Aspiring Africa

Courtesy of The Economist, a report on Africa’s economic development:

CELEBRATIONS are in order on the poorest continent. Never in the half-century since it won independence from the colonial powers has Africa been in such good shape. Its economy is flourishing. Most countries are at peace. Ever fewer children bear arms and record numbers go to school. Mobile phones are as ubiquitous as they are in India and, in the worst-affected countries, HIV infections have fallen by up to three-quarters. Life expectancy rose by a tenth in the past decade and foreign direct investment has tripled. Consumer spending will almost double in the next ten years; the number of countries with average incomes above $1,000 per person a year will grow from less than half of Africa’s 55 states to three-quarters.

Africans deserve the credit. Western aid agencies, Chinese mining companies and UN peacekeepers have done their bit, but the continent’s main saviours are its own people. They are embracing modern technology, voting in ever more elections and pressing their leaders to do better. A sense of hope abounds. Africans rightly take pride in conferences packed with Western bankers keen to invest in their capital markets (see article). Within the next few months MasterCard will have issued South Africans with 10m debit cards. Even the continent’s politicians are doing a bit better, especially in economic management and striking peace deals. Average GDP growth is humming along, at about 6%. Governance is improving: our correspondent visited 23 countries to research this week’s special report and was not once asked for a bribe—inconceivable only ten years ago.

This is a welcome transformation, but it is still incomplete. The danger is that Africa settles for today’s pace of change. Only if Africans raise their ambitions still further will they reach their full potential. They need to take on the difficult jobs of building infrastructure, rooting out corruption and clearing the tangle of government regulation that is still holding them back. And they should hurry.

Don’t dawdle

One reason is that so much more remains to be done. Poverty may have become less visible in Africa’s capitals but it remains widespread. The battle against hunger has not been won. The spread of wealth is uneven and winners from today’s boom all too often rush to fortify their gilded positions inside guarded compounds. The financiers who suggest that Africa could soon rival Asia have let their imaginations run riot. Whereas one is the workshop of the world, the other almost exclusively exports what grows in fields or is dug out from below them.

About a third of Africa’s GDP growth comes from commodities. This will not last. Today’s prices are near record highs and commodity markets have a habit of collapsing. Furthermore, recent gains in agricultural commodities may be undermined by climate change. Even now, savannahs are drying out, water tables are dropping and rains either failing or becoming more irregular. One in five Africans will be directly affected by 2020. Even as their continent prospers, many of them will continue to depend on agriculture and there is little they can do about the threats to the world’s environment.

Another reason to push ahead is that Africa’s hard-won victories are vulnerable to relapses. Kenya is a model for other countries in east Africa but the campaign for elections on March 4th has been marred by violence (see article). New scourges—like Islamist extremism in the Sahara—could yet sow instability.

And Africa must make the most of two transitions it is now going through. The move from the countryside to cities offers the chance of a one-off boost to productivity both on the farm and in the slums. If African states bungle this, they will create a dangerous unemployed urban class. At the same time, though Africa’s population is still growing rapidly—it will double to 2 billion by 2050—families there are becoming smaller. This promises a “demographic dividend”, as the number of workers relative to children and the elderly increases. The continent must make use of this bulge of labour, and the savings it produces, for development. If they squander it, Africans will grow old before they grow rich.

Break down your borders

Africa’s citizens are already striving to become more productive. Farmers have started using hand-held gadgets to gain access to weather reports. Slums too are teeming with technology. The internet is changing the way the continent does business. In Kenya a third of GDP flows through a mobile money-transfer system set up by a private telecoms company.

But Africa’s entrepreneurs are often stymied by the state. The bottom third countries in the World Bank’s ease-of-business ranking are almost all in Africa. Their people could easily have better lives; abundant capital and technology offer big opportunities. The infrastructure is improving—only 5% of the 15,800 miles travelled for our special report was on unpaved roads—but the power grid is a disaster. On the whole, government officials should focus less on building things than getting out of the way. Useless regulations have created bottlenecks. East Africa’s main port in Mombasa is gummed up and land borders across the continent hold back lorries for days. Restrictions on employing migrants and on land ownership prevent businesses from expanding. Bureaucrats and customs officers inflate the cost of getting anything done. Shipping a car from China to Tanzania costs $4,000, but getting it from there to nearby Uganda can cost another $5,000.

If aspiring Africa wants a new dream, it should be creating a common market from the Med to the Cape. That would be a boon to trade, enterprise and manufacturing: it would also get rid of much of the petty corruption and save lives. A recent World Bank report pointed out that Africa could produce enough food to feed itself; alas, too few subsistence farmers get a chance to sell their produce (and usually get less than 20% of the market price). Why not rekindle pan-Africanism by opening borders drawn in London and Paris? Africa needs a reborn liberation movement—except this time the aim is to free Africans from civil servants rather than colonial masters.

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