Developments in Africa

Stephen DeAngelis

September 19, 2008

When discussing development, Africa is almost always in the conversation. So much of the poverty, disease, conflict and bad governance in the world is found on that continent that most people turn a deaf ear to the drumbeat of bad news coming out of countries there. Although the situation in Dafur occasionally makes front page news, most of us don’t know what is happening there from day-to-day. We know that the rising price of staples has exacerbated the food crisis in Africa, but we only occasionally hear about unfolding tragedies in places like the Horn of Africa [“Africa’s Hungry Horn,” by Stephanie McCrummen, Washington Post, 2 July 2008]. McCrummen reports:

“By the end of the year, U.N. officials predict, nearly half of [Somalia’s] population, or about 3.5 million people, will need food aid, a dramatic spike driven by rampant political insecurity, skyrocketing global food prices, the devaluation of the local currency and a failure of nature’s mercy, rain. Those factors are also in play just across the border in Ethiopia, and aid groups are warning that large swaths of the Horn of Africa are hovering at the threshold of famine. The signs are coming from all directions, especially near Somalia’s capital, Mogadishu, where fighting between the Ethiopian-backed transitional government and Islamist insurgents has been heaviest. Along one road leading out of the city, more than 300,000 people have been living for more than a year under tarps and trees and with little access to food, and the situation is reaching a crisis point, according to the aid group Doctors Without Borders. In recent months, aid workers have seen a 400 percent rise in the number of young children slipping through the stages of malnutrition: first becoming listless and withdrawn, their arms and legs growing thinner, their skin peeling off as it dies, and finally their bodies swelling, a condition caused by severe protein deficiency. … Aid groups in both countries are overwhelmed. The political insecurity in Somalia has rendered it the worst humanitarian disaster in Africa, judging by the scale of unmet need. And with roads menaced by militias, a thriving business of aid worker kidnappings, piracy on the seas and an often-uncooperative government, little international relief is in sight.”

Relief agencies like Christian Children’s Fund remind us through their requests for donations that children in Africa are at risk; but we rarely hear about the disproportionate effect that the food crisis is having on women [“Africa’s Last and Least,” by Kevin Sullivan, Washington Post, 20 July 2008]. Sullivan reports on the consequences of the food crisis on the westerly side of the African continent in Burkina Faso.

“In poor nations, such as Burkina Faso in the heart of West Africa, mealtime conspires against women. They grow the food, fetch the water, shop at the market and cook the meals. But when it comes time to eat, men and children eat first, and women eat last and least. Soaring prices for food and fuel have pushed more than 130 million poor people across vast swaths of Africa, Asia and Latin America deeper into poverty in the past year, according to the U.N. World Food Program (WFP). But while millions of men and children are also hungrier, women are often the hungriest and skinniest. Aid workers say malnutrition among women is emerging as a hidden consequence of the food crisis. ‘It’s a cultural thing,’ said Herve Kone, director of a group that promotes development, social justice and human rights in Burkina Faso. ‘When the kids are hungry, they go to their mother, not their father. And when there is less food, women are the first to eat less.’ A recent study by the aid group Catholic Relief Services found that many people in Burkina Faso are now spending 75 percent or more of their income on food, leaving little for other basic needs such as medical care, school fees and clothes. Pregnant women and young mothers are forgoing medical care. More women are turning to prostitution to pay for food. And more families are pulling children — especially girls — out of school.”

The measure of a great society is how it treats its poor, its children, its women, its aged, and its disabled. These are also measures of good governance. It’s difficult, however (and unfair), to talk about greatness in societies that are struggling to survive. You can’t apply resources against challenges if resources don’t exist. The good news is that there are signs of change beginning to emerge. Last November, the New York Times’ staff published an editorial on the subject [“Africa’s Chance,” 2 November 2007]. They concluded:

“Rising prices of raw materials are helping the region achieve its best economic performance since independence. This vitality has fragile foundations. Africa’s past commodity booms turned to busts, which means Africans must carefully manage their resources. … Growth in sub-Saharan Africa is expected to exceed five percent this year, which would be its fifth year in a row of doing so. That’s because of the surging price of oil — a boon for Nigeria and Angola — and rising demand for metals like copper and aluminum that benefit nonoil exporters. Africa has gained substantially from debt reduction. That has freed resources for public investment and underpinned a surge of private foreign investment. Resource-hungry China has quickly become the region’s second-largest trading partner after the United States — and an important investor. There is a dark side to China’s role — providing financing and political support to despots like Zimbabwe’s Robert Mugabe or Sudan’s Omar Hassan al-Bashir — but it is becoming an important engine for the region’s economy.”

The editorial also admitted that enormous challenges remain to be faced.

“Africa is still dirt poor — with an average annual income per capita of merely $600 and 300 million people living in poverty. Every year, nearly a million children die of malaria and more than two million die before they are a month old. The region is also still locked in the vulnerable role as a supplier of basic commodities. That means its growth will falter if, say, China’s economy cools and its demand for raw materials wanes. Over the long term, Africa must move its way up the chain of commodity exports and into the worldwide networks of manufacturing that account for a growing share of global trade.”

As I’ve noted in a couple of recent posts, high oil prices are likely to keep Africa from moving up the chain of commodity exports because supply lines are shortening due to transportation costs. Regionalization is emerging within globalization. That means that the best hope for sustainable African development involves a strategy that develops a stronger regional economy in Africa that is better able to connect to the larger global economy. As the editorial notes, that won’t be easy.

“The immediate challenge requires investment to deal with historic bottlenecks: dismal health, poor education and derelict infrastructure, notably in transportation and power generation. And it must invest in bringing new technology to agriculture, an essential step to combat entrenched poverty in rural areas. Western aid will be crucial for making progress in all these areas. Nobody can know for certain whether Africa south of the Sahara might be on the cusp of shaking its endemic destitution and starting up the ladder of development. But it has its best chance in decades, and it would be a crime not to tr
y to grasp this opportunity.”

There are indications in some parts of Africa that a sustainable middle class may be emerging [“In Africa, a New Middle-Income Consumerism,” by Stephanie McCrummen, Washington Post, 1 September 2008]. This is good news since a sustainable middle class is essential if a strong regional African economy is to emerge. McCrummen, reporting from Uganda, writes:

“Meet Denis Ruharo, an entrepreneur with a master’s degree, a man who carries a Blackberry and two Nokia cellphones, buys organic greens at a grocery store and sometimes does business over a cold Nile beer at a club called Silk. ‘I have the mortgage and home improvement,’ he said, glancing at the budget he and his wife keep on their computer. ‘The car, carwash and parking tickets. Entertainment — cable TV, two movies a month. The health club. Then normally we vacation twice a year. Last time it was Nairobi.’ ‘What else,’ he said, scrolling down on his Mac PowerBook. ‘Newspapers, charity, clothes, books and CDs . . . ‘ In a region more often associated with grinding poverty, Ruharo is part of a modestly growing segment of sub-Saharan Africa — upwardly mobile, low- to middle-income consumers.”

The definition of low- to middle-income consumers is relative. It’s one reason that most economic analysts look at purchasing power parity (PPP) rather than per capita income. A growing middle class must have enough money to buy products beyond those necessary to sustain life. A sustainable middle class will spend money on luxuries and entertainment as well. McCrummen notes that Africa’s middle class is certainly not rich by Western standards.

“The group includes working Africans who make as little as $200 a month, a paltry sum by Western standards, yet hardly the $1 or so a day in earnings that describe life for about half the continent’s population. Perhaps a third of all Africans, or 300 million people, fall into a middle category — people struggling to put their kids through school and pay rent, but able to buy a cellphone or DVD once in a while. Their buying power is evident around Kampala, a green and hilly city where iron-sheet homes are interspersed with high-rise condos, streets are crowded with bikes and Japanese sedans, and the city’s newest mall, Oasis, is under construction. It will be anchored by what amounts to sub-Saharan Africa’s first Target-style superstore chain, Nakumatt, which sells corn flour, aromatherapy bath salts and nearly everything else. The company is opening two other superstores here, plus two in Rwanda, three in Tanzania and 11 in Kenya, where it began as a trading firm in the 1960s.”

Uganda is not the most stable country in Africa. That is why the emergence of a middle class there is so encouraging. As McCrummen points out, the middle class demonstrates hope in the future by aspiring to have things that a few years ago it couldn’t have dreamed would have been within its reach. Middle class consumers are stakeholders in the future. She goes on to explain who comprises these new middle class consumers.

“Although the continent has always had a modest middle class made up mostly of government workers or others tied to the ruling elite, the middle ranks have begun to expand in recent years with private sector employees. They include secretaries, computer gurus, merchants and others who by virtue of education, geography or luck have benefited from economic growth of around 6 percent annually in such countries as Uganda, Ghana and Kenya, and around 8 percent in Rwanda. Increasingly, they are entrepreneurs such as Ruharo, who represents the wealthier end of the spectrum and whose company is an offshoot of the newly booming cellphone industry. Though critics say the trickledown effect is meager, others credit leaders of those countries with adopting relatively sound economic policies that have allowed the private sector to expand, driving what analysts say is the highest level of consumer demand the continent has ever seen.”

As middle class Africans demand more variety in products and services, they will change the entire economic framework in those regions. They will also reflect the realization that globalization is finally lapping on the shores of the Dark Continent.

“The growth of consumer culture reflects something more significant than the availability of Chilean wines and red patent leather pumps from Paris. It reflects a gradual opening up of African economies, a freer flow of information and a parallel rise in expectations, some political. During Kenya’s recent post-election crisis, for instance, many observers say people in this middle group, who were steadily losing money, helped to pressure the country’s warring political leaders into a compromise. Middle-income Africans are spawning the advent of new services, such as fertility treatments and funeral homes. And their habits are changing how people define themselves. For example, although older Ugandans were forced to see themselves in terms of ethnicity during the brutal reign of Idi Amin, Ruharo’s identity has more to do with where he shops and what he buys, which in turn reflects the wider world he greets each day on the Internet and cable TV or on occasional trips to London.”

McCrummen’s implication is profound. If true, the growth of middle class consumerism could finally begin to make inroads into the tribalism that has created so many problems in the past and which still plagues most areas. Tribal and ethnic identity will never disappear (we still see their impact in developed of countries), but they can become sources of strength and pride rather than sources of conflict. McCrummen reports that changes in government policies have contributed to Uganda’s economic growth. As in many developing countries, however, the price of economic growth is often autocratic government. The good news is that political change almost inevitably follows economic change.

“Although President Yoweri Museveni has been criticized for treading the path to dictatorship — he’s been in power more than 20 years and has imprisoned political enemies — he has been praised for policies that have fueled a steady economic upswing since the 1990s. Extreme poverty in Uganda, defined as those who earn less than $1 a day, has been cut in half to about 30 percent. Vijay Mahajan, a business professor at the University of Texas in Austin, recently coined the phrase ‘Africa 2s’ to describe people who are neither desperately poor (Africa 3s) nor obnoxiously rich (Africa 1s), and says the middle group is one of the most important drivers of economic growth in Africa. … Kenyan economist James Shikwati suggested that middle-income consumers are also a driving force for political change. ‘It’s empowering,’ he said. ‘If you give people a sense of freedom in the economic sector, then you deny it in the political sector, you have a problem.'”

The news out of Africa continues to be mixed. That is not surprising for a continent that is so large and diversified. Too often we simply lump everything “African” into a single pigeonhole and yet would never imagine comparing California to North Dakota. Africa remains a continent blessed with natural resources but cursed with bad governments. As the New York Times’ editorial staff concluded, Africa “has its best chance in decades, and it would be a crime not to try to grasp this opportunity.” While the developed world can help African nations keep a grasp on opportunities, Africans themselves must first grab the future that lies before them.