Top
Millennium Post

Continental Renaissance

After decades of Afro-pessimism Africa is experiencing a renaissance. But is it really justified and are we being as naively optimistic today as we were excessively pessimistic yesterday? After all, more than 40 per cent of Africans still live below the poverty line, many of their governments remain among the most corrupt in the world, and most deadly wars are fought on the ‘dark continent’.

There are two basic reasons to be realistically optimistic: First, most African countries are in a much better economic position today than it was at the turn of the century when many wrote it off. Second, recent gains are only the first manifestations of profound, long-term transitions, which have the potential to accelerate Africa’s development. Since 2000, GDP growth rates have averaged and often exceeded five per cent per year and this is not limited to a subset of – poorly governed – resource-rich states.  Coastal (Senegal, Mozambique) and land-locked (Burkina Faso) countries; commodity exporters (Zambia, Nigeria) and importers (Ethiopia, Rwanda); low-income (Uganda) and middle income economies (Mauritius, Botswana) have all experienced high levels of growth.

All projections show that Africa’s growth momentum will continue. If sub-Saharan Africa was a single country, it would already be considered Middle Income at a per capita income of about $1,600. Today, there are already 22 middle-income countries in sub-Saharan Africa and by 2025, there could be 35. The data may well be undershooting reality because African economies, even more than other emerging markets, are largely informal and therefore hard to measure accurately. Ghana recently revised its GDP upwards by a whopping 60 per cent!

This strong performance was not due to higher commodity prices alone. Most notably, Africa has achieved profound improvements in political stability and macroeconomic policy. The continent has weathered both the global financial crisis and the turbulent eurozone, while managing to maintain economic growth and macro-stability. By the yardstick of public debt, almost all African countries outperform the eurozone: a twist of fate from the turn of the century, when most of Africa countries were strapped with unsustainable debt.

Moreover, economic growth has translated into significant human development outcomes. Poverty rates are falling fast and key social indicators are improving even more rapidly. Africa will be the new demographic powerhouse of the world. Half of the world’s future population growth will be driven by Africa, not because of higher fertility but because of longer life expectancy.  Africa is also experiencing a geographic transition. Most African cities are still small, but growing rapidly. Technology combined with education are reshaping Africa’s development outlook.

In this area, many African countries are similar to India a few years ago. Africa has more phones than adults because telecommunication is affordable for almost everyone. Thanks to cell-phones – which have morphed into multi-purpose devices – Africans can more easily participate in social and political life, especially if they reside in a remote village. The social benefits of mobile connectivity are compounded by an expansion in education. Primary education is no longer a luxury. Policies have not improved universally which also explains why Africa is not yet experiencing an industrial revolution. However, the good news is that African governments don’t need to carry out Herculean tasks of reforming their countries wholesale. In order to attain current growth rates, Africa only needed to get a few things right, in particular, macroeconomic and political stability.

If African government’s succeed also to ease the business environment and improve infrastructure, which would in turn make ‘economic borders’ between countries thinner, Africa can emulate India’s, and China’s, growth success.

The author is lead economist at the World Bank, Nairobi
Next Story
Share it