Chris BishopBy Chris Bishop|December 8, 2020|6 Minutes|In AfCFTA

AfCFTA

Can Africa Find The Elusive Singapore Touch?

The fashionable comparison with Singapore often pops up when African nations talk of economic revival. Wamkele Mene, the new secretary general of the African Continental Free Trade Area, is the latest in a long line of continental leaders to cite the Singapore factor in an exclusive interview with Billionaire Tomorrow in Accra. But what does this really mean? Billionaire Tomorrow editor Chris Bishop takes a look.

Why do African nations aspire to be Singapore? What did create the booming island economy of nearly six million people and one of the four so called Asian tiger economies known for its hi-tech industries and high-speed internet where almost every item produced is exported. The Washington Post said of the tower blocks of Singapore: “A shimmering city-state was the house globalisation built.”

Well, in a nutshell, Singapore has made one of the swiftest and emphatic leaps from third world poverty to first world wealth. Fortune magazine ranks Singapore as the third richest economy in the world with the freest economy on the planet. In 1965, GDP per capita was a mere $516, by 2004 it was $22,000 and in 2011 it had risen to $50,123.

“The only difference between us and Singapore is that they had oil and we had sugar cane!” a banker in Mauritius once joked to me when referring to his own island’s rapid economic progress.

Singapore is a tough act follow. In 2017, Singapore’s foreign direct investment, that great bellwether of economic growth, stood at just over $83 billion. By contrast, the entire African continent of nearly a billion people, garnered a mere $42 billion in 2017.

Yet, Wamkele Mene, the father of the new African Continental Free Trade Area, believes that Africa can indeed do a Singapore.

“If Singapore today, a single country, can contribute over three per cent of global output and trade, why can we not have the same vision for 30 years’ time for Africa? I don’t see why we can’t do it, unless we don’t have the discipline for a sustained industrial development plan that we implement, decade after decade, just like Singapore did. Industrialisation is not a pill that you swallow and the next day you are industrialised. You require determined discipline over decade after decade. So, I think we have to work on this idea of placing Africa in higher levels of industrial development so 15 to 30 years from now we can point to a few value chains across the continent with job creation. I think it is possible,” he told Billionaire Tomorrow.

“We have people who say I am dreaming but if you had said that about Singapore 40 years ago when Singapore was a fishing village nobody would have believed that they would be where they are today.”

A dream that will be nothing without iron discipline. Lawyer and politician Lee Kuan Yew was the father of Singapore’s economic transformation and its prime minister between 1959 and 1990. He saw a strong economy as the guarantor of Singapore’s independence and enforced cooperation, austerity and above all discipline.

A few years ago, I had the privilege to interview a woman who worked with Lee Kuan Yew in his cabinet. In 2009, he appointed Lim Hwee Hua as the first woman minister in his cabinet dealing with finance and transport.

“He was a visionary and used to say ‘fix it now and then we will find a better way of doing it’ Everyone through he was unapproachable, but he would always listen to people and learn from what they had to say. He was like a sponge,” chuckled Lim.

I asked about the secret to Singapore’s success – fighting corruption came top of the list.

“People take a very dim view of corruption; no one wants anything to do with it. It is in our DNA. Even members of your own family won’t talk to you if you are found guilty of corruption,” she said.

Singapore has the Criminal Breach of Trust Act that covers everything from fraud, embezzling and bribery right down to misrepresenting financial products, says Lim who now works in private equity.

“The penalties can be years in prison, depending on the amount of money involved,” says Lim.

“It is how we maintain our integrity as an economy. We take the view that no one in the world owes us a living and that no one is forced to do business with us. So, we try to ensure clean fairness to encourage investors to put money into our economy.”

Leadership was also important in making economic change.

“What it needs is a change of mind-set at the top and it will percolate down to the people,” she says.

Food for thought for the leaders of Africa as they prepare to launch the African Continental Free Trade Area.