Tuesday, 21 March 2017

Growth with Apology: The Despondency in the African Rising Narrative

by Fredrick Ajwang

Is Africa really on the rise, or rather was it really rising? A couple of years ago, to be precise in December 2011, The Economist Magazine published an issue based on the idea that Africa was on the rise. From henceforth the narrative of Africa rising became popular in academia and policy circles primed on the impressive growth data from the continent. In a real sense the data was good; Africa had six of ten fastest growing economies in the world then with some like Angola and Ethiopia hitting double digits figures. A 2010 Mckinsey Global Institute report stated that Africa’s average real GDP rose by 4.9% annually from 2000 to 2008 more than twice the pace in 1980s and 90s. With over five years since The Economist publication of the continent on the move, what are the implications of the growth for African populace or was it just a mirage raising the hopes of the African citizens that better times were around the corner?

Through this period, I have frequently shuttled in and out of Africa and the breaks in between have given me the opportunity to analyse the continent from within and from a distance. What is clear is that much is changing in the continent in terms of infrastructure development, the marginal expansion of a small middle class and great accumulation of wealth by a few elites but beyond that not much is changing. Governance mechanisms are still bad in most African countries although some have made positive strides, institutions are being tested over and over again and cracking, elections are being rigged and incumbents are refusing to go while the peace that was previously prevailing in Africa was much more of a taste than the real thing. And then the old issue of extreme poverty is still disturbingly there, much as everyone would wish it goes away. While each African county is following its own growth path, A 2016 World Bank report, with an oxymoron title ‘Poverty in A Rising Africa’ stated that while poverty in Africa may be lower, there are more poor people today in Africa than in 1990, two in five adult Africans are still illiterate and violence is on the rise.

Seemingly alarmed by the lack of progress in Africa, The Economist Magazine penned an article last year in frustration wondering why poverty levels have not fallen in Africa despite the growth, and their conclusion; previously poverty in Africa was so extreme and so the growth occurring was simply pushing most from below the poverty line to just at the poverty line! And therein lays the growth paradox within the Africa rising narrative, where did the growth go? This is a difficult question to answer but a look at the 2010 Mckinsey Global Institute report reveals that a third of Africa’s growth was primed on resource extraction and the other two thirds from service sectors such as wholesale and retail, sectors which traditionally are not associated with job creation. And then there is the issue of infrastructural debt financing that has further pushed most African countries back to 1990s before the Heavily Indebted Poor Countries (HIPC) Initiative by the Word Bank and IMF. A 2015 Bank of Ghana report revealed that the country had crossed the 70% debt threshold; a ratio classified by the World Bank as the mark in which a country crosses into HIPC category.

Therefore a combination of factors such as reliance of resource driven growth, insatiable appetite for debt financing from China and minimal expansion of labour intensive sectors that ultimately is fundamental to poverty reduction has meant that there was/is no real time reduction of extreme poverty in Africa. And thus the question of quality of growth arises. I might argue that quality of growth should be related to who benefits. If the benefit accruing from growth is significantly accrued to a few, in most cases owners of capital, while the majority poor are left at the margins, then the quality of growth can be said to be very low if not negative. After all what is growth if it cannot be related to vertical incremental change towards a positive end for the citizens, such that we can step back and witness expansion of middle class in a certain country related to economic growth. Any horizontal increment then it is not growth but rather an expansion/ballooning of what is already there.

And thus, Africa was not really growing but expanding or in some cases it was merely a revitalization of sectors that had previously collapsed due to previous bad economic management. Therefore the narrative should never have been about Africa Rising, but rather on the Africa growth paradox. Having been in Kenya for the last 7 months I have seen shiny sky scrapers piercing the African sky, new railway lines being constructed and the rise and growth of luxury consumption driven by the mall culture that only a few can afford. At the same time I have seen breakdown in health care services, workers being laid off, citizens dying from famines and importantly traversing the country during fieldwork, I have witnessed extreme poverty. I believe we should never have raised Africans hope of better times ahead for now there is so much despondency in the populace. For in absolute terms, according to the earlier mentioned World Bank report, people are getting poorer in Africa because the population continues to grow with the number of people living in extreme poverty increasing by more than 100 million by 2016. And now alas, we development experts owe Africans an apology for first raising their hopes and then failing to create inclusive growth.

Fredrick Ajwang is a Doctoral student in Development Policy at Open University and his research is focused on the governance of vegetable and fruits export sector in Kenya

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