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Writes Prf Ereck Chakauya
There is no doubt that research and development (R&D) is a good feed to sustainable innovation and industrialisation. R&D fosters a culture of experimentation and learning and can create an ideal ecosystem for entrepreneurship and start-ups to thrive as well as address societal needs such as food, shelter, energy, health and clean water.
Therefore by investing in R&D, organisations and nations can create a pipeline of innovative solutions that can drive sustainable growth and contribute to a more sustainable future. Undoubtedly, the converse is true, without R&D and innovation, society will regress and ultimately die a slow painful death unless it just consumes from other nations.
Literature suggests that innovation in Africa is pervasive meaning it is widespread, ubiquitous, deeply ingrained and having significant impact. Put simply, innovation is found everywhere across the continent. This is indeed the case but a bit more complex than that. A few factors make the statement complex. Most African countries are experiencing low levels of public R&D investment and business and private sector funding is declining even for the best-performing economies in the continent.
The majority of R&D funding in Africa comes from government sources (70%), followed by the private sector (20%), and foreign sources (10%) (African Union, 2019). In 2021 only private sector funding was at an average of 35% across the continent (compared to developed countries at 40-70%). According to studies by AUDA NEPAD and SGCI, the implication is that Africa is heavily dependent on external funding as reflected even on the publications where those with all African others are almost non-existent.
Furthermore, it is clear that the government is the biggest funder for R&D. The implication is that without proper policies on commercialisation of publicly funded R&D as is the case in most countries, the research just ends in publications and no products at all. Put blindly, without foreign R&D funding and results, Africa’s industry would not exist.
No economy can compete without a strong innovation culture and without a strong drive to fund R&D, Africa will remain a consumer of both knowledge and products. It is not a secret that R&D funding in Africa is significantly low compared to the global average, with most African countries spending only a fraction of their Gross Domestic Product on research and development (GERD), often less than 0.5%, while the global average is around 1.7%.
In 2020, Africa’s R&D expenditure was 0.4% of GDP, compared to the global average of 2.2% (UNESCO, 2020). This points to a major underinvestment in African innovation; even the continent’s leading spender, South Africa, only reaches around 0.85% at its peak. The recently concluded Science Technology Innovation Strategy 2024 (STISA 2034) review identified the lack of dedicated funding mechanisms for the strategy as one of the major impediments to implementation and suggested a dedicated Africa Science and Technology Innovation Fund (ASTIF). Would this stop the wound from bleeding though, one may ask? this lack of funding is primarily due to limited public sector investment and a relatively small contribution from the private sector.
The key factors that cause underinvestment in R&D are multifaceted in Africa
Firstly, Low overall spending: African countries collectively spend a very low percentage of their GDP on R&D, significantly below the global average. The lack of funding for R&D leads to a brain drain, as talented researchers and innovators seek opportunities abroad. It’s estimated that Africa loses around 20,000 skilled professionals annually (World Bank, 2018). Even if the money was availed, maybe the absorption capacity is limited, and there aren’t enough high-impact projects that can absorb the funds. Africa needs to assemble the best brains across the continents through Agents like AUDA NEPAD to come up with high-impact projects regionally and continentally.
Secondly, government dependence: In several countries across the continent, Higher education and government have the most researchers and certainly governments are the primary source of R&D funding, with limited private sector involvement. One could even argue that the nature of the private sector is such that it’s not designed to conduct R&D except for localising foreign technologies.
Put crudely, there is no industry to talk about except distributors and retailers, who rely on foreign institutions for knowledge. The implication is that any intervention to rescue the situation should start with innovating the government processes that fund R&D such as science granting councils, which currently are heavily dependent on overseas funding. They need to be cured from the donor syndrome.
Having identified the problem, how then can we resolve the issue of inadequate funding? Well, the solution may be in innovating the funding mechanisms themselves as well as cultivating a culture of innovation. STISA 2024 promised to advocate for governments to allocate a higher percentage of their GDP to R&D, aiming for at least 1% as agreed at the Abuja declaration of 1980. That did not materialise.
One could argue that as long as our industry can access solutions from elsewhere, why then would they support R&D. Experiences from Asia show that China invests heavily in R&D at about 2,25% GERD, but at least 70% of that comes from industry? Moreover, the majority of China’s industries are homegrown. Maybe there lies the answer. The government could start by making innovation a priority for the purpose of growing local industry. Maybe the government should consider legislating that investment in R&D should be always higher than the rate of growth of the economy.
The advantage of it is that how much money goes into R&D is not a function of the ruling party but is informed by legislation. This could have a lot of downstream benefits. The government can then incentivise the private sector to invest in R&D while at the same time putting systems in place to address corruption and abuse of the incentives. Within the mechanisms of funding, more funding should go into promoting STEM subjects and postgraduate studies. Without a thriving PhD program, certainly, R&D cannot yield tangible results.
Neighbourhood effect – the idea that a person’s behaviour and attitudes are influenced by their neighbourhood. This can occur directly or indirectly. We have seen the influence of Japan across Asia through its policies. Africa needs torch-bearers who can show the way and South Africa, Egypt, Rwanda, and Morocco among others could be those leaders. While still low, South Africa stands out as the country with the highest R&D investment in Africa relative to its GDP but encouraging.
The recently approved STISA 2034 covering the next 10 years of Agenda 2063, provides opportunities to get the R&D funding right. Firstly, Public-Private Partnerships (PPPs) through collaborations between government, industry, and academia should be the new norm in the mobilization of resources and expertise to support R&D. PPPs can increase R&D funding by up to 30% (World Bank, 2019).[1]
Secondly, innovation hubs and incubators that provide dedicated spaces for innovation can provide access to funding, mentorship, and networking opportunities. Africa has over 600 innovation hubs and incubators, which can support R&D and entrepreneurship (GSMA, 2020).[2] Examples from Zimbabwe, Ethiopia, Kenya and SA suggest that this model works. Governments can then provide directed funding towards these activities through Innovation funds to de-risk projects.
Thirdly, fit-for-purpose multilateral cooperation agreements for example the BioFISA programme. On this one the government of South Africa partnered with the Ministry of Foreign Affairs Finland and AUDA NEPAD to support SADC member states. Each of the parties (SA, Finland, benefiting countries) contributed at least 10% cash towards the flagship project and the results included start-up companies, products on the market and capacity building. The African Union’s STISA-2034 strategy could advocate for such regional, multi-stakeholder agreements including private sector.
In conclusion, Africa must mobilise domestic financial resources to fund R&D and industrialisation. There is growing evidence to show that donor funding is significantly being cut and increasingly with unfavourable conditions. African governments should create industries that support R&D as well as come up with partnerships with existing industries that want to grow the African economy.
Incentives are needed for those industries that support innovation. Moreover, public sector institutions should become efficient and innovative so as to drive the African development agenda. The public sector is the biggest funder of R&D and would do with better efficiency and being results-based. Adequate funding for R&D is crucial for mainstreaming STI in industrialization. Addressing the challenges and leveraging the opportunities outlined above can help unlock Africa’s potential for innovation-driven economic growth.
Prof Ereck Chakauya (SANBio network Manager) can be contacted at [email protected]
[1] World Bank. (2018). Africa’s Brain Drain.
[2] GSMA. (2020). Africa’s Innovation Hubs and Incubators.
