Africa

November 25, 2013

We Must See Africa Differently

Africa is no longer a collection of failed states beset by regional conflict. A fast growing middle class working white-collar jobs in smart office blocks are changing the continents skyline and the socio-economic reality on the ground. Perceptions of Africa famously dubbed the Dark Continent by explorer and journalist Henry Stanley needs to adjust and the global north needs to reset their relationship with a continent that is now in ascendency.

The long awaited often-mocked African Renaissance outlined by Thabo Mbeki is finally here and the evidence is compelling. The International Monetary Fund commissioned a report that showed that real non oil sector related growth in Sub-Saharan Africa had averaged 5.4% over the past 5 years and had risen every year since the year 2000. 13 years of continuous growth in the face of a series of economic shocks and flat lining economies. President Obama and leaders across Europe would love to head into the 2014 election cycle with growth half as good.

Between 2000 and 2010 half of the fastest growing economies in the world were in sub-Saharan Africa, Angola even outpaced China. We need to see Africa differently. There are a broad range of explanations to explain this leap forward in Africa’s fortunes. For me the most interesting is technological advancement which has been crucial to these successes. The explosion of mobile phone usage allows for better communication which is essential for a continent that is still beset with extremely poor transport infrastructure. Moreover, the growth in mobile phone usage has been key to a burgeoning mobile banking sector and is fundamental to small businesses that rely on electronic payments and microcredit.

International Political Forum

Mobile phones are enabling African countries to leapfrog generations of communications technology as they spread rapidly. Image credit: futureatlas.com

Sustained and lasting peace, improved governance after successful transfers of power, improving intra-African trade, and the belated emergence of regional stock exchanges which are luring business away from London and New York are all beginning to pay dividends for a continent whose time seems to have finally come. The cumulative effect is extremely encouraging in that they provide the robust foundation that is needed to sustain what William Easterly called the ‘Elusive quest for growth’ in his book of the same name.

Africa’s middle class underscores the huge potential that comes with a growing market for western goods and services but also in the continued maturity of populations that are increasingly educated to degree level and subsequently are far more economically and politically astute. Least we forget that both India and China progressed down this same road not so long ago. For example, a major driver of British non-EU exports is the emergence of the Indian and Chinese middle class and their expanding disposable incomes. The change in their respective societies was met with the growth of dozens of new cities, which were quickly connected to new railways and airports providing short and medium term infrastructure jobs and long-term jobs in the service sector afterwards.  We should be in no doubt that Africa is now treading that same pathway.

African cities are growing at a phenomenal rate as is the middle class who populates them. There is a real opportunity here for European economies to be at the forefront of doing business in these new emerging markets.  What does this mean for Africa in the long-term? Europe has a unique window of opportunity and perhaps a time restricted one to help create private sector led development. Be in no doubt that if Europeans dither they’ll lose out to the Chinese, Indians and Brazilians

I accept that there still remains a real and urgent need for continued bilateral and multilateral aid to alleviate the most desperate situations in Africa but policy makers ought to refocus on using aid more strategically to create the right economic conditions for growth in countries that have the potential to be long-term trading partners. That is to say development policy must retain its ethical dimensions whilst becoming more economical. We are in a globalised marketplace and we must ensure that those countries that we do business with place a premium on supporting business particularly SMEs run by women. Sustained economic growth is what reduces poverty and development aid should be used to oil those wheels.

For example the Department for International Development (DfID) match-funded Vodafone’s initial investment in M-PESA mobile banking service, which now has 17 million customers in Kenya with a third of Kenyan GDP expected to pass through the organisation. Similarly in Ethiopia DfID supported investment in the Climate Facility for Africa, which upgraded the Ethiopian Commodity Exchange by introducing risk management instruments facilitating trade and increasing access to online  opportunities, we need to expand these sorts of initiatives at a European level.

Africa is a growing market and European investment can help create a sustainable environment that can secure our own medium and longer-term  interests. That sentiment was summed up earlier this year in a joint letter to the Financial Times by 28 CEOs from the worlds leading companies:

 

European leaders would do well to remember that.

 

 



About the Author

Robert Scott
Robbie Scott is an International Development analyst who specialises in corporate and social responsibility. He read Politics and International Relations at Loughborough University before completing his MA in Global Development at the University of Leeds. He has a special interest in political marketing and is a keen animator whose work has featured on CNN and the Guardian online.




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