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African futures: Power, People and Money in 2060

Posted on Monday, 23 November 2009 17:30

The battle to contain climate change and make

governments accountable will shape Africa’s prospects as it tries to

maximise the benefits of its population boom and rich natural resources

DEMOGRAPHY AND URBANISATION: ?BOUNCING BABIES AND BIG CITIES?

Three important trends offer a vital guide to ?Africa’s future over the next 50 years: the rates of mortality, birth and urbanisation. All three indicate that Africa is in the midst of a demographic transition of the kind that has already transformed economies and societies in Latin America and Asia.

The central question for Africa is whether it can use the economic advantages of a surge in working-age population as a platform for the modernisation and diversification of its economies. Known as the ‘demographic dividend’, the phenomenon is reckoned by some analysts to have boosted China’s growth rates by a third. India is now halfway through the same sort of transition with its cities and factories braced for a decade of booming growth.

Like a series of railway wagons shunting along a track, mortality rates decline, then birth rates fall, leading to a bulge of young people. Many of these people move from the countryside into towns in search of work in factories and the service sector. That increases production and demand and then prosperity all round, as it did in China and is now doing in India.

The migration from China’s rural hinterland to its coastal cities has been one of the greatest movements of people in history; it has also helped lift 400m people out of poverty. Africans are making the same sort of journeys, and Africa is already the fastest-urbanising continent.

The demographic transition in Africa started some 60 years ago as death rates began to fall markedly while birth rates remained stable. That meant a population boom which peaked in the 1980s, with the population of most countries growing by more than 3% per year.

Since then, fertility rates have gradually fallen. In the 1950s, a woman in Mozambique would have on average six children in her lifetime, now it is five. In countries such as Botswana and Côte d’Ivoire, fertility rates have almost halved but are still high by world standards.Women in East Asia, for example, now have on average 1.6 children.

This year, Africa’s population reached one billion people, according to the UN Population Fund. It forecasts that there will be more than 2bn Africans by 2050, outstripping India’s projected population of 1.6bn and China’s 1.4 bn.

The country-by-country population projections produced by the US Population Reference Bureau suggest that there will be huge social changes in many African countries. These figures are calculated on an average fall in fertility rates in Africa, replicating the falls seen in Asia and Latin America; they suggest that Africa’s population would still be the fastest growing in the world. This means that Africa also has one of the youngest populations. Uganda, with a current median age of 15, is classed by the World Bank as the country housing the world’s largest proportion of young people.

Nigeria’s population, currently an estimated 148m, is set to rise to 282m by 2050; Egypt’s population will grow from 79m to 118m over the same period; Ethiopia’s from 79m to 148m; Uganda’s from 29m to 56m; and South ?Africa’s, like the Maghreb countries, will rise more slowly from 48m to 55m.

Initially, Africa’s population growth – averaging just over 3% in the 1970s and 1980s – outpaced economic growth, which has depressed living standards in many countries. But improvements in economic growth could combine with the surge in ?Africa’s working-age population to produce a rapid ?economic acceleration over the coming decades.

For that to happen, governments have to invest hugely in education and health but also in roads, ports and the telecommunications needed to support an industrial ?export economy. That investment would reinforce the development trend: for example, the growth of internet use is already improving educational and healthcare provision. New technology could help Africa do more with less and learn from the experiences of Asia’s ?hyper-economies.

The alternative, according to demographers and economists, is some sort of apocalyptic vision with young, frustrated, unemployed people, with easy access to weapons, flocking into dysfunctional cities that fail to provide basic services for their citizens. Sadly, it is by no means an ?impossible reality and one that should concentrate the minds of policy-makers across the continent.

POLITICS AND SECURITY?: RESOURCE BATTLES AND DEMOCRATIC DELAYS

There is a broad consensus on the political ?challenges faced by Africa – the demands for accountable and effective governments that can address the demands of growing competition for resources and new pressures on the environment – but far less agreement on the solutions.

And politics is likely to get messier with the growing power of non-state actors, the lobbyists and civic activists who will be putting pressure on governments. Innovations in information and communications technologies mean that governments can better be held to account and quickly compared to their counterparts elsewhere.

In some ways, Africa’s political leaders are further apart as they enter the second decade of the 21st century than they were in the heady final days of the anti-colonial struggle some 50 years ago.

Then, a generation of leaders such as Kwame ?Nkrumah and Abdul Gamel Nasser led calls for political and economic integration of Africa and inspired political movements across the continent, recalls Egypt’s ?Alaa Al Aswany, author of the best-selling novel The ?Yacoubian Building: “These were revolutionary people. These kinds of leaders do not exist any more in Africa, but I still believe in the people. African people everywhere know exactly what they must do to achieve progress for their own countries.”?

Now there seems to be a vacuum of leadership according to Al Aswany, in contrast to the concerted push for Pan-Africanism and economic cooperation in the 1950s and 1960s. After the campaigns for free elections and more accountability in the 1990s, many governments ?reverted to authoritarianism but found ways to repackage it. For him, progress in the coming decades will depend on Africa rekindling the spirit of the anti-colonial movement and of the ‘Second Liberation’ of the 1990s:

“The important task is to achieve a real democracy in Africa. As in medicine, there is always a difference ?between the disease and the complications. I believe the main disease in Africa is dictatorship and you have many complications like poverty or corruption or the ?degradation of human rights.”?

Such faith in democracy is questioned by Jakkie ?Cilliers of South Africa’s Institute for Security Studies: “However desirable democracy may be in its own right, political liberalisation does not ensure economic regeneration or popular welfare. Africans in new democracies do not perceive substantial improvements in their economies and report few advances in their living conditions.”?

Cilliers concedes, however, that research shows that Africans remain committed to the principles of democracy and accountability, even if they are unimpressed by the performance of their elected governments.

There is also broad support among Africans for more continental cooperation, but deep divisions remain over ?demands from African leaders such as Libya’s Colonel ?Muammar Qadhafi and Senegal’s Abdoulaye Wade for the immediate establishment of a united African government. Most leaders in the African Union favour a gradualist strategy. Many draw parallels with the European Union, arguing that it was the establishment of the single market and the dropping of punitive tariffs that gave ?impetus to more political cooperation and some pooling of sovereignty.

Analysts such as the African Development Bank’s (AfDB) Chief Economist Louis Kasakende are convinced that the integration of markets and convergence of policy will strengthen the region’s economies. The AfDB is trying to promote infrastructure projects that will facilitate regional trade: it calculates that abolishing trade tariffs within Africa and building more regional power and communications projects could double the continent’s GDP growth. Integrated and bigger markets would also draw in more investment. The East African Community, with its common passports and tariff structures, may be setting the pace for other regional organisations such as the ?Economic Community of West African States and the Southern African Development Community.

Will there be a “United States of Africa” by 2060? ?After all “Unity Now” was the demand of the independence ?decade, but now there is a more compelling economic logic to cooperate. If the regional organisations’ strategies continue to work, it is likely that much more political cooperation will follow.

There are already examples of strong supra-national political authority in Africa. In October, West African leaders imposed sanctions on Captain Moussa Dadis ?Camara’s junta in Guinea following the massacres in ?Conakry, and on Niger’s President Mahamadou Tandja after his bid to change the constitution and secure a third term. The Africa Peer Review Mechanism, championed by former South African President Thabo Mbeki, brings a level of scrutiny by African governments to each other’s internal affairs that most Asian and European governments would find unacceptable.

Another important political trend over the next 50 years will be in the opposite direction: toward greater devolution and localism. Activists in resource-rich regions such as the Niger Delta, or the diamond-rich Lunda Valley in Angola, and the copper and cobalt mines of Katanga are pushing for more local control and accountability. And central governments are beginning to grant concessions as the pressure mounts. The offer by President Umaru Yar’Adua’s government to grant 10% stakes in the oil fields to the communities of the Niger Delta is an important recognition of local economic rights.

In the Democratic Republic of Congo (DRC), veteran campaigner for economic justice and human rights Hubert Tshiswaka argues that proper accountability and management of resources would meet most local concerns but he does not foresee the break-up of Congo: “I have the hope that in 50 years we will still have the same map or it will grow to have some federation with some other countries. But for any of it to break away, like the Kivus to be a different country from the DRC, no I don’t see that.”?

Tshiswaka is less sanguine about the prospects for stability and ending conflict in the region. Political ?authoritarianism and resource grabs are likely to drive conflicts for years, he predicts. But like Al Aswany, he argues the solution is in the citizens’ hands – to ?campaign for responsible democracy.???

ECONOMIC FORECASTS: ?HYPER-ECONOMIES, BUT TROUBLE FOR THE OILMEN?

Although most analysts reckon that Africa will make its great demographic leap forward over the next 50 years, comfortably overtaking the populations of China and India, the forecasters are far less certain about the prospects for African economies. Notwithstanding recent impressive economic gains in Africa, the IMF and the World Bank project that poverty in Africa will continue to rise for at least the next ten years.

For the last decade, African economic growth has averaged over 5%, second only to the hyper-economies of India and China. So on some projections, if Africa positions itself as leading supplier to Asia’s fast-track economies, it can break through the 7% GDP growth barrier. That is the point at which African economies would see a sustainable cut in unemployment and substantial new investment in education and health programmes.

That is entirely possible, according to Nigeria’s former finance minister and now managing director of the World Bank, Ngozi Okonjo-Iweala: “I believe Africa will flourish, be part of that multi-polar world…there is room for optimism because things have been changing in Africa.”?

The World Bank and the AfDB have drawn up ?scenarios where several African countries such as Ghana, Kenya, Tanzania, Uganda, Côte d’Ivoire and Cameroon join Botswana, South Africa and Tunisia as middle-income countries.

Prospects for Africa’s big resource-rich economies are mixed. Few economists and political scientists are sanguine about the short-term future of the DRC. Activist ?Hubert Tshiswaka says the growing international and local ?demand for more accountability in the mining business is having a positive effect: “All these movements coming from outside will push the government.”?

The story looks different in other resource-rich countries such as Angola, Algeria and, of course, Nigeria. Analysts such as Francis Beddington at Insparo Asset Management argue that “the sheer size of Nigeria’s population plus the profile of its natural resource base of oil and gas, a range of other mineral deposits and the commercial potential of a better-organised agricultural sector, mean it will be one of the world’s 20 leading economies within the next few decades.”?

That confidence in Nigeria’s destiny is shared by bankers at Goldman Sachs who have produced extensive research on economic scenarios over the next 50 years. Having looked at the effects that the BRIC (Brazil, Russia, India, China) countries might have on the global economic order, Goldman analyses prospects for what it calls the Next 11 (N-11). This N-11 group of countries includes ?Nigeria and Egypt in its ranks – alongside Indonesia, Iran, Korea, Mexico, Turkey, Pakistan, Bangladesh, Philippines and Vietnam. Currently the N-11 contribute about 9% to global economic growth, but this could rise markedly ?according to the report.

According to Goldman’s projection of the world economies in 2050 in terms of GDP, the top spot will be taken by China, followed by the US, India, Brazil and Mexico. Nigeria will be the 11th-largest economy with a GDP of $5trn, just behind Germany and Britain. Egypt would be the world’s 20th-biggest economy, just behind Iran and Italy. But in terms of income per capita in 2050, ?Egypt would be the 18th-highest and Nigeria the 20th, according to Goldman Sachs.

Even if these forecasts prove accurate (they are at least partly based on straight-line projections of commodity production and revenues alongside demographic trends), Cilliers of South Africa’s Institute for Security Studies ?argues this may still not add up to sustainable economic development for Nigeria: “Because it is single-commodity dependent, something has got to give at some point in Nigeria. The one thing that really constrains Nigeria’s ?development is its dependence on oil. No country has ever developed – except maybe Norway – on the basis of a single commodity.”

Futurologists at PricewaterhouseCoopers reach similar conclusions to Goldman Sachs about Africa’s economic growth but are more optimistic about South Africa’s potential as a more diversified and technically-developed economy. But they argue for the essential role of demographics in economic forecasting: “Nigeria has the highest projected population growth rate…with its total population set to rise to around 290m by 2050, as compared to around 120m in Egypt and 56m in South Africa.”?

Statistically, the fortunes of African economies are umbilically joined to population growth. Gross domestic product is one of the crudest but most widely-used ?measures of economic growth: it is the number of ?economic transactions in a given geographical area.Bigger populations mean bigger GDPs. But as political scientist Amartya Sen argues, this bears little relation to social welfare in a society, far less to happiness.

Such ideas have led economists to assess the quality of economic growth, as much as the quantity. Most ?analysts accept that Africa has to break its dependence on commodity exports to achieve economic take-off in the next 50 years.

One possibility would be for Africa to take over some of China’s labour-intensive manufacturing: “China is starting to see its labour costs creep up. It’s starting to look where to put low-end (meaning labour-intensive) manufacturing,” ?according to the World Bank’s managing director Ngozi Okonjo-Iweala.

“So Africa can definitely benefit from this by working closely with China – and the World Bank is trying to help this process by having a trilateral kind of relationship agreement whereby we can help the countries put the right infrastructure in place, and then the Chinese can invest and create jobs in these countries.”

With many economic forecasters concluding that ?China will be the biggest economic power globally by 2060, followed perhaps by India, Africa’s ability to ?develop its relationship with them, away from the current model of exporting commodities and importing manufactured goods, could reshape its economic future.

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