Africa Must Stop Rising and Start Standing

Amidst a whirlwind of optimism about Africa’s economic rise, this year’s World Economic Forum Annual Meeting concluded on the 24^th of January. Some of the world’s foremost economists, politicians, and policy stakeholders deliberated upon, and to an extent charted a path forward for, the global economy.

Even before the conference, African development policy expert Caroline Kende-Robb envisioned, on the whole, a watershed year for the African continent at global governance platforms: “Africa is poised to receive the global attention it deserves at top-level international meetings,” she asserts in an article titled 10 reasons to watch Africa in 2015. Addressing the Forum’s Pre Annual Meeting, founder and Executive Chairman Klaus Schwab echoed the positive sentiment more generally, citing 2015 as the year that could see unprecedented solidarity and cooperation worldwide.

Of course, their optimism is tempered by some cautionary caveats: Kende-Robb is quick to remind us that an ever-evolving economic environment such as Africa’s may present unanticipated risks, while Schwab points out that the inspirational solidarity displayed in the Paris march was preceded by what was nothing short of a “terrorist act” at the Charlie Hebdo offices. Humanity’s capacity to unite, in other words, was elicited by humanity’s often fatal bent towards destruction.

Nonetheless, theirs is a message of good news. For Kende-Robb in particular, 2015 will signal the zenith of Africa’s metamorphosis from peripheral charity case to a major growth hub.

My contention is that, unless two issues are acknowledged and attended to, we may find ourselves punting 2016 as Africa’s big year, then 2017, and so on. An ageing story about a continent on the rise and, secondly, development policy that seems to lag behind the pervasive imperative of growth are two factors that African policy makers were hopefully cognisant of as they gathered in Davos.

The narrative of a continent poised to be and do great is no new thing. It is in fact quite justifiable in light of Africa’s impressive growth rates in recent years, with top-performing Sub-Saharan economies such as Mozambique expanding by an annual average of above 7% over the past two decades. Thus the ‘Africa Rising’ refrains spread throughout the 90s into the new millennium like wildfire, so that even the IMF’s high-level conference convened in Maputo last year was given the same thematic title.

Evidence of those heralding the rise and rise of Africa abounds. South African mobile banking pioneer Hannes Van Rensburg boldly declared in a 2012 article for Forbes that the continent is rising ‘fast’. Later that year TIME, among the most widely circulated weekly magazines, titled its December issue Africa Rising. Even then, this had been in agreement with rival publication The Economist, whose December 2011 edition had had exactly the same title emblazoned across its cover.

The power of the narrative is demonstrated in that, just 11 years before that, The Economist had in no uncertain terms dismissed Africa as “the hopeless continent”- again on the cover.

Yet a growth-centred discourse of Africa’s fortunes is problematic. Although ‘challenges’ are invariably referred to, the disproportionate focus on GDP- the most common measure of economic output- together with Foreign Direct Investment figures ignore the many other ingredients for a healthy economy. Indeed substantial inflows of FDI go a long way in job creation, but that picture is incomplete unless you include, for example, the African Development Bank’s 2013 finding that the region has lost up to $1.4 trillion in “illicit financial outflows” between 1980 and 2009. Obadias Ndaba of the Huffington Post puts that figure in perspective, indicating that it is more than triple the foreign aid income received in the same period.

It stands to reason that a celebration of what goes into the pot must be sobered up by knowledge of what leaks out.

Moreover, a healthy economy must not only retain national wealth, but it must subsequently allow for the distribution of that wealth so that its constituents’ welfare is provided for. One of the most effective ways this can be done at the level of governance is to ensure that the right policy frameworks are in place. To be sure, development policy- especially in developing regions- must have as a guiding objective the conversion of national wealth into measurable development indicators.

Thus development-led policy should be the second factor borne in mind in Davos, especially by African policymakers. If Kende-Robb is correct about unprecedented receptiveness to the African agenda ‘at top-level international meetings’, then the WEF 2015 presented some notable opportunities: the continent’s representatives could have, for example, explored reforms to monetary policy at the ‘New Growth Context’ session scheduled for Wednesday 21 January.

They could have also considered ways of utilizing technological advances to help bridge the wealth divide in the ‘Inclusive Growth in the Digital Age’ meeting on the same day, or perhaps leverage Japan’s extensive investments (think Mitsubishi, Nissan, Honda) throughout Africa to secure even more infrastructure development funding when delegates coalesced for the ‘New Context for Japan’ session on Thursday the 22^nd. Of course, these are overly simplified suggestions, and for all I know, even bigger strides were taken.

Yet what exactly is ‘development-led policy?’ Some may find this distinction to be redundant because in theory, even a growth-led paradigm should in the end benefit the man on the street. Such an assumption, however, is fallacious. IMF chief Christine Lagarde, in her keynote at the 2014 ‘Africa Rising’ conference, put it charmingly: “(T)he tide of growth has not lifted all boats,” she observed. “Poverty remains stuck at unacceptably high levels.”  

A perusal of the United Nations’ Human Development Index (HDI) bears witness to this wealth-welfare divide. The index takes into account education, income, and health as indicators of ‘welfare’. In the 2013 Human Development Report, South Africa scored an HDI rank of 127^th out of 187, despite being categorized as a ‘Middle-Income’ economy. In simple terms this means that the country’s wealth is not being converted into proportionally improved welfare for its citizens. The same can be said for Nigeria, Namibia, and many others.

In 2015, then, the continent’s leadership need to firstly engage with itself and the world well beyond the ‘it’s our time’ mode, and secondly, seek to utilize its growing (pun intended) stature to highlight the urgent need for effective development policy. Such a policy framework seeks to appropriate growth-generated wealth towards the welfare of all African citizens. It does not, inversely, exploit its human capital for exclusively vertical growth.

Failure to do this will, I suspect, see the latest gust of Afro-elation amount to no more than feel-good rhetoric. Africa must therefore stop perennially ‘rising’ and stand on the solid ground of economies that serve their people.

Every whirlwind must, after all, die down.

Moyo holds an Honours degree in International Relations from Wits.