This is the 08th post in a blog series to be published in 2022 by the Secretariat on behalf of the AU High-Level Panel on Emerging Technologies (APET) and the Calestous Juma Executive Dialogues (CJED)

The African Union (AU) Agenda 2063 considers Science, Technology, and Innovation (STI) a prerequisite for accomplishing Africa’s socio-economic developmental goals.[1] AU’s Agenda also recognises that for African countries to address challenges such as poverty, diseases, climate change impact, food security, and efficient healthcare, peace and security, Africa should recognise STI as the epicentre of its socio-economic development. This is well captured in the Science, Technology, and Innovation Strategy for Africa (STISA-2024).[2]

Africa’s history in harnessing STI has amassed a net negative impact, as evidenced in the past three industrial revolutions, i.e., the steam engine, the age of science and mass production, and the rise of digital technology.[3] However, the 4th Industrial Revolution (4IR) aptitudes appear different. The 4IR can potentially leapfrog’ Africa’s economic development and further stir a surge of innovations that could transform Africa. This could lead to achieving the socio-economic development goals across the African continent.[4]

In recent history, Africa has turned to primarily rely on imported technologies developed from other continents rather than develop their own technologies. As such, Africa is generating about 1.1% of the global scientific knowledge. Notably, the African continent has approximately 79 scientists per million inhabitants, as compared to the 4,500 per million people in the United States of America.[5] This is much lower than some European countries, Asian countries, and the Middle East countries. This can be attributable to the limited investments in STI by African countries. Despite continental efforts, currently, African countries invest less than 1% of their Gross Domestic Product (GDP) towards STI.[6]

Unfortunately, the limited investments towards STI-related activities have resulted in other complexes, such as the limited skilled human resources and infrastructure for STI-related activities.[7] The phenomenon commonly referred to as the “brain drain”;” - the emigration of top scientists, engineers, and innovators - has further impeded scientific knowledge in Africa.[8] Most of Africa’s skilled workforce turn to emigrate to other continents and countries in pursuit of better resources and infrastructure. In addition, African innovators and scientists are frustrated by the limited access to African markets available for their products. This is because most African people prefer imported technologies, goods, and services rather than locally produced ones.[9] Unfortunately, this is significantly reducing Africa’s capacity to supply African countries.

Africa has also been criticised for largely focusing on research and development, with minimal emphasis on technological innovation. Technological innovation, however, remains key to transforming scientific and technological knowledge into goods and services that can potentially bolster Africa’s socio-economic development.[10]

Additionally, there are limited incentives and rewards available for African innovators compared to other regions of the world. This is because the national ecosystems of innovation for most African countries remain underdeveloped[11] despite the fact that numerous innovation activities are currently occurring within local communities and some institutions across the African continent. For example, digital technologies coupled with artificial intelligence technologies and satellite imaging are currently proving crucial information about crop performance for African farmers. This is boosting the continent’s food production and crop cultivation. Additionally, there has been incremental utilisation of drone technologies for agricultural and entertainment purposes.

African countries are encouraged by the African High Level Panel on Emerging Technologies (APET) to increase their incentives to encourage STI-related activities. This can significantly help African countries benefit from 4IR-related socio-economic development.

Incentives are mechanisms and systems established to encourage or induce productivity.[12] In STI, the various incentives can be classified into the following categories: fundamental, institutional, and infrastructural, financial, fiscal, budgetary, legal and regulatory, public procurement, honorific, and knowledge-based incentives.[13] The fundamental incentives include market economic incentives such as free competition, private property, openness to the global economy, efficient bureaucracy, and stable democracy.[14] Thus, APET is encouraging the political and economic reforms undertaken by African countries in the last few years.

Furthermore, African countries can pursue institutional and infrastructural incentives such as technological innovation and science parks. This can enable the transfer, extension, diffusion, popularisation, information, networking, and international cooperation. The institutions and infrastructures for research and development should also be modernised, strengthened, and efficiently connected to industrial activities within African countries. Most importantly, the infrastructure for information and communication technologies should be improved to enhance productivity and efficiency substantially. This can significantly support technological transfer, diffusion, and networking. On the other hand, the financing of technological change is particularly paramount as most African countries have limited, well-coordinated and developed financial systems.

African countries are also attracting limited foreign direct investment and commercial credit. Thus, strengthening the privatisation and diversification of Africa’s financial systems can enhance the availability of venture capital and credit to farmers and the informal sector.[15] The financial incentives, particularly domestic and foreign direct investment, should be reinforced in view of the globalisation of the economy. This can eliminate the constraints against local equity, local inputs, and repatriation of dividends. In addition, a more positive approach towards multinational corporations should be adopted to contribute to the local and national technological capacity building and strengthening.

Fiscal incentives, including tax benefits, rebates, exemptions and vacations, as well as accelerated depreciation, can be used to foster collaboration between research and development and industry use of technology. This can assist with training, repatriation of national expatriates, and utilisation of foreign talent/consultants through strategic technological imports.

Some African countries are currently establishing and strengthening Export Processing Zones (EPZ). The zones are coupled with tax incentives and facilities for transferring technologies. This enables African countries’ institutions to have more freedom to hire expatriate experts. For example, Mauritius has successfully implemented this incentive, which can serve as an inspiration for other African countries.[16] Through the EPZ, Mauritius incentivised scientists and innovators by affording them income tax relief and other incentives to promote innovation output in their country.

Consequently, this was attractive for innovators and investors, and the country expanded their socio-economic activities rather than the sugarcane-dependent economy. The country has expanded on other industrial activities such as clothing and oil manufacturing.[17] Apart from offering tax incentives, the Mauritius EPZ also provided vast labour and infrastructure necessary for innovation.

Budgetary incentives, except for scholarships, are progressively being regulated by the new General Agreements on Tariffs and Trade (GATT) Agreement.[18] This is in the form of investment allowances, modernisation of grants, industrial subsidies, and export compensations. This can be implemented to the advantage of African countries that cannot compete with the industrialised countries. Furthermore, the legal and regulatory incentives can essentially protect intellectual properties and technologies, administer minimal technological standards, and facilitate the acquisition of essential foreign experts through residence and work permits and tax holidays. Such efforts can enhance the status of African researchers. In addition, the legal and regulatory incentives should be reviewed regularly to adjust to the ever-changing circumstances. For example, technology and innovation progress are progressively being regulated by the market than bureaucratic regulations. However, minimal regulations should be implemented.

Public procurement can deliver essential incentives to local industries by upgrading and strengthening their technological capacity. Even though the new GATT Agreement restricts this policy instrument, it can still benefit indigenous enterprises.[19] On the other hand, honorific incentives, such as prizes and awards, can be utilised as public recognition mechanisms for excellence for Africans. These kinds of incentives have demonstrated cost-effectiveness in encouraging innovation and technological improvement.

APET recommends that these African countries adopt these incentives as they can strengthen their knowledge base, such as basic education. This can also encourage girls to pursue science, technology, engineering, and mathematics disciplines. Such incentives can also promote technical training, apprenticeship, sabbatical leaves, study tours, and optimal participation in international seminars. Regrettably, Africa’s education has declined in the last few years because of the rapidly increasing population and declining resources. Thus, African countries should prioritise higher levels of education for their citizens in the next decade.[20]

The advantages of providing incentives to African innovators and scientists were demonstrated when the COVID pandemic hit Africa, as many African countries were facing shortages of personal protective equipment (PPE) such as masks, gloves, and sanitisers. There were reported shortages of antigen testing kits because they were expensive, and these incentives encouraged innovation and manufacturing within African countries. Countries like Malawi experienced challenges of limited PPEs in their fight against the COVID-19 pandemic. However, the country pursued options of locally manufacturing the PPEs. This was substantially enabled and improved by the Malawi government’s decision to remove taxes on the raw materials suitable for manufacturing PPEs. Consequently, Malawi managed to manufacture these PPEs much more cost-effectively and were readily accessible to Malawi’s local population.[21]

In conclusion, APET believes that science, technology, and innovation are paramount to sustainable growth for African countries. Thus, enabling and letting innovation and scientific knowledge flourish can systematically and significantly develop the African continent. Thus, by incentivising African innovators, impediments that have derailed innovation can be eliminated. Consequently, Africa will not miss the 4IR train and will improve her socio-economic development and growth within the AU’s Agenda 2063 and STISA-2024.

 

Featured Bloggers – APET Secretariat

Justina Dugbazah

Barbara Glover

Bhekani Mbuli

Chifundo Kungade

 

[1] https://au.int/sites/default/files/newsevents/workingdocuments/33178-wd-stisa-english_-_final.pdf.

[2] Richard Munang and Zhen Han, Food security: Regional solutions key to solving Africa’s challenges, https://www.un.org/africarenewal/web-features/food-security-regional-solutions-key-solving-africa%E2%80%99s-challenges

[3] REPORT, The Fourth Industrial Revolution and digitization will transform Africa into a global powerhouse

Njuguna Ndung’u and Landry Signé Wednesday, January 8, 2020, https://www.brookings.edu/research/the-fourth-industrial-revolution-and-digitization-will-transform-africa-into-a-global-powerhouse/.

[4]https://www.bcg.com/publications/2021/innovation-in-africa

[5] Africa produces just 1.1% of global scientific knowledge - but change is coming. https://www.theguardian.com/global-development-professionals-network/2015/oct/26/africa-produces-just-11-of-global-scientific-knowledge#:~:text=According%20to%20the%20World%20Economic,at%20656%20and%204%2C500%2C%20respectively.

[6] Here’s why Africa needs to invest in home-grown science. https://www.weforum.org/agenda/2020/08/here-s-why-africa-needs-to-invest-in-home-grown-science/.

[7] https://www.oecd.org/sti/Research%20and%20Innovation%20Management-%20Comparative%20Analysis%20Synthesis-%20James%20Jowi%20.pdf.

[8] Olumide, Henrie & Benedict, Olumide Henrie & Ukpere, Wilfred. (2012). Brain drain and African development: Any possible gain from the drain?. African journal of business management. 6. 2421-2428. 10.5897/AJBM11.2385.

[9] Africa must reduce its dependency on raw material exports and imports, 05-Nov-2015. https://www.afdb.org/en/news-and-events/africa-must-reduce-its-dependency-on-raw-material-exports-and-imports-14957.

[10] https://www.acode-u.org/uploadedFiles/PRS44.pdf

[11] Olugbenga Adesida, Geci Karuri-Sebina & Erika Kraemer-Mbula (2021) Special Issue: Can innovation address Africa’s challenges?, African Journal of Science, Technology, Innovation and Development, 13:7, 779-784, DOI: 10.1080/20421338.2021.1958986.

[12] Guidelines for Grant Budgeting, 2019, https://www.theglobalfund.org/media/3261/core_budgetinginglobalfundgrants_guideline_en.pdf.

[13] https://www.un.org/development/desa/en/wp-content/uploads/2020/07/RECOVER_BETTER_0722-1.pdf.

[14] Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa, Prepared by Economic Policy, National Treasury. http://www.treasury.gov.za/comm_media/press/2019/towards%20an%20economic%20strategy%20for%20sa.pdf.

[15] https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Financial_Inclusion_in_Africa.pdf.

[16] Madani, Dorsati. (1999). A Review of the Role and Impact of Export Processing Zones. 10.1596/1813-9450-2238.

[17] https://www.google.com/search?q=mauritus+main+exports&rlz=1C1GCEU_enZA941ZA941&oq=mauritus+main+exports&aqs=chrome.69i57j0i13j0i22i30j0i390.5011j0j15&sourceid=chrome&ie=UTF-8.

[18] https://www.wto.org/english/res_e/booksp_e/agrmntseries2_gatt_e.pdf.

[19] THE ROLE OF PUBLIC PROCUREMENT POLICY IN DRIVING INDUSTRIAL DEVELOPMENT. Inclusive and Sustainable Industrial Development Working Paper Series

WP 8 | 2017. https://www.unido.org/api/opentext/documents/download/9921981/unido-file-9921981.

[20] https://www.africa.upenn.edu/Padis/padis5.html.

[21] https://www.afdb.org/sites/default/files/documents/publications/afdb20-04_aeo_supplement_full_report_for_web_0705.pdf.