It is too early to tell if Africa's time has come.
May 1, 2008
With Responses From
It is too early to tell if Africa's time has come.
It is important to explore—as Edward Miguel does—the factors responsible for the contemporary growth in sub-Saharan Africa because we have been here before. In the first decade after independence, sub-Saharan countries recorded reasonable economic growth before a massive three-decades collapse. Understanding today’s growth may help stem the risks of a new downturn in the second decade of the twenty-first century.
I also believe—along with Miguel—that Africa’s recent gains in political freedom have played a role in the latest economic successes. A growing number of countries operate under democratic governance and enjoy the associated press freedoms, scrutiny of public office-holders, and rule of law. Punishment for those caught stealing at the ballot box may have played midwife to economic growth.
And China’s contributions to new growth are not in doubt, as African countries now benefit directly or indirectly from high commodity prices; affordable Chinese imports; growing investment, especially in extractive industries; and, increasingly, development-augmenting aid packages for education and health. However, China’s contributions pose certain challenges, namely, how to sustain growth when primary commodities continue to dominate Africa’s output and income; the inevitable collapse of commodity prices as China engineers itself out of raw material–intensive production systems and into more knowledge–intensive ones; and the risk of so-called easy loans rekindling high debt in the future. How can African policy makers and researchers best avoid these hazards?
Miguel tucks into his discussion of China’s role the important issue of access to U.S., EU, and Japanese markets. This is a crucial matter that requires greater consideration. With the related Economic Partnership Arrangements (EPAs) being actively promoted by the European Union, any discussion of Africa’s economic future warrants a serious look at whether the European Union is friend or foe of today’s African renaissance. The EPAs may present challenges to sustaining the current growth, challenges similar to those posed by the dominance of primary commodities in China- Africa trade. Another issue Miguel neglects is the need for African economies to build manufacturing capacity, and hence take advantage of access to world markets.
On the role of foreign aid, Miguel seems sympathetic to the view that Africa remains poor today despite hundreds of billions of dollars of foreign aid. Skepticism regarding the benefits of aid to countries plagued by corruption is fair, but one wonders if this is the whole story. This view assumes that there are no problems from the donor side. In fact, the donor community itself does not share this rather one-sided view, as evidenced by the spirit of the 2005 Paris Declaration on Aid Effectiveness.
On the issue of conflict costs and contagion, I, for the most part, agree that the impact on growth can be devastating. However, the proposition that if the economic growth of the last seven years continues for another decade or two African economies will be richer and more diversified and thus less at risk of falling into conflict has the feel of mutatis mutandis. Can we take for granted that diversification is in the offing? After all, the sub-Saharan growth process is driven mainly by primary commodities. What will ensure that growth is accompanied by equity, perceived or real? The root cause of conflicts in Africa is perceived or real economic and social inequality. We cannot assume away the challenges of economic diversification and equity. To sustain growth, policy makers must face them, and analysts must propose policies that can help achieve them.
The threat of climate change to the contemporary growth process is real and urgent. But Miguel gives the impression that, in spite of climate change, Africa will remain a primary commodities producer. This explains his almost exclusive attention to adaptation to drought through aid and research into drought-resistant crop varieties suited for the Sahel. With this kind of adaptation strategy, one wonders how African economies can become diversified, and thus less at risk of falling into conflict. I would have expected Miguel to also discuss the kinds of support that African countries would need in order to pursue clean development. African countries must have guaranteed access to green technologies so that, as their economies grow and diversify, they will not repeat the mistakes of advanced countries. Sub-Saharan Africa needs support for creating financial and other institutional structures that will enable it to develop in a climate-friendly way.
It is, indeed, too early to tell if Africa’s time has come, but we must call for necessary action on the part of all stakeholders in African development to learn from recent success and give the continent its best chance to sustain those gains. ©
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