Africa: progress and risk

Africa’s economic dynamism is echoed in a radical shift of perception about the continent’s prospects. But these realities in turn are creating tough new tests for all involved, says Stephen Ellis.
Stephen Ellis
24 May 2011

There is an enduring view in the global north that Africa's dominant realities and compelling stories concern only famines, wars, and corruption. As recently as 2000, the Economist published a special feature on Africa under the headline “The hopeless continent”. This dismissive title reflected then a deep-rooted sense (and prejudice) among many - elites, publics and media alike - in Europe and the United States. It has far from disappeared.

But a decade and a global financial crisis on, readers of the business press are being presented with a revamped image of Africa: as a new frontier for investment. This rosy view is based on an assessment of improved economic policies in many African countries, closer engagement by China and other emerging powers, and a rise in commodity prices.

The economies of sub-Saharan Africa have emerged from the great financial convulsions of 2007-08 and their legacy better than much of the rest of the world. In a longer-term perspective, Africa has well over half of the world’s unused farmland that will be needed to grow food for burgeoning populations over the decades to come.

A key question is whether this radical shift in perception about Africa’s prospects means that the continent has indeed transformed with quite remarkable speed - or whether there is something going on that doesn’t meet the eye. 

My answer, which I elaborate in my book Season of Rains: Africa in the World (C Hurst, 2011), is that both observations are true at the same time. Many economies in sub-Saharan Africa are growing at rates of over 5% as the continent reaps the benefits of high prices for its oil, copper, iron-ore and other raw materials. The spread of mobile-phones has had a remarkable effect in helping to integrate markets. Some African countries now have financial institutions that are able to handle investments by pension-funds and to issue bonds, and some African banks are now entering into the tricky business of assessing private risk, opening up whole new sections of society to credit.

Yet even in countries with this level of sophistication there are few reasons to suppose that these shifts are leading to the emergence of states that aspire seriously to ensure the welfare of all their people. On the contrary, some dynamic economic performers also have many of the hallmarks of what western observers often call “failed states”.  This is an interesting paradox - failed states that are in some respects strikingly successful.

The development trap

Much of the difficulty that western analysts have in understanding Africa stems from the long tradition of regarding it as a continent stuck in a bygone age. This idea probably has its origin in the mobilisation of British public opinion against the slave trade in the late 18th century. Over two centuries it came to form a significant part of the European and American self-image. Societies that took pride in what they considered their ability to organise themselves through the use of reason contrasted themselves with a continent that was, allegedly, unable to escape from tradition. 

The notion that Africa has to be helped to develop continues even today. It is the motor of a veritable “development industry” that has emerged since the 1940s-1950s and evolved over the subsequent decades, replete with its own vested interests.

If the financial crisis of recent years has had any positive aspects, one is the possibility it offers for glimpsing the 21st-century world that is now emerging. Africa, after a period of the fastest population growth in human history, now has more people than Europe. A vast continent whose political and economic life was always shaped by the abundance of land and the shortage of labour is facing a massive problem of unemployment. 

Africa’s fast-evolving relationships with Asia and the middle east may appear to many people to be new, but they are actually very ancient. East Africa has actually been integrated into an Indian Ocean trading system for two millennia. China and India, meanwhile, are re-establishing the place as leading manufacturers that they enjoyed before the 19th century.

These changes are so big that they will take some time to assimilate. Among the more difficult thing to grasp is the notion that the west can no longer claim to possess the only roadmap for development. In regard to Africa, this means that many institutions and practices that were thought destined to disappear as countries developed may now be seen to have extraordinary staying-power. In this respect, analysts and planners will need to become far more pragmatic than they have been.

In practical terms, it means that anyone doing business of any description in Africa will have to get used to an environment in which a growing middle class exists, but without many of the institutions that westerners regard as standard, such as a state that holds an effective monopoly of violence, national systems of education and healthcare, and reasonably effective law courts. The early signs are that Asian business people, familiar with working in emerging markets in their own continent, are more adept at this than Europeans.

Africans’ own role

All of this adds up to a better opportunity to prosper than Africa has had for the last half century.  But a major question concerns how African politicians, habituated to using external relations as leverage for personal or factional advantage, will make the best use of the new openings. There is a risk that they will simply use the same tactics towards their new Asian partners as they have done towards Europe and America. As a former finance minister of a west African country puts it: “If we go on like this, African resources will be used for Chinese development like they were for European development before”.

Whether or not this transpires will be determined by how a variety of people act. They include African politicians and elites, and African societies more generally.

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