Africa currently accounts for 17% of the global population, the highest growth rate in the world and a level of urbanisation of over 40% going on to 50%. On the other hand, it accounts for only 2% of global trade, 3% of global GDP, 2% of global manufacturing and less than 2% of global direct foreign investment, mainly in the natural resource sector and an average GDP growth rate of less of less than 5% which is projected to turn negative with the global COVID-19 pandemic
The data is clear. Africa is increasingly being left behind by the rest of the world in virtually all aspects except poverty and despair.
“The reality is not good”
To be clear, I am not an African optimist or pessimist. I am an African realist with a full appreciation of the challenges and opportunities that Africa faces having run a group with a presence in 36 African countries and having travelled to or visited 50 African countries.
The reality is not good.
With very few exceptions, core infrastructure such as railways, roads and maritime transportation have been allowed to deteriorate and left dilapidated. Worst of all, power, so critical to industrialisation, employment and development has been allowed to collapse. Eskom, the South African power utility supplier which was considered one of the leading power companies in the world barely 30 years ago, is now a poor relic of its old self.
READ MORE Eskom woes cast long shadow for South African mining
A similar story is repeated in country after country and in sector after sector. Africa has been deindustrialising since political independence in the 60s.
READ MORE DRC today: 60 years of independence and uncertainty
This trend has been exacerbated by the fragmented nature of African economies. Many of the countries are very small and struggle on their own to be viable, whereas as part of a larger economic grouping, they have a chance.
On a positive note, the Africa Continental Free Trade Area (AfCFTA) and the Africa passport are such welcomed and exciting developments. However, Africa needs to actually implement these protocols and go even further to declare regional currency convertibility across Africa.
A need for more trust
It is a great shame that today one can travel more easily across Africa with a European passport than with an African passport. Furthermore, one can transact business more easily with Europe and the West than with fellow African countries. These observations suggest that Africans do not in effect trust each other and these are issues which Africa has to fix.
READ MORE Dangote revels in his AU passport; good for him, but what about us?
For too long, Africa has looked outward to foreign investors and investments as critical to their economic development. So, we see African leaders attending all summits, China-Africa Summit, Europe-Africa Summit, US-Africa Summit, signing all kinds of agreements, and borrowing vast sums of money, but the continent remains underdeveloped relative to the rest of the world.
Increasingly, politicians exploit tribal differences to stay in power, never mind the state of the economy
The fact is foreign investment and foreign investors do not in themselves develop a country; they can only help. Only a country with a strong development mindset and policies that are fully aligned to achieve this objective can develop. That is why countries such as Japan, Switzerland and the UAE, which all have very limited resources but have a developmental mindset that can achieve transformational development: their leaders have been fully committed to developing their countries, not just paying lip service
How to catch up?
The Real challenge for Africa is how do we begin to catch up to the rest of the world? Whilst the ACFTA and the Africa passport are positive steps in setting the stage for a more attractive continental market, the most important step is to change our mindset on development.
READ MORE Coronavirus in Africa: opportunity to reshape development
Given the population growth rate in Africa of 2.7%, we must not be satisfied with single digit growth. We must set our target on double digit growth and policies must accordingly reflect this priority.
When this is done, the need to invest heavily in power and infrastructure becomes self-evident. While the Asian economies have grown, seeing China and India joining Japan on the list of the top 5 economies in the world, Nigeria, the biggest economy in Africa, is only 27th.
Good initiatives, but not for developing a country
Africa has seen a lot of emphasis on microfinance, digital technology, impact investing, etc. in recent times. While these are all good initiatives and should be encouraged, none of them can help develop a country in the absence of power, good infrastructure and industrialisation, including the industrialisation and commercialisation of agriculture.
Some forward looking African countries have started looking inward for solutions to their developmental problems as they realise that the greatest developments in Africa have come from investments and commitments by leading African business persons who believe in the continent despite the challenges.
In many African countries you are defined by where your parents come from, not where you live, however long you have lived there.
So, Dangote Group led by Aliko Dangote, has completely transformed the cement industry in Africa by investing massively in countries across Africa. MTN has helped Africa leapfrog the telecommunications divide through its investments in mobile telephony across Africa.
READ MORE Border closures will not stop Dangote expansion
Ecobank pioneered pan African banking when global banks were hesitant to invest in Africa. Shoprite has done the same in the retail sector across Africa. These are homegrown multinationals that have positively and significantly affected the development of Africa; it is noteworthy that they have achieved this despite the lack of support of their host countries.
“These are self-inflicted wounds”
It is easy to point to the disruptions from civil and ethnic conflicts in Africa to seek to explain away the lack of development. But these are self-inflicted wounds exacerbated by lack of economic progress and accentuated by self-imposed ethnic policies.
Therefore, in many African countries you are defined by where your parents come from, not where you live, however long you have lived there. Economic decisions are made in a sub-optimal manner to reflect tribal or ethnic interests rather than the common good.
Appointments are made not on merit but on ethnic representation with catastrophic impact on the institutions affected. Increasingly, politicians exploit tribal differences to stay in power, never mind the state of the economy. The few countries that are held up as exceptions in fact confirm the rule. 8% growth rate is considered very good when China grew double digits for 30 years to begin to catch up with the West. The unspoken view is that as economic laggards, any sign of growth in Africa is a source of joy and hope.
If and when Africa works, the oft thrown “insult” of “go back to your country” will be significantly reduced for all black people. Caucasians, Asians and Japanese are rarely asked to go back to their countries because their home countries and continents are respected because they are deemed developed.
The ongoing Cold War between China and the US is a source of concern.
Africa needs to maintain a non-aligned position. We should not take sides but take the best from both sides and act in the best interest of Africa. The West has done a lot for Africa and they will continue to do so because it is also in their interest.
China has its faults but is playing an increasingly important role in financing the growth of Africa. It is sometimes argued that China is burdening Africa with debt which they know Africa cannot repay. But Chinese debts are typically project based so even if they take over the management of the projects in the event of non-payment, the projects remain in Africa, employing Africans and benefitting African economies. The same cannot often be said for a lot of western debt that ends up in Swiss and other bank accounts abroad.
READ MORE US-China tension creates opportunities Africa must seize
And to be clear, China neither enslaved Africans nor colonised Africa and it did not impose structural adjustment programmes that decimated African economies. Africa could learn from China’s work ethic and determination that has propelled it to the second largest economy in the world in 30 years.
If and when Africa works, the often thrown “insult” of “go back to your country” will be significantly reduced for all black people. Caucasians, Asians and Japanese are rarely asked to go back to their countries because their home countries and continents are respected because they are deemed developed.
Western perceptions of Africa
The Western perception of Africa is worsened by the media portrayals of Mediterranean tragedies of Africans trying to get across to Europe and the recent riots and racism in the US despite different reasons and antecedents.
READ MORE George Floyd: Malcolm X’s visionary speech in Africa
NGOs also raise funds by showing photos of African babies with runny noses and starving mothers in pathetic environments, and miss out the counterbalancing narrative about Africa, even if these are currently few and far between, thus reinforcing the negative Western mindset of Africa as the hopeless continent.
Ultimately the development of Africa is up to Africans. But for this to happen, a psychological shift from the current mindset of dependency and learned helplessness to one of getting things done is required.
Africa has what it needs to succeed, without help
The natural resources are there. The human resources are available. But the political and developmental will to get things done is missing and needs to be developed. Africa should not settle for perennial underdevelopment, forever putting out a begging bowl to multilateral, bilateral and governmental agencies for aid and help.
The will lies within us to develop Africa and catch up with the rest of the world. That must be the challenge of Africa going forward. Unless and until Africa wakes up to addressing its developmental challenges, it will continue its decline in global relevance.
The regional institutions have a critical role to play. Institutions such as the Africa Development Bank and increasingly Afreximbank should continue on with their emphasis on key developmental initiatives, place less emphasis on national projects and should increasingly focus on major continental projects such as railway systems, maritime systems, major regional power projects such as the Inga Dam, major renewable energy projects such as the Sahara Desert solar farms.
“Corruption is a dumb choice”
I will end with a word on corruption.
Corruption is a matter of choice and exists to a greater or lesser extent in all countries. Corruption is a dumb choice as it results in decisions that hold back the economy and the amount of corruption has to increase to make up for the shrinkage in the economy. Africa, on the whole, tends to practise dumb corruption.
This article is not meant to be a pessimistic and down beat commentary on Africa.
Progress has been made in many areas but this could be done faster and better. The issue is not how much progress we are making but how much progress we are making relative to the rest of the world.
To be fair, Africa is not a country. So, generalisations do not always hoId true across the board. However, as one geographical entity trying to catch up with the rest of the world, we have a very long way to go. We can start by realising that it is up to us as Africans to develop our continent by pooling our resources and working together to create a bigger and more attractive market, and focus on power generation and industrialising the continent.
We do not have to do too many things. We only have to do a few important things right, and understand that until and unless we achieve industrialisation and significant comparative economic growth, Africa and Africans will become marginalised and irrelevant.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.