Africa: Too Big To Fail
As we are meeting in Italy, we should perhaps recall the words of the Roman philosopher Pliny the Elder who observed that “There’s always something new coming out of Africa”. And I am not referring to the tragic refugee situation, although let me praise those European leaders, like Chancellor Angela Merkel or Prime Minister Stefan Löfven, who have been brave enough to put principles above politics.
Germany and Sweden alone are taking in the bulk of the asylum seekers entering Europe. According to Eurostat, these two countries recorded 48% of the EU’s asylum applications in the first six months of 2015. The Italian people too have manifested solidarity and humanity towards the desperate refugees who have reached their shores.
Africa is actually finally “rising”. Over the past fifteen years, the continent as a whole has chalked up more than 5% growth per annum . This has reduced absolute poverty and created a growing middle class. And the Continent’s growth can no longer be explained just by high global demand for its bountiful commodities either, although, of course, the recent slowdown in major emerging markets, China in particular, is worrying. It will be particularly challenging for the many African countries that did not plan for a rainy day.
Nevertheless, what is really noteworthy is that two thirds of Africa’s growth over the last decade actually came from increased domestic demand in thriving sectors such as telecoms, financial services, manufacturing and construction. As a result, today, inflows of private investment dwarf international aid.
They have been encouraged by the efforts of governments across Africa to improve their macro-economic environments. Democracy has spread and modern information and communications technologies have enabled citizens to become more engaged and empowered.
We have seen encouraging progress towards the emancipation of women, and the continent is on track to achieve universal primary education. The spread of HIV/AIDS is in decline, and the number of deaths from tuberculosis and malaria is falling.
So, overall, our continent is moving in the right direction.
But progress remains uneven, and we cannot ignore the many serious challenges still facing Africa. I see six key challenges that will determine Africa’s future place in the world order: demography; inequality; infrastructure; agriculture; integration; and leadership.
First a few words about demography. On current trends, Africa’s population will more than double by 2050 and may even triple by the end of the century. I should emphasise that these projections are based on current rates of fertility and mortality that are likely to change as the continent develops.
This demographic growth should ensure that Africa’s economies continue to be among the most dynamic in the world for decades to come, creating countless opportunities for entrepreneurship. But obviously, this population explosion will also place huge strains on the Continent’s limited capacity to feed, educate and employ its people.
African governments and their international partners should work together to ensure that sustainable and inclusive development take hold. This is the only way to create jobs, particularly for the young. If they can have meaningful lives at home they would have no incentive to look for greener pastures at great risk.
The second and closely related challenge for Africa is poverty, which is exacerbated by inequality. According to the World Bank, six out of 10 most unequal countries in the world are located in Africa . Very little wealth is effectively taxed
This concentration of private wealth in Africa may to some extent explain why the continent’s health and education, the building blocks of development, are in such a poor state. In other words, taxing and redistributing wealth is not just a social justice issue: it is a key development necessity.
The third challenge is Africa’s infrastructure deficit, which is a fundamental impediment to development. Besides the woefully inadequate road and rail networks, energy production in particular, which is the focus of my Africa Progress Panel’s report for 2015, is a huge obstacle to economic growth and social progress.
Over six hundred millions Africans have no access to electricity at all. Energy is mostly provided through wasteful generators, even in the continent’s biggest oil exporter, Nigeria. This drives up costs for businesses, particularly in manufacturing, making many uncompetitive by global standards.
But as the continent develops, it ought not add to the world’s existing stock of CO2. Boosting the use of Africa’s vast renewable energy resources must therefore be at the heart of its energy transformation. Scaling up the supply of clean energy in the region offers a triple dividend – reducing poverty and inequality, promoting economic prosperity and safeguarding the sustainability of our planet.
Fourth, I want to talk about agriculture. Africa imports USD34bn’s worth of food, most of which it could produce itself.
Despite these imports, two hundred and forty million people in sub-Saharan Africa are still chronically short of food. Without action, these numbers will only get worse because of climate change and demographic growth.
Yet Africa’s farmers, most of whom are smallholders, have huge potential for higher productivity. Grain yields are around one half or one third of the world’s average. Through my Foundation’s African Farmers Initiative, I am promoting a partnership between farmers, governments, the private sector, international organisations, foundations, and research institutions aimed at improving productivity and nutrition.
At the same time, I am urging developed countries to remove unfair trade barriers and eliminate harmful agricultural export subsidies. If the right policies are implemented, feeding Africa can become very profitable and employ millions of young Africans – not only on farms but also in food processing and distribution.
Another key challenge for the continent’s future is economic integration. Our continent has too many small countries with even smaller economies, some landlocked, which makes it hard for them to thrive individually.
So we need to create economies of scale through regional trade and infrastructure agreements and projects. According to the UN’s Economic Commission for Africa, the continent could gain over USD300bn within a decade if it implemented a Continental Free Trade Area.
And regional integration is not only an economic issue: if Africa is to exercise influence in international affairs commensurate with its size and population, it will need more regional coherence.
While all the factors I have just mentioned are critical, the single most important factor that will continue to determine Africa’s trajectory is the quality of leadership and governance. I am afraid Nelson Mandela’s example of selfless and principled leadership has not been widely emulated by his peers.
The continent has had too many leaders who have traded in identity politics and hung on to power long after their mandates expired. Part of the problem is that leaders on the continent have too often been able to insulate themselves from the judgement of their people.
Elections, which have become almost universal in Africa, have not always met the test of legitimacy, creating, as a consequence, tension and violence instead of preventing it.
Electoral integrity is a major preoccupation of my Foundation and not only in Africa. We are working with political parties and civil society groups in a number of countries to ensure that elections become peaceful mechanisms for adjudicating political competition and change.
One of the consequences of bad leadership has been rampant corruption. The AU estimates that Africa as a whole loses about USD 148bn to corruption annually, i.e. about a quarter of its GDP. Naturally, it takes two to tango and it is undeniable that foreign firms are complicit in this haemorrhage, particularly in extractive industries, as the Africa Progress Panel has documented.
Ladies and Gentlemen, as you have heard, the challenges are enormous. But so too are the opportunities. I am pleased to say that I sense a new spirit of optimism in Africa that I have not felt since I was a young man at independence. Africa is making progress and gradually overcoming the heavy legacies of slavery, colonialism and its own post-colonial mistakes.
So let me conclude by again citing Pliny the Elder who remarked that: “Hope is the pillar that holds up the world. Hope is the dream of a waking man”.