Dr. Edward Mensah replies to Dr. Iweriebor's piece, arguing that creating an African technology is far more complicated than he is proposing. Read on!
Mr Iweriebor's article is very well written. However, I have a few problems with his propositions for African technological development.
First, there can be no sustainable technological development without an appropriate educational foundation, especially in the hard sciences, engineering, and business management.
Second, there must be a transparent legal infrastructure that is capable of protecting property rights and profits.
Third is the credibility criterion. That is, the investors--Diaspora and domestic partners--must believe in the stability of government industrial policies. Not only should the policies be conducive to investment, but they must also not be changing every year (or month).
In most instances the market for the goods and services to be produced by the investors is too small to sustain a profitable level of investment. Purchasing power is too low in all the countries, except South Africa and, perhaps, Nigeria. This implies that government subsidies may be needed for a very long time. Perpetual subsidies constitute a recipe for disaster. Do not forget the import substitution industrialization policies of most post-colonial African
countries. These policies left a trail of failed projects all over the continent when African governments invested in all sorts of businesses from soap and bread factories to machine tools. This mess must never be repeated. There is no social benefit to producing widgets at 10 times the cost of importing it from an efficient producer. Compare the economies of China and
India and it becomes very clear that too much protection for domestic industries ends up creating a pool of poor citizens, as is the case in India.
Mr Iweriebor's case against technology transfer is very weak. The history of technology transfer to South Korea and Mexico shows that these two countries followed different paths. While South Korea insisted at onset that foreign investors should transfer the production blueprint or the know-how before they are allowed to operate Mexico naively accepted mainly the plants and
equipments. The Mexican model was a total disaster because it allowed the foreign US investors to build the plants, import the skilled labor, and only use Mexican raw materials and unskilled labor.
Nobody will say that the South Korean model was a failure since it is the 12th largest economy in the world, with over $8,000 per capita income compared to $350.00 in Ghana. At independence in 1957 Ghana was actually better positioned to develop than South Korea in terms of human and natural resources.
Finally, it seems to me that Mr Iweriebor's technology transfer (and development) model is based on altruism. No where did I read about the types of incentives needed to attract private African investors to participate in the development process. There is no successful case of sustained economic development based on altruism, none. Economic growth and development are based on the capacity to create new ideas, ideas that have commercial value to the innovators and can be protected by the legal and the political infrastructure. Without investments in human capital via free education we have no basis to even begin to talk about technology transfer. Africa's pipeline for innovative ideas will be empty without the human capital to support it.
Health Economics and Information Management
University of Illinois at Chicago