Is Africa's meteoric rise to riches sustainable?
Africa is booming based on commodities sales. But buyers like China are not transferring 'know how.' Without more of a middle class and new Mandela-like leaders, things could go sideways.
A version of this post appeared on Africa and Asia. The views expressed are the author's own.
Sub-Saharan Africa is indeed rising. Thanks to Chinese demand for raw materials, especially petroleum and iron ore, much of Africa is growing (as measured by GDP per capita) at nearly 6 per cent per annum.
Many of the globe’s fastest advancing countries are in Africa.
But is this meteoric economic rise sustainable? Will African economies expand fast enough to deliver jobs, education and health services as their populations surge relentlessly?
If China’s own appetite for metals, minerals, natural gas and petroleum falters, African earnings will inevitably suffer.
African growth is commodity driven. Manufacturing for overseas markets, even in South Africa and Nigeria, is still limited. The export beyond Africa of high valued crops, as in the shipment of Brazilian soy beans to China, is in its infancy.
Tourism, remittances and call centres provide some financial benefit in a few countries, but the recent rise of Africa depends too dramatically on its largely unprocessed raw materials.
China could be transferring skills and technology to its African partners, but mostly it is not. Moreover, on many Chinese construction projects, the managers and many of the unskilled employees are Chinese. Africans are employed and involved only at the margins. Indigenous skills therefore are rarely nurtured, thanks in many cases to special bargains between Chinese enterprises and authoritarian African rulers.
With the great expansion of North American gas and oil supplies, major markets for African energy exports have vanished. That means that Africa’s commodity sales depend more and more on Asia and, occasionally, Europe.
These factors compromise the narrative of Africa rising.
Moreover, Africa’s continued rise must overcome a series of difficult consummate challenges over the next several decades. Most severe is the demographic dilemma.
Sub-Saharan Africa is about to explode numerically.
It's one billion population will double by 2050 and more than triple by the end of the 21st century. Nigeria, with 173 million people now, will swell to 730 million in 85 years, becoming the third-largest state in the world.
India will be the largest nation, China the second-most populous and the United States, the fourth.
After the US, startlingly, will be Tanzania, zooming from today’s 50 million people to 316 million in 2100.
The Democratic Republic of Congo, up from 70 million to 212 million over the same period, becomes the world’s eighth-largest entity.
Even impoverished Malawi, now with about 13 million people, will grow to 130 million by the end of the century.
How will Africa feed, house and secure such an unexpected population explosion?
Africa could have a demographic dividend, based on its massive population growth and the resulting preponderance of working-age adults. But it is not clear where the jobs will come from.
When Southeast Asia benefited in the twentieth century from its demographic dividend, job creation kept pace with population growth and the new – largely – industrial workers became avid consumers. Good governance and good management made this major growth acceleration possible.
At the heart of these important changes in Asia – as now in China – was a critical expansion of educational opportunity and quality. Africa’s continued rise is greatly handicapped by it weak educational outcomes. A few sub-Saharan African countries provide primary education for all eligible children, and many others do well.
But secondary enrollments, especially for girls, are less than robust. Completion rates are only middling. Even in South Africa, only half of those who begin secondary school finish, and of those who finally sit the school-leaving examination (“matriculation”), less than 50 per cent pass and only 12 per cent achieve results that qualify them for university entrance. (South Africa’s GDP is today growing at only 1.6 per cent, after a 1.9 per cent rise in 2013.)
South Africa, Nigeria and Ethiopia have proportionally large numbers of university graduates (not all of whom stay home). But, overall in sub-Saharan Africa, today there are only university places for a mere 6 per cent of those who graduate from secondary school. Skilled employees are consequently scarce and will be for decades. Sub-Saharan Africa will find it hard to enjoy a demographic dividend if proposed high-tech and other modern industries cannot be staffed locally.
Among other challenges threatening the sustainability of Africa’s rise is its widespread energy shortfall. Even major countries such as South Africa and Nigeria lack sufficient electrical power. Spain’s electrical power capacity is the equal of sub-Saharan Africa’s total, although new Chinese-constructed hydroelectric facilities may end power shortages by 2025.
Corruption also hampers growth and detracts from the kind of improved governance that is needed to move Africa forward. Except for Botswana, Rwanda and Mauritius, corruption is everywhere – not least in the petroleum producing polities. South Africa, Angola, Nigeria and Sudan are all wildly corrupt, deterring foreign and even domestic investors.
Since much of Africa is still pre-institutional, effective and responsive political leadership is essential if Africa is to catch up economically and socially with the rest of the world, especially Asia. Better schooling, more and better jobs, new foreign investment, reduced corruption and other essentials depend on improved leadership – on the rise of Mandela-like politicians.
If the middle class in Africa fails to demand or develop such leaders, Africa could easily collapse under the weight of its coming population burden. The demographic dividend could instead become a demographic disaster, with more civil wars, more criminalized cities, more despots and fewer democrats.
Africa’s continued rise is very much at risk. It is too dependent on China, and much too dependent on weak leaders coping with huge population surges, the swelling of cities (all of Canada’s population will soon fit into Lagos and Kinshasa, two of Africa’s mega-metropolises), shortages of water and power, and a paucity of wage employment. Africa’s vibrant spirit may prevail, but the challenges are formidable.