That a country or company should concentrate on products in which it has an advantage over another. This theory, just like the comparative advantage one, is a myth.

The competitive advantage theorists ignore the role of technology in their assumptions. The availability of technology ensures that a company in Uganda can be able to produce the same goods as any other anywhere in the world.

For example, when it comes to cars, design technology is available and the automotive parts suppliers are the same. It doesn’t matter where the factory is. That is why a country like China, which made almost zero products in the 1960s, is now the leading factory of the world.

China didn’t have any competitive advantage in the 1970s and 1980s when they started creating industries. They had many unemployed people just like Uganda.

They just attracted technology from Western countries and started creating these factories. Today, there is almost no product that can be made in the West that can’t be made in China. So, where did they get their competitive advantage?

When Mo Ibrahim started his mobile telephone business that made him the billionaire that he is now in Africa, there was no competitive advantage for mobile phones. Africans were poor, didn’t have electricity, and perhaps people said they didn’t have anybody to call.

In a few decades, Africa — at least the urban areas — is as connected telephonically as anywhere else in the world. If Mo Ibrahim had listened to the competitive/comparative advantage theorists, he wouldn’t have created his empire. He probably knew that the competitive advantage theory was a myth.

Most African competitive advantage theorists argue that Africa’s advantage is in agriculture. On the surface, it is. It is almost green everywhere with favourable climate for agriculture at least in the sub-Saharan region.

But land ownership in Africa is a mess as very few people own land that is significant enough for profitable agriculture. Farming where each household uses rudimentary tools to grow its own food can hardly grow enough of it for the entire continent.

There are many post-harvest losses in such an environment on top of low yields. Such households depend on God to provide rain and when God doesn’t, there is hunger. The USA, which is a technologically advanced wealthy country, still grows more food than Africa yet the percentage of its people involved in agriculture is less than two per cent compared to Africa’s 80 per cent. That explains why Africa still imports food, worth $35 billion annually.

The USA, which competitive advantage theorists would not consider to have an edge in agriculture, is the world’s largest exporter of foodstuffs.  In 2017, according to CNN, the top export earner for the USA was food, beverage and feed bringing in $133 billion.

Soybeans were the number one product at $22 billion followed by meat and poultry at $18 billion. Dairy, eggs and honey are the fastest-growing exports from the USA — a really non-agricultural country according to competitive advantage theorists.

So, if 80 per cent of your population is involved in agriculture and still imports more food than you grow, then you don’t have a competitive advantage in agriculture and therefore you should look elsewhere.

You can argue that since the USA exports more agricultural products than other countries, then Africa should concentrate on agriculture as well. The USA is a huge country where land fragmentation isn’t an issue like it is in Africa. The average size of a farm in the USA is 444 acres compared to 5.9 acres in Africa.

What turned around the fortunes of China, and indeed the entire developed world, was how fast they industrialized. Countries develop when the majority of their populations have predictable income, which can’t be provided by rain-fed agriculture.

Industries and perhaps the growing service sectors provide that opportunity. Countries that add value to their products develop faster than others. Not those depending on substance agriculture.

Africa has a huge unemployed workforce which is semi-skilled and suitable for industrial work, possesses many minerals which are exported as raw materials, many rivers and abundant sunshine which can be tapped for electricity generation.

So, if the competitive advantage theory holds any water for Africa, it is in industrialization.

djjuuko@gmail.com

The writer is a communication and visibility consultant.