The rise of Africa

Ian Boyne, Condtributor

Yesterday was no ordinary Africa Liberation Day. It marked the 50th anniversary of the founding of the Organization of African Unity (OAU) in Addis Ababa, Ethiopia, and there over this weekend a number of presidents and prime ministers, including our own Portia Simpson Miller, have gathered for a major summit and celebration.

Africa sceptics who sneeringly ask, "What do they have to celebrate?" have not been told the secret: the African Renaissance is no romantic myth, no wishful thinking, but a concrete reality. The country that had the fastest growth rate last year - a whopping 35 per cent - was African, Sierra Leone. Between 2000 and 2010, six of the 10 fastest-growing countries in the world were African.

And the International Monetary Fund (IMF) a few weeks ago just issued its World Economic Outlook on sub-Saharan Africa which noted, "Sub-Saharan Africa has performed strongly and should continue to do so. Output grew an average of 5.1% in 2012 and is projected to accelerate to 5.4% in 2013 and 5.7% in 2014." This is the same Africa which was written off as a basket case years ago and which the Economist magazine dubbed 'The Hopeless Continent' a decade ago.

Inflation has dropped to 7.9% and is trending down. Poverty has been falling, and between 2000 and 2008, secondary-school enrolment has increased by more than 50 per cent. Government debt has slid from approximately 80% of GDP a decade ago to approximately 40% today. Foreign direct investment has moved from less than US$10 billion in 2000 to US$80 billion today.

Consumer expenditure is expected to leap from the US$600 billion figure in 2000 to $1 trillion by 2020. The World Bank's recent annual Country Policy and Institutional Assessment says the region's macroeconomic performance is now on par with other developing countries. Some project that Africa will overtake Asia in economic performance by 2040, or even before. Suddenly, a lot of respectable voices have become bullish over Africa.

CAPITAL BOOM

Africa, which has always suffered from severe capital shortage and underinvestment, is now receiving more foreign private capital than foreign aid - some $50 billion annually. But is this growth sustainable? The chief economist of the World Bank's Africa region says in a co-authored article in the May/June issue of Foreign Affairs: "Sub-Saharan Africa's recent history of political change and reform leading to growth justifies a positive outlook."

This does not mean Africa does not have serious challenges. There is still far too little diversification of Africa's economy. Yes, it is true that as many as 20 states which do not produce oil still managed to grow by an average 4% between 1998 and 2008, but as the Foreign Affairs article points out, the manufacturing sector in sub-Saharan Africa accounts for "the same small share of overall GDP it did in the 1970s".

Africa is vastly underdeveloped in terms of infrastructure. This hobbles intra-Africa trade, as well as trade with other nations. (Intra-Africa trade is just 15%, compared with 50% in Asia). Analysts have estimated that African infrastructure improvements would unleash approximately US$850 billion in trade opportunities.

This is why the initiative of the African Development Bank (ADB) to encourage African states to devote part of their reserves to establishing a US$22-billion infrastructure guarantee facility is such an important one. It would strengthen African independence, rather than depend as heavily as it does today on Chinese and other external investments.

CHINA CONCERNS

Africa also still has to confront its governance, corruption and tribalistic issues. And this is where some of my concern lies with the growing Chinese influence in Africa. While China is lauded in some quarters for not being meddlesome in domestic issues and not disdainful of sovereignty as Western states, particularly America, the fact that that authoritarian state does not embrace liberal democratic ideals means it will not pressure African states to change the repression of its citizens as a condition for financial assistance and investment.

China has blocked efforts at the Security Council to apply sanctions to repressive African states. It has refused to apply pressure to dictatorial states, using the excuse of respect for non-intervention and territorial integrity to mask its self-interest in turning a blind eye of authoritarianism.

So African states can resist American and European pressure to reform their political systems and show respect to their citizens and simply turn to the Chinese, who don't care what you do to your citizens as long as you open up your resources to them. Sure, the West is hypocritical about its values and often disregards them at home, but at least its espousal of those values - however hypocritically - gives some leverage to human-rights and civil-society groups fighting repression.

Indeed, part of the reason for the African Renaissance has been the end of the Cold War, during which African states were played off by the Americans, Soviets and Chinese in their geopolitical chess game, while Africans were repressed and their living standards savaged. Says the Foreign Affairs article on Africa: "Beginning in 1999, potential donors began to require African governments seeking debt relief to also consult with their own citizens - civil-society groups, businesses, community organisations - as they crafted policies to help the poor."

DEBT RELIEF

And this leads us to a key point to which, as a globalist, I must draw attention. This African Renaissance could not have come about without significant debt relief. Forty African countries have received debt relief. This has released a significant amount of resources for development. Says Steven Radelet in his 2010 Center for Global Development book, Emerging Africa: How 17 Countries Are Leading The Way: "Today, 25 years after the onset ... the debt crisis is finally winding down for African countries, debt burdens are significantly lower, freeing up financial resources ... ."

Charles Robertson, author of the book The Fastest Billion: The Story Behind Africa's Economic Revolution, says in a forum published in the May issue of New African: "Ten years ago, governments were having to choose whether to pay back people they owed money to in the West or to spend money on education. As a result of the debt burden halving, they don't have to make that choice anymore. You can actually focus on infrastructure, on improving education, and I think this is a fundamental part of what's gone right." This cannot be overlooked.

In fact, debt relief, the commodity boom, outside diplomatic and donor pressure for reforms and a resource-hungry China are some of the exogenous factors responsible for Africa's boom. But not to be discounted are the democratic reforms, embrace of the market system and macroeconomic reforms. We should not make light of the importance of macroeconomic reforms and the adoption of some neoliberal reforms crucial to growth.

Africa's excessive statism, bureaucratic incompetence, infantile socialism, and ideological fantasy trips have cost the continent heavily in economic growth; not to mention the kleptocracy, venality and corruption of many of its political leaders who were busily enriching themselves while denouncing colonialism and Western imperialism. Respect for so-called 'Western' liberal democratic principles, the rule of law, fiscal prudence and market-driven strategies have played a critical part in the African Renaissance.

IT'S THE MARKET, STUPID!

Again, the end of the Cold War and the death of Marxism have helped to pry African leaders away from utopian fantasies and millenarianism. It's the market, not Marx, that should be embraced. (And, of course, this says nothing about unfettered laissez-faire capitalism).

Speaking at the founding of the Organization of African Unity (now African Union) in Addis Ababa 50 years ago on May 25, Africa's first independent head of state, Kwame Nkrumah, who wanted a United States of Africa, said: "Just as we understood that the shaping of our national destinies required each of us our political independence and bent all our strength to its attainment, so we must recognise that our economic independence resides in our African union and requires the same concentration ... ."

Economic independence will be incalculably more difficult to achieve than political independence. This is the African Union's challenge as it looks to the next 50 years. It must continue its economic and political reforms and not be blindsided into adopting wholesale neoliberal reforms which leave its people out of the fruits of growth. Otherwise, this most youthful of continents will explode, reversing the gains. A luta continua.

Ian Boyne is a veteran journalist. Email feedback to columns@gleanerjm.com and ianboyne1@yahoo.com.