‘The continent as a whole heading for tough period’
By Jeffrey Gettleman
NAIROBI— FOR decades Africa was eager for a new narrative, and in recent years it got a snappy one.
The Economist published a cover story titled “Africa Rising.” A Texas business school professor published a book called “Africa Rising.” And in 2011, The Wall Street Journal ran a series of articles about economic growth on the continent, and guess what that series was called?
The rise seemed obvious: You could simply stroll around Nairobi, Kenya’s capital, or many other African capitals, and behold new shopping malls, new hotels, new solar-powered streetlights, sometimes even new Domino’s pizzerias, all buoyed by what appeared to be high economic growth rates sweeping the continent.
For so long Africa had been associated with despair and doom, and now the quality of life for many Africans was improving. Hundreds of thousands of Rwandans were getting clean water for the first time. In Kenya, enrollment in public universities more than doubled from 2007 to 2012. In many countries, life expectancy was increasing, infant mortality decreasing.
But in recent months, as turmoil has spread across the continent, and the red-hot economic growth has cooled, this optimistic narrative has taken a hit. Some analysts are now questioning how profound the growth actually was.
“Nothing has changed on the governance front, nothing has changed structurally,” said Grieve Chelwa, a Zambian economist who is a postdoctoral fellow at Harvard.
“Africa rising was really good for some crackpot dictators,” he added. “But in some ways, it was a myth.”
No place exposes the cracks in the “Africa rising” narrative better than Ethiopia, which had been one of the fastest risers.
Ethiopia is now in flames. Hundreds have been killed during protests that have convulsed the country.
The government, whose stranglehold on the country is so complete that not a single opposition politician sits in the 547-seat Parliament, recently took the drastic step of imposing a state of emergency.
Many of the Ethiopia’s new engines of growth — sugar factories, textile mills, foreign-owned flower farms — now lie in ashes, burned down in an anti-government rage.
At the same time, a report by the McKinsey Global Institute, an arm of the consulting firm McKinsey & Company, just listed Ethiopia as the fastest growing economy on the continent from 2010 to 2015. The Democratic Republic of Congo, which is also rapidly sliding toward chaos — again, was second.
Political turmoil on the one hand, rosy economic prospects on the other. Can both be true?
“It comes down to how sustained the turmoil is,” said Acha Leke, a senior partner at McKinsey.
In Ethiopia’s case, the unrest appears to be just beginning. Videos show demonstrations of hundreds of thousands of Ethiopians chanting anti-government slogans, giving a sense of the depth of discontent. The protesters hail from Ethiopia’s two largest ethnic groups, a population of more than 60 million, leading many analysts to predict that this is no passing fad. It seems the continent as a whole is heading into a tough period. Nigeria, Africa’s most populous country, faces its gravest economic crisis in years because of low oil prices. At the same time, it is trying to fight off Boko Haram, one of the most bloodthirsty insurgent groups on the planet.
South Africa, the continent’s most developed nation, has been racked by waves of unrest. Troops with assault rifles stomp around college campuses, trying to quell student protests. The country’s currency, the rand, hovers near a record low.
South Sudan, which topped The Economist’s list in 2013 of the world’s fastest-growing economies, is now a killing field, the site of one of Africa’s worst civil wars.
Leke, one of the authors of the McKinsey report, says that political turbulence can drag down any economy, and that the growth of recent years has not been shared among the people nearly as widely as it could have been. According to a recent report by the African Development Bank, unemployment in sub-Saharan Africa remains close to 50 percent and is a “threat to social cohesion.”
As Leke said, “You can’t eat growth.” Still, he says, there have been fundamental — and positive — changes on the continent, like increases in disposable income for many African consumers.
Chelwa, the Zambian economist, has a different view. The fundamentals of African economies have not changed nearly as much as the “Africa rising” narrative implied, he said, with Africa still relying too heavily on the export of raw materials and not enough on industry.
“In Zambia, we import pencils,” he said.
He also points out that some of the fastest-growing economies, like Ethiopia, Angola and Rwanda, are among the most repressive. These governments can move ahead with big infrastructure projects that help drive growth, but at the same time, they leave out many people, creating dangerous resentments.
In Ethiopia, that resentment seems to be growing by the day.
The trouble started last year when members of Ethiopia’s largest ethnic group, the Oromo, began protesting government land policies. Soon Ethiopia’s second largest ethnic group, the Amhara, joined in, and the protests have now hardened into calls to overthrow the government, which is led by a small ethnic minority.
If you track the news coming out of Ethiopia, you would not be a fool to think it is two totally different countries. One day, there is a triumphant picture of a new electric train, with Chinese conductors standing next to shiny carriages. (China remains a huge investor in Ethiopia.)
The next, there are grisly images of dead bodies that witnesses said were people gunned down by the police.
Several witnesses said the security forces might be beginning to split, with some officers taking off their uniforms and joining the protests.
The most recent economic data shows Africa’s growth slowing because of political instability and a global slump in commodity prices. Morten Jerven, a Norwegian economic historian who has studied statistics from across Africa, argues that the growth was never as robust as had been believed.
He said that the economic indicators for many African economies in the 1990s and early 2000s were inaccurate, and that the economic progress in the last five to 10 years that appeared to have been sudden was, in fact, gradual.
In other cases, Jerven said, African governments made bold economic assumptions or simply used fake numbers to make themselves look good. “The narrative had been too rosy,” he said.
Africa Yearning or Africa Struggling might be a more apt characterization, but neither of these is especially new. Whatever narrative emerges should include what Chelwa calls the continent’s “ghastly inequality,” and the sharp increase in the number of people who are now better equipped with technology and information and are demanding more from their governments.
Of course, it is difficult to apply a sweeping narrative to all 54 countries in Africa, where analysts agree that the picture is mixed. For instance, Rwanda remains stable with new businesses and floods of tourists while its neighbour Burundi teeters on the edge of chaos.
Some of the same economic factors that investors cite as grounds for optimism, like Africa’s growing cities, cut both ways.
According to Jerven, rapid urbanisation in Africa often leads to sprawling slums, low wages and legions of disenfranchised youth.
“All the economic variables for turmoil are there,” he said. – New York Times