europe. Our primary raw materials are exported as primary products, not as secondary products. There is no value addition to our products.”

“Just consider the whole nine yards of adding value to a single product that leaves the shores of Africa, and the amount of jobs it will create. It’s massive. As a good neighbour, a continental neighbour, it’s about time you begin to love your neighbour as you love yourself. If you can build the factories here without having raw materials, think of building the factory there where the raw materials are, because it will solve both economic problems for you and also population-wise.

“So, to solve the migration problem, it is not in any other policy that is outside industrialisation of the source of the raw materials, and we are willing to partner. Africa is willing to partner for a win-win relationship, and I’m happy you are passionate about it.

“The rule of proximity, the rule of near-shoring, should be the game. Bring the technology close to raw materials. Leverage the raw materials. Leverage our youthful population, which you don’t have in Europe. If you can do that, it will be a game changer for Europe. It will be a game changer for Africa. Africa is willing to have this hand of partnership with Europe. But how willing is Europe? So, that is what will cure the migration problem.”

The Deputy Speaker also emphasised the need for Africa to own its security system, with support from European technology and expertise.

He noted that past attempts to implement security solutions through external forces have failed, and that Africa needs to take charge of its own security.

“Now, when you talk about security, the security of Africa can only be handled through a locally owned system. You tried it between 2015 to 2020 when you tried to intervene through implementation by implementing through external forces.

“It didn’t work. Africa needs to own their own security system and the way you can support Africa to be able to do that is to ensure that those technologies that will help us to enhance the security systems are available to us: the surveillance cameras, the aircraft. With that, we will be able to own and have confidence in our system to be able to protect our citizens,” he said.

Hon. Kalu also called for a fairer credit rating system that reflects the realities in the African economic climate, stressing that both continents must leverage their comparative advantage to advance their mutual business interests.

“The EU must strengthen its use of blended finance and credit guarantees through its export credit agencies. Nigeria is ready to meet Europe halfway. We have established our own credit enhancement instrument, including the newly created National Credit Guarantee Company to share risk and unlock investment.

“The fairer credit rating is another issue. The global financial architecture must be reformed. The EU should provide robust technical support to the AU’s new African Credit Rating Agency. This is a direct response to systemic biases from the dominant international agencies that lead to unfairly high borrowing costs. The recent analytically flawed downgrading of our Afreximbank by Fitch Ratings is a glaring example of this problem. Supporting AFCRA will help foster sensitive assessments that measure actual, not just perceived, risk.

“The challenges facing our continent will not be solved by more aid or stricter border control, but by bold, strategic and mutually beneficial industrial endorsement in Africa. Let us work together to build factories, not fences. Let us foster trade that has value on both sides of the Mediterranean.

“Let us create a future where Africa’s greatest export is not its people, but the innovative products and services they create. Nigeria, and indeed Africa, is ready to build this shared future. We ask the EU to join us as we build the future that the coming generation will be proud of,” Hon. Kalu said.

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