Dr Shantayanan Devarajan, the world acclaimed economist and Chief Economist at the World Bank’s African Region, has indicated that wrong interventions by African governments backfire on their economies and lead to market failures. During the BOCCIM National Business Conference that was held in Francistown recently, Devarajan indicated that as compared to Asian countries, Africa continues to fail dismally in establishing thriving markets.
“African governments have not intervened as expected to propel diversification to take place for the past 20 years,” he lamented.
He also added that Africa still has a problem of skills development, which hinders progress in its economies and established that although the African countries are facing infrastructure deficit, he found out in his research that it is not really the cause of the problem but it is due to wrong government interventions.
Devarajan went on to establish that governments have exerted their efforts in some economic activities that could have been done by the private sector.
“Insufficient skills in Africa remain another huge challenge for the private sector to thrive because Africa in this regard is still way behind as compared to other continents,” added Devarajan.
He also told the participants that during his research he found out that Africa has the highest rate of absentees in the world, which also impacts on the education system.
He lamented the competitiveness of employees, saying that they are always subjected to poor health and this then burdens productivity.
Devarajan went on to illustrate that the region of Africa as a whole is lagging behind when it comes to labour regulations and there is much need to address this and come up with regulations that are favourable to the diversification of the economy.
“Government failures are the ones impacting on Africa and normally they are politically influenced due to some individuals in the systems benefiting from the self tailored regulations,” he said.
However, Deverajan pointed out that he is confident that Botswana can make headway in that regard by being an open and transparent country that allows free information flow to the people. He added that it would help the government create confidence among its citizens and indicated that the government needs to take caution when addressing the market failures not to come up with wrong interventions.
After joining the World Bank in 1991, Dr Dejaravan became a Principal Economist and Research Manager for Public Economics in the Development Research Group and also became the chief economist of the human development network of the South Asia region.
He has over 100 publications to his belt and his research covers public economics, trade policy, natural resources and the environment as well as general equilibrium modeling of developing countries.
