Ascendant East Africa

Via STRATFOR (subscription required), an interesting look at East Africa:

The Greater Indian Ocean is the maritime organizing principle of geopolitics, uniting the entire arc of Islam (including the Red Sea and the Persian Gulf), East Africa, the Indian subcontinent and Southeast Asia. But while economic dynamism has focused more on the Indian subcontinent and Southeast Asia over the past quarter-century, lately the most intriguing success story has been East Africa. So while the situations look dire in Ukraine and Gaza this week, take a moment to look at a part of the world — once deemed hopeless — that is quietly experiencing a regeneration.

From Mozambique northward to the confines of Somalia even, there has been sustained progress and renewed hope. Over the past ten years, annual GDP growth rates have averaged 8 percent in Mozambique, 7 percent in Tanzania, 5 percent in Kenya and 10 percent in Ethiopia. Tens of billions of dollars are in the process of being poured into Mozambique and Tanzania to tap into vast offshore deposits of natural gas intended to feed growing demand in both South and East Asia, at the other end of the Indian Ocean. Meanwhile, hydrocarbon exploration is occurring in northwestern Kenya and off of Kenya’s coast, as well as in the interior reaches of East Africa, particularly in the Great Rift Valley basin stretching through parts of Uganda, the Democratic Republic of the Congo and Tanzania.

East Africa and Neighboring Countries
 Exploring for energy is not the only development in East Africa. A growing middle class with an attendant consumer sector — along with increased economic and political integration — is contributing to significant foreign interest in building road, harbor, rail and power projects that will connect these Indian Ocean countries with Africa’s interior. Such projects will also make these countries a maritime and energy center on which the Indian subcontinent and Asia partly depend.

Even Somalia, long isolated because of its civil war and Islamist insurgency, is no longer quite as cut off from global economic interests as it once was. The radical al Shabaab group is still a guerrilla threat, but it has lost substantially the capability of defeating and replacing the Somali government. A multiyear effort by African Union peacekeepers, with extensive Western security and economic backing, has led to the group’s degradation. And thanks to counterpiracy operations from a host of world navies, Somali piracy is just not the threat it once was. As Somalia slowly and tenuously moves in the direction of stabilization, there is interest from foreign companies in exploring for minerals in the country’s interior and for hydrocarbons off the Somali coast — for the rich offshore natural gas fields of Somalia’s southern neighbors may extend farther north.

Even the eastern Democratic Republic of the Congo — to the west of Kenya, Uganda and Rwanda — may be on the long march to greater stability as peacekeepers from South Africa, Tanzania and Malawi have been making some headway against Rwandan-backed guerrillas there. If this trend continues, there is sure to be more foreign interest in the region’s vast yet underdeveloped mining sector, even as Uganda becomes a hub for a cross-border trade in hydrocarbons and consumer goods for central-east Africa. Rwanda, too, has attracted investment in its agriculture and light manufacturing sectors — the fruit of greater stability there also.

Of course, nearby South Sudan has been going in the opposite direction, toward greater dissolution. The Western-encouraged breakup of Sudan in 2011 has thus far tragically backfired, with tribal animosities inflamed by an internal battle over the hydrocarbon spoils of the new nation in the south. Unity in South Sudan existed only as long as there was a common threat in Khartoum. That threat now absent, distrust has spiraled into a seemingly irreconcilable armed conflict between the once brothers-in-arms.

The overall trend in this vast region is dominated by increasing foreign investment in the pursuit of natural resources, but this level of investment would simply not be possible without greater political and economic stabilization itself. Governments here and elsewhere in Africa are no longer driven by the same statist ideas of the sort that once dominated the continent, especially during the Cold War when socialism was the philosophical avatar of too many African leaders. While little may have changed in terms of who rules over these African states (with often the same political parties in control as during the Cold War), the difference has come in the reward of capital now within reach for the resources over which these governments hold sovereignty. Put another way, the opportunity cost of not developing a country’s resources is a political calculation leaders in East Africa are no longer willing to wager.

Certainly the defeat of the Soviet Union had a positive effect on Africa, albeit delayed and indirect, but it has not been Western liberalism that has succeeded in Africa so much as pragmatism. For it is the institution of the ruling party that affirms political continuity across much of the East Africa region, even as countries in East Africa have achieved consistent and strong economic growth. After all, Ethiopia’s government is by no means a democratic regime; neither is Rwanda’s. Yet Ethiopia has averaged a 10 percent annual growth in GDP and Rwanda 8 percent over the past decade or so. Thus, to say that Western-style democracy has succeeded in Africa is a narrow version of the truth. More truthful is the fact that what is transpiring constitutes Asian-like pragmatism with African characteristics. Further encouraging this is the large-scale presence of the Chinese nearly everywhere in Africa, scouring for minerals, metals and hydrocarbons, and building transportation infrastructure as a consequence. For the Africans, the Chinese are, in part, symbols of economic dynamism without the stern moral lectures about democracy that they get from the West.

Examples of Asian-like pragmatism are in evidence throughout the continent. Banished are political leaders in countries such as Mozambique and Tanzania, willing to oppose the development of vast reaches of their countries — and the economic potential therein — for the sake of internal political control. Others, such as the political leadership of Uganda and Rwanda, will embrace economic liberalism, as long as political freedoms do not challenge the ruler’s interests. East Africa has the edge over regions elsewhere in the continent because of its geographical links to Asia and the Indian subcontinent by way of the Indian Ocean.

The real test will come as the wealth from natural resources continues to accumulate. Will that money be stolen by new elites or will it diffuse throughout societies, so that the result is more modern middle classes that can, in turn, stabilize and expand effective institutions and a culture of civility and human rights? The risk of another descent into rampant corruption and misrule is real, since hydrocarbon and mineral wealth are of the kind whose profits can be concentrated into relatively few hands. The bottom-line question is this: Will the presidency control the hydrocarbons, such as is the case in Angola or Nigeria, or will the institutions of the state and the private sector be empowered to develop and adjudicate the pursuit of Africa’s emerging resources?

One thing is clear: Economic change is so ever-present and vibrant throughout East Africa that the region’s geographical orientation itself may be changing. Rather than be part of a once-lost and anarchic continent, the area from Mozambique north to Ethiopia may be in the process of becoming a critical nodal point of the dynamic Indian Ocean world.

This entry was posted on Wednesday, July 23rd, 2014 at 3:41 am and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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