The decision by the U.K. to leave the European Union has sent shock waves around the globe, prompting many countries and businesses to reassess their business ties with both Britain and the EU. Africa will need to do the same, Ibrahim Assane Mayaki, CEO of the New Partnership for Africa's Development (NEPAD) agency, told the Nikkei Asian Review in an interview.

Mayaki, who is also a former prime minister of Niger, was in Tokyo to attend a seminar on structural economic transformation in Africa, organised by the Japan International Cooperation Agency, the United Nations Industrial Development Organization and NEPAD. The seminar was held in relation to TICAD VI (the Sixth Tokyo International Conference on African Development), due to be held in Africa for the first time in August.

Q: What effect will Brexit have on Africa and Africa's development?

A: It is true that we should have a prospective analysis of possible consequences. One possible consequence is that the EU has economic partnership agreement (EPA) with Africa. Some regions have started signing, some of us have not signed, and some countries within the regions have framework agreements with the EU. It will have an impact, on this specific trade issue, because when the EU negotiated with the African countries, the U.K. was part of it.

So evidently, somehow it will have a consequence, but I can't evaluate what consequence. I think it has to be technically looked at. ... A lot of question marks, but evidently, we need to ask our technicians in trade, that are at the core of the negotiations of EPA, to make an evaluation of what will it have as consequence.

Q: Will some countries be put off from signing the EPA after Brexit?

A: I can't answer intelligently to that. The only thing I can say is that we need to reassess again the EPA negotiations and look at them by integrating quantitative factors that might emerge from Brexit. It is too early to say. What is sure is that we need to reassess.

Q: TICAD -- A Japan-led conference on African development -- will be held in Africa for the first time. What is the significance of this?

A: It is significant because it shows an equal partnership, and politically, it is very important. It [also] comes at a moment when many countries are transforming economically, and opening to the private sector. Prime Minister Shinzo Abe will have a very significant group of Japanese private sector operators [coming with him]. I don't think these people will want to lose their time. They want to go to discuss; otherwise they wouldn't go. So there is an appetite which is very positive.

Q: What does Africa need to develop?

A: Botswana and the Central African Republic [had] approximately the same period of independence, and the same endowments. Between the 1960s and today, Botswana went from $400 GDP per capita to $7,000. CAR went from $400 to $200. In Botswana you had a planning process which never ceased, you had agreed upon a redistribution of the fruits of growth and you had high priority given to human capital. So on the one hand you have inclusive institutions, [and] on the other hand you have extractive institutions that have not changed since the [colonial times]. Our objective is to reduce the number of countries looking like CAR.

The second issue is that not every African country will need to industrialize. We need to think regionally. Ethiopia, 100 million inhabitants: makes sense. Kenya: makes sense, etc. [But] there are very small countries which need to fit into their regional space. With the creation of a regional market, economies of scale, intraregional trade -- in that regional space you can have a learning curve of competitiveness that will allow Africa to be more present on the global scene. We need to increase intra-African trade, so we can be more competitive on the international scene.

Q: What role should African companies play in the development of Africa?

A: It is a very important question. More than 50% of African economies are informal. In terms of entrepreneurship, there is a huge potential there. We need to transition them toward becoming formal entrepreneurs in small and midsize enterprises. And it's a role of the state to allow that transition to take place. This is really the future of the African private sector. You have billionaires, but there are not many. Industrialization will come from small and midsize enterprises, and it will come from the transformation of the informal economy and there you will have the huge potential of entrepreneurship.

Q: Why hasn't that happened yet?

A: It hasn't happened yet because historically, if you look at how political regimes have evolved, they always looked outwards, through strategies like the Washington Consensus. My hypothesis is that the role of the elites was to look at the world and not think about internal modernization.

Now the big issue is that the majority of the population is very young. They have the real political power because it is a unique configuration in the history of demographics -- 75% under [the age of] 25 -- and they know they have the power to change. So the governments need to think about how to create employment, how do we plan better, because it is their own stability which is at stake. A Boko Haram fighter in Niger, Nigeria or Chad earns $3 a day, which is three times the $1 a day of the World Bank [poverty line]. He lives in an underprivileged territory. So if you create these conditions, you will have an expansion of Boko Haram. And then the states will fail, and your stability will be totally erased. There is that consciousness now, but whatever the policymaker does, he needs to think about that huge young population.

Interviewed by Nikkei staff writer Shotaro Tani

Source: http://asia.nikkei.com