Excellent post in Britain’s Guardian Newspaper. The writer Peter Guest criticizes patronizing opinion editorials and ‘Africa rising’ headlines which ignore the continent’s recent positive history.
Many pundits are using the World Cup in South Africa as a platform to try to “sell” the rest of the continent to investors. It is incredibly encouraging to finally see some positive messaging around the event after weeks of tabloids whipping up a sense of foreboding over the security situation.
Leveraging the tournament to try to redress a huge imbalance between perceptions of the continent and the reality on the ground is a fine idea. However, that we need to do so is a tragedy in itself. The patronising opinion editorials and “Africa rising” headlines only serve to demonstrate that the overwhelming majority of journalists and analysts still base their sentiments on barely remembered history lessons and preconceptions influenced by Hollywood films that borrow more from Conrad than from contemporary events.
Despite every advance, many see the entirety of Africa as one big mess, whereas in truth there have been for nearly a decade some very bright spots from an investment standpoint. “Buying into Africa” does not mean buying Sudanese or Somali sovereign risk.
The crises in 2008-09 demonstrated that some places, such as Zambia and Botswana, were admirably well managed economies and, despite being commodity-centric, weathered the downturn. There were some wobbles in places like Ghana, which made a stellar performance in 2008, struggled a bit in 2009, but is very much back in the game now and has oil coming on stream towards the end of 2010. While “old Africa hands” see this as the likely precursor to that old, corrosive oil curse, the country’s improving governance and levels of political inclusion suggest that if anywhere can avoid such a fate, it is Ghana.
The oil price environment is a bit uncertain but an optimist would say it is only upward trending, which bodes well for places like Angola – which should have growth in double figures this year after being flat last year because of the collapse in oil demand.
Brazilian, Indian and European producers are also starting to tap into non-oil resources in the biofuels sector. While this is fraught with controversy, it serves to demonstrate the enormous latent potential in African agriculture for food and fuel. Acquisitions of large areas of African farmland – happening in equal measure in eastern Europe and Latin America – are rightly scrutinised, but the upside in agriculture is not only about available acreage.
Unlike in Asia, increases in farm production in Africa have, by and large, been down to increases in the amount of land under cultivation. Access to modern farming techniques and technology could – and should – catalyse a vast increase in output on existing plots, economically empowering smaller farmers and producing more than enough to feed the continent and its partners.
The China in Africa narrative is important, but it is not everything. Opinion editorials in several of the major broadsheets have called China’s investments part of a “new scramble for Africa”. This term is patronising. China’s, India’s, or for that matter France’s or the UK’s relationships with Africa are no longer exclusive and African governments are increasingly equal partners in their dealings with the rest of the world. The cold war ended, but unfortunately our geopolitical ideas are still stuck in the 1980s.
Even so, interest from industrialising powers does underline how structurally important Africa’s 53 countries are to the global economy in the future, not just because of the resources under its soil – more than what is left in the entire OECD, if recent estimates are to be believed – but because of the soil itself.
Beyond this, however, Africa has another great resource – its people. There is a school of thought – borne out by the numbers, in my opinion – that Africa’s current growth phase predates the resource price boom, and the resilience of the continent during the demand slippage that we saw over the past couple of years bears that out. Demographic and political trends are driving growth – populations are growing and buying high volumes of low-cost goods and services, particularly telecoms – as evidenced by the $9bn (£6bn) buyout of Zain Africa by the Indian telco Bharti Airtel last week. Populations are urbanising, bringing them closer to services and making them “better” consumers, and the middle class is expanding enormously.
Across the continent there is an upward trend in peace and security – despite the persistent hotspots that we see in the news – and an improvement in economic and social governance. If you look at the World Bank’s Doing Business report, you’ll see that many countries are still putting in place pro-business reforms. Last year Rwanda was the top reformer in the world. These factors all contribute to growth and to investors’ returns – most of these countries are now easy to get cash into and out of legitimately.
This is significant. We still maintain a poor opinion of those investing in Africa. The perception that they undermine democracy and fuel corruption is retrograde. Done properly, investment creates employment, employment leads to taxes and, unpopular as they are to us, taxes create a fiscal link between populations and governments.
Patronising suggestions that the World Cup could somehow “turn Africa around” do little more than create short-term interest in a long-term story. Yes, we should be taking a fresh look at Africa, but not because a football tournament puts it on the precipice of success. We should be reassessing Africa because it is a long way along its trajectory of growth and development and our ignorance has prevented us from seizing its opportunities.