There has been much talk about how the African continent is on the move. This narrative was surprisingly enough, popularized by the same commentators who have traditionally looked down on Africa—and normally called it the ‘hopeless continent’. Among those sceptical of Africa include the Economist who carried the headline ‘Africa Rising’ in 2011 to highlight Africa’s economic growth over the last decade.
Apparently not because six of the world’s ten fastest-growing countries were African and also the continent grew faster than the usual top performing countries in East Asia.
Of course the narrative of a growing African continent is an appealing one, not only to potential foreign investments and businesses; but also it is positive news to domestic audiences—Africans who are traditionally accustomed to negative portrayal of their continent. With international media’s amplification of an African economic renaissance, there is no surprise that many voices such as banks (Renaissance Capital), International Monetary Fund (IMF) and others went on record (and continues) to suggest that the continent is on the rise. Some argued that Africa’s high growth rates, increased economic activities and improved business environment indicate that the continent is on the path to a new dawn.
Of course, credit goes to African political and business leaders who have played a role in improving the economic temperature, drumming up support and have continuously called on investors to flock the continent in order to take advantage of the young—but apparently thriving market. With economic growth expected to be slightly higher than in 2013 at around 6 per cent, according to the International Monetary Fund and Africa as a whole already with a collective gross domestic product (GDP) of more than $2,000 billion, it is therefore no coincidence that the world is taking notice.
Given the recent economic growth in countries such as Angola, Chad, Rwanda, Kenya, Nigeria, Tanzania and others; one could see why some people are convinced that Africa is rapidly transforming its socio-economic status.
But is Africa really rising? The reality is the GDP says nothing concrete about the health of an economy, let alone its sustainability and the overall impact on people’s welfare. Hence thinking of standards of living for the majority of Africans, one would argue that it is better to count on the growth per capita as a more suitable tool to measure the rate of economic progress.
In some parts of Africa, there are many challenges including high birth rates, unemployment (or informal and undeclared jobs), income inequality and unequal distribution of wealth all of which raise concerns in relation to overestimated economic forecasts. According to the World Bank (WB), Africa’s population eligible for work (those between 15 and 64) estimated at 42% (460 million out of a total population of 1.1 billion) in 2010, and it is expected to increase to 50% by 2030. The question is whether the continent’s growth, job creation and market can respond to the supposed demographic dividend or this could end up being a demographic disaster.
The consensus is that for any region, let alone Africa to have undisturbed economic progress; there must be undisturbed peace. But Africa faces direct and indirect threats to stability and security hence hindering any chance for the desired economic progress. Think of the poverty and the rates remain staggering, but bizarrely advocates of the ‘Africa on the rise’ will claim that the prevalence of extreme poverty has been decreasing at an impressive rate. To be fair, it has if you look at the change in the share of the population living on less than $1.25 a day in the past decade, and if one looks at poverty reduction programmes in a country such as Rwanda—which has made massive progress and thus becoming an empirical case in the process.
A reason for hope?
One can always be hopeful but the reality is that—Africa has not always done well compared to other regions such as the East Asia. For example, the poverty rate only improved from 72% to 70% between 1981 and 2010 whereas the same region reduced the rate from 92.4% to 29.7% and this is a clear indication that Africa’s share of world poverty could, in fact, have been rising.
In light of too much negativity about Africa since 1980s, it naturally feels as though a mention of the good things happening is overdue. But one ought to be truthful while telling the African story. And yes, some things have definitely changed for the better: Africa’s violent conflicts have somewhat reduced, democratic accountability is improving and the macroeconomic situation is stabilizing; but such advances are insufficient for economic development—and it would be misleading to claim that these minor improvements have eradicated poverty, provided jobs to the jobless and got rid of people’s misery.
To bring this change, African countries must diversify away from agriculture and natural resources into manufacturing and industries that are more technologically advanced.
Familiar policy proposals?
You surely must have heard of similar lines such as trade and investment during the last US-Africa Summit—where African leaders were lectured on how to solve their problems. Africa has historically been taken advantage of and has always had a bad deal from powerful countries and institutions. In truth, the real transformation will require leadership with the ability to steer investments to sectors with productivity potential and one hopes that today’s Africa is different—and won’t fall into the same exploitative economic relations with the new players such as China and alike.
While acknowledging the variety of investments being made in Africa, one should be wary of the conclusion that this is necessarily contributing to the wellbeing of Africa. Can Africa overcome?
Yes, if the African entire leadership puts industrial and technology policies at the forefront of their development programme—instead of wasting time trying to please foreign pundits. In the end, it will take more than statistical illusion to get rid of the continent’s image of inefficiency and corruption.