Low Level of Human Capital formation, Brain Drain and Lack of Technology Transfer Human capital in the form of knowledge is said to make the difference between poverty and wealth. As

the World Bank (1999:1) noted:

“Ghana and the Republic of Korea started with almost the same GNP/capita in 1960. Thirty years later the Korean GNP/capita had raised more than six times, the Ghanaian GNP/capita was still hovering at the same level (in 1985 prices). The evidence shows that half of the growth gap could be explained in terms of traditional factor inputs (in classical economic terms: land, labor, and capital), the other half was attributed to knowledge as a factor of production.”

Development policy targeting technology acquisition and the reduction of the technology gap must be aimed at facilitating the interaction between technology flows and human skills (Abramovitz, 1986).

That was why East Asian countries have been successful in narrowing the technology gap in a few decades, and their educational attainment is credited for much of this achievement (Lall, 1992). Hence, as Nelson and Phelps (1966) suggests, a large stock of human capital makes it easier for a country to absorb the new products or ideas that have been discovered elsewhere. As a result, a follower country with more human capital tends to grow faster because it catches up more rapidly with the technological leader.

By the same token, endogenous growth theory has shown that differences in the level of countries‟ human capital lead to differences in their capacity (i) to invent new technologies, (ii) to adapt and implement technologies developed elsewhere, and (iii) to attract other factors such as investment in physical capital, which also contributes to economic growth and development. In short, the driving force

88 of growth is the accumulation of knowledge. Therefore, it is important to recognize that human capital accumulation is not "welfare"; rather, it is a productive investment with a very high payoff to individuals.

At the national level, education and training require adaptation to these needs. Apart from improving capacities for managing diversification policies and training planners and policy makers so as to give them in-depth knowledge of existing channels and axes for possible industrialization based on diversification and the factor endowments of their countries, there should be a special focus on research and development with a view to promoting as well as disseminating and adapting innovation

On top of the low level of human capital formation in SSA which is under the threshold necessary to start a modern production system, the most critical constraint for the zero-sum game of human capital formation in Africa is the “brain drain.” The exodus of highly trained manpower from developing countries to industrialized nations is not a new phenomenon; however, the magnitude of the problem in Africa and its alarming increase presents the growing urgency for action as the consequences of the brain drain threaten to stunt the overall development of the continent. Africa is a net exporter of its most talented human capital: several hundred thousand highly educated Africans live and work abroad, while over 100,000 experts from developed countries are currently employed in Africa.

Based on the International Organization for Migration (IOM) data, Barka (2000) explains that Africa has already lost one third of its human capital and is continuing to lose its skilled personnel at an increasing rate, with an estimated 20,000 doctors, university lecturers, engineers and other professionals leaving the continent annually since 1990 (table 4.2).

Table 4.2: Emigration of Skilled Africans to Industrialized Countries

Time Period Average Annual Rate Total Number

1960-1974 1,800 27,000

1975-1984 4,000 40,000

1985-1989 12,000 60,000

Since 1990 20,000 -

Accordingly, it has been estimated that there are over 300,000 highly qualified Africans in the Diaspora, 30,000 of which have PhDs. Paradoxically, Africa spends US$4 billion per year (representing 35 % of total official development aid to the continent) to employ about 100,000 western experts as part of technical assistance. For example, 90% of private firms in Gabon are managed by expatriates.

Africa as a whole counts only 20,000 scientists (3.6 percent of the world total) and its share in the world‟s scientific output has fallen from 0.5% to 0.3% as it continues to suffer from the brain drain of scientists, engineers and technologists. Although the situation in Africa in general is quite alarming, the magnitude of the problem has reached quite disturbing proportions in certain African countries, with Ethiopia ranked first in the continent in terms of the rate of loss of human capital, followed by Nigeria and Ghana. Similarly, Ethiopia lost about 74.6% of its human capital from various institutions between

89 1980 and 1991 alone. By the same token, Sethi (2000) noted that about 50% of the Ethiopians who went abroad for training have not returned home for the last 10 to 15 years after completing their studies.

Likewise, there is evidence that there are more Ethiopian-trained doctors in the city of Chicago alone than in Ethiopia. Similarly, Ghana lost 60% of its medical doctors in the 1980s, and between 600 to 700 Ghanaian physicians are currently practicing in the USA alone, a figure that represents 50% of the total population of doctors in Ghana. Likewise, UNDP (1993) indicated that more than 21,000 Nigerian doctors were practicing in the US alone. In 1997 only, more than 1,000 professionals left Zimbabwe. In Zambia, the public sector only retained 50 out of 600 doctors trained in the country‟s medical school from 1978 to 1999.

Though the adverse effects of the “brain drain” are on the overall development of the African continent, its effect on the health sector is particularly alarming. WHO recommends at least 100 nurses per 100,000 of population for the least developed countries; about 17 sub-Saharan countries have only 50 or fewer than 45 nurses per 100,000 population. According to the latest available data, which ranges from the 1990s to 2002, 13 sub-Saharan countries have five or fewer physicians per 100,000 populations (UNDP, 2003). For example, Malawi has only 17 nurses per 100,000 people. In contrast, many Western countries have more than 1,000 nurses per 100,000 people (Meeus and Sander, 2003).

The main causes of the “brain drain” can be categorized as “push” and “pull” factors. The push factors include: low and eroding wages and salaries, lack of satisfactory working conditions, under-utilization of qualified personnel, inadequacy of research funds, lack of professional equipment and tools, social unrest, political conflicts and wars, lack of freedom, etc. Similarly, the pull factors include:

higher wages and income in the industrial nations, better job and career opportunities and professional development, substantial funds for research, political stability, and intellectual freedom.

While it is acknowledged that remittances from skilled migrants can contribute to boosting household welfare, it doesn‟t however, compensate and make up for the social costs and adverse effects on African economies as a result of the brain drain. Thus, what can be done to reverse the current brain drain in Africa? Strategies used in the past to reverse the brain drain include the retention and the return of skilled migrants to their countries of origin. However, many African countries have acknowledged that such efforts didn‟t work well. Instead, the new approach called “virtual participation” appears to be encouraging highly skilled expatriates to contribute their experience to the development of their country without necessarily physically relocating from their current place.

It was in the light of this consideration that the African Union (AU) adopted a resolution urging member states to develop strategies for utilizing the scientific and technological know-how and skills of the African Diaspora for the development of the continent. In fact, the AU considered the African Diaspora as the sixth region of Africa, after North, South, East, West and Central Africa. In a similar development, the New Partnership for Africa‟s Development (NEPAD) calls for the establishment of a reliable, continental database to determine the magnitude of the problem of the brain drain and promote

90 collaboration between Africans abroad and those at home. An important NEPAD priority is to develop Africa‟s human resources and reverse the brain drain. Therefore, African governments have to create the necessary political, social and economic conditions that would serve as incentives to curb the brain drain and ultimately to speed-up human capital formation as a driving force for sustainable and rapid economic growth.