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How to create jobs in Africa

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The nearly two kilometer-long chaotic queue of trucks on the Zimbabwe side, waiting to get into Zambia, hints that things are not quite that perfect yet, an instinct backed up by experience. Passport stampings, vehicle clearance, road insurance, carbon tax, a temporary import permit, district council charge, toll fees, and customs inspection involve a lot of “shopping” between multiple buildings that slows the process down.

Vice President Scott says that Africa should follow the example of China in keeping the costs of money down and its exchange rate weak. He cites the example of a Zambian entrepreneur who made it in manufacturing in China as an example of how Africans can prosper in the right environment.

In spite of their extraordinary energy and tenacity, a key reason why African entrepreneurs find it easier to prosper elsewhere is because of the animus their governments routinely display toward private business.

Old habits die hard. The colonial powers used a highly interventionist state to protect their interests. Most post-independence African leaders used this model to offer patronage to keep their allies on board. Private producers have been consumed by the political imperative to meet expectations, shore up support, and distribute favors.

In Zambia, big business became a target of nationalization in the late 1960s, a costly disaster only remedied by the privatization of the 1990s. Neighboring Zimbabwe has taken the more extreme and recent action of outright seizures in the private sector, cloaked in the nationalist term, “indigenisation.” Despite its obviously calamitous economic costs, this route offers a tempting policy for many African governments, not least Mr. Scott’s.

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