The Economist this week characterizes Africa as aspiring, rising and hopeful. Africa’s
lion economies are on the prowl.
The average decline in infant
mortality in Africa is now faster than what was achieved in China in the early
1980s. In the US State of Mississippi infant mortality declined by 17.5%, from
11.4 deaths to 9.4 deaths per 1,000 in last decade. Over the same period,
Senegal cut infant mortality rate by 38%, from 121 to 72.
Progress in education is heartening. In
Burundi, Uganda, Tanzania and Rwanda, the Gross Enrollment Ratio in secondary
school has increased from less than 10% to nearly 35% between 2000 and 2010. Similarly,
University enrollment among the East African Community member states grew by
98-365% between 1999 and 2005. According to McKinsey Global Institute, Africa
is set to reap the demographic dividend, adding 122 million people to the
workforce between 2010 and 2020. By 2035, Africa’s labour force will top 500
million, surpassing China or India.
According to the 2011 growth estimates by
the International Monetary Fund, seven African countries were among the world’s
10 fastest growing economies, each with annual growth rates greater than 6.5%. Trade
between Africa and the rest of the world has increased by 200% since 2000. The United Nations Conference on Trade and Development (UNCTAD) estimates
that Foreign Direct Investment (FDI) in Africa increased to $46 billion in
2012, up from $15 billion in 2002.
I hate to rain on Africa’s parade. But
I think Africa’s growth could run out of steam if the fundamentals for
sustainable economic growth and social stability are not put in place. Here are
some issues Africa’s politicians and technocrats must grapple with.
About 300 million Africans earn $700
annually and a majority of them are employed
in subsistence agriculture and informal self-employment. Incomes from such
sources are inherently unstable and livelihoods vulnerable. Natural resource
sectors (gas, oil, mining) will contributions significantly to national revenue
but will not create huge numbers of well paying stable jobs by 2035 for 500
million people. Without well stable incomes, 500 million discontented people are
a formidable powder keg for social and political instability.
We can and must learn from other
emerging economies. Experience from Brazil, India and China show that job
creation strategies must remove barriers to growth along industry value chains
and provide infrastructure, financing and human capital for priority sectors to
thrive. With the right policy and business environment incentives, African governments
can spur growth in globally competitive labor-intensive sectors, which can
create thousands of stable jobs.
Holding
elections in countries where democracy is weakly institutionalized have
disastrous social and economic consequences. During
the 1990s, electoral conflicts represented an average of 7.6% of all conflicts,
while in the 2000s that number increased to 10.1%. Kenya tops the league table
of the most violent elections between 1990 and 2010. More than 1,100 people were
killed and 600,000 were displaced. Elections and the economy are tightly
coupled. For instance, following the mayhem of Kenya’s 2007 elections growth
dropped from 7.1% to 1.6% in 2008.
But Africa deserves
credit; today, nearly all of Africa’s 1 billion people now vote in regular
national elections. Regular elections, however flawed are a luxury that 1.5
billion Asians, with all their economic power, cannot afford. What must engage
us is why the simple act of casting a ballot would trigger an evil orgy of
death and plunder.
Weak human capacity is at the core of state incapability
and institutional failure among African countries. Liberia’s civil service
would take hundreds of years to reach the capability of a country like
Singapore and decades to catch up with a moderate capability country like
India. A 2011 audit revealed that less than 10 % of
Kenya’s civil servants have tertiary education. Similarly, in 1998, less than
3% of the national public administration staff of Mozambique had received
higher education. In their essay “Africa’s Growth Tragedy: Policies and Ethnic
Divisions”, William Easterly and Ross Levin suggested that ethnic cronyism in
public service explains a significant part of most of the factors that contribute
to state incapacity and institutional dysfunction that stymie Africa’s
socio-economic and political progress.
Africa’s current growth is built on
quicksand. No amount of plaudits by The Economist can substitute for
Africa’s lack of capability. Africa will persist in an eternal trap of
potential, aspiration and hopefulness as long as her human resources remain week,
undermining the efficacy of public and private institutions.
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