The structures of Africa's economies remain unaltered.
May 1, 2008
With Responses From
The structures of the African economy remain unaltered.
In1997 the Africa Economic Research Consortium—a network of professional economists, headquartered in Nairobi, but ramifying throughout Africa—launched a study of the continent’s economic performance in the post-independence period. In 2007, it published the two-volume product of this effort, The Political Economy of Economic Growth in Africa, 1960 -2000. Among its many findings is one highly relevant here: An understanding of the economics of Africa requires an understanding of its politics. I participated in the project, and as it was coming to an end, I asked myself: Were we now to address Africa in the period since the year 2000, would we find it much changed? The answer was a resounding “Yes!” In his essay, Edward Miguel highlights several reasons why.
Since the mid-1990s, the economies of Africa have grown, and all who experienced the misery of the collapses of the 1970s will rejoice at this. Peace has returned in Liberia, Rwanda, and Sierra Leone; all will celebrate this change as well. Governments in Africa now periodically contest elections. As Miguel suggests, for the first time in decades, Africa appears to enjoy the prospects of prosperity, peace, and good governance.
But Miguel overlooks some reasons for Africa’s new prosperity. And I am more skeptical than he concerning the stability of Africa’s politics and the quality of its governance.
Miguel rightly notes the impact of economic growth in India and China on Africa’s economies. He fails, however, to stress three other factors.
One is the re-integration of South Africa—and its economy—into the African continent. With the fall of apartheid came a surge of private capital northward as South African firms invested in commerce, brewing, mining, and banking elsewhere in Africa.
Africa’s emigrants have also contributed to the growth of its economies. The collapse of Africa’s economies in the 1970s and 1980s led to the flight of citizens abroad. The subsequent flow of funds from these expatriates now contributes to the continent’s prosperity. Visitors to Ghana, for example, soon learn that the construction in newer suburbs of Accra has, to a great degree, been financed by Ghanaians abroad. Remittances rank as the country’s second largest source of foreign earnings, less than the gains from gold exports, but greater than those from coco.
I would also draw attention to a third economic change: the movement of the petroleum frontier from the Middle East to West Africa. Africa’s established oil regimes—Gabon, Angola, Cameroon, and Nigeria—have been joined by the smaller states that dot its western coastline. The United States already imports one-quarter of its petroleum from the region. As more of the West African oil fields come into production, this fraction will rise. Increasing exports of oil yield major increases in export earnings for the economies of Africa.
While significant economically, each of these changes is fraught with other subtle but important implications. Reflect on the rise of India and China, for example. Viewed in historical perspective, imperialism in Africa endured but a moment. For eons, East Africa looked eastward toward the Indian Ocean rather than northward toward Europe. Might not the re-entry of Asia on the African scene represent a return to a “natural” configuration, in which Kenya, Tanzania, or Mozambique turn first to India and China and only then to London or Paris when negotiating their futures? Reflect, too, on the emergence of Africa’s oil economies. Where oil appears, there arrive the armed forces of the industrial states. In response to the increase in oil production in West Africa, the United States is now extending its military reach to the region. Both the growth of Asia and the increase in petroleum exports have sparked the renewal of economic growth in Africa. But they also limn a new geopolitical order.
As we consider the myriad effects of increasing African ties to Asia, it is vital to remember that economic improvement in Africa can be fleeting. That the major portion of Africa’s wealth is lodged within such fragile political entities as Nigeria and South Africa does not bode well for the future welfare of the continent. Half the wealth of Africa accrues to those two states. The last national elections in Nigeria were stolen and the current president continues to rule only because the courts allow him to, fearing the chaos that a new election would bring. The prospect of next year’s elections in South Africa threatens to split the governing party, sewing the politics of South Africa with discord. Côte d’Ivoire and Kenya were once regarded as examples of successful development in Africa. The one now stands divided, with different zones occupied by different political forces, and the other is teetering on civil war. All underscore the fragility of peace and prosperity in Africa.
As Miguel notes, peace has returned to some of the most violent portions of Africa. But conflict still characterizes much of East and Central Africa and it has broken out afresh in the Sahelian zones. Miguel also points out that the majority of governments in Africa are chosen in competitive elections. But, as events in Nigeria reveal, incumbents have learned how elections can be managed; party competition does not imply political accountability. The tragic consequences of Kenya’s last election provide further evidence that, when faced with the threat of loss of office, incumbents are willing to turn from peaceful competition to political violence.
So, yes, things have changed. However, I would characterize the change as one of magnitude rather than character. There is economic growth, but much of it derives from primary products. The structures of Africa’s economies remain unaltered. Several of the most intense conflicts have ended, but others continue and new ones threaten to break out. Political competition has replaced authoritarian governments, but governments have learned to rig elections so as to retain power. While I join Miguel in celebrating the progress that is being made, my joy is more tempered.
While we have you...
...we need your help. You might have noticed the absence of paywalls at Boston Review. We are committed to staying free for all our readers. Now we are going one step further to become completely ad-free. This means you will always be able to read us without roadblocks or barriers to entry. It also means that we count on you, our readers, for support. If you like what you read here, help us keep it free for everyone by making a donation. No amount is too small. You will be helping us cultivate a public sphere that honors pluralism of thought for a diverse and discerning public.