Rhodes University Logo

Understanding Africa is difficult

Rhodes>Critical Thought>News Slider Feed 2

.
.

By Steuart Pennington, Author.

 

It looks like Africa will be the only continent in 2012 to grow faster than it did in 2011, it has less debt than other continents and its diaspora contribute more in foreign capital than the sum of the World’s aid.

Observers of Africa very often fall into the trap of aggregating the countries of Africa to the extent that the conclusions drawn are meaningless.

  • “The Hopeless Continent” does not describe every country in Africa.
  • “The Shackled Continent” does not capture the consequences of Africa’s history.
  • The 16 year old holding an AK47, or the mother holding a starving child does not represent Africa’s “state”.
  • The bullet-ridden buildings in the dilapidated high street do not represent the average African city.
  • The madness of Mugabe is not reflective of some deep seated attribute of African leadership.
  • The Landrover battling through inhospitable terrain does not capture the essence of African infrastructure.

These images so often represented in Western media are not the truth of Africa today.

The 54 countries of Africa are very different.

Global Competitiveness

There are 30 African countries that now appear on the WEF Global Competitiveness Index.

Some have improved over the last three years and some have slipped.

Many are taking their rankings seriously, Rwanda has improved 25 positions over the past few years and now has 13 measures ranked in the top 10 on the world.

As the Harvard Business review said recently, “Africa holds the same potential as China did 20 years ago”.

Population

Only 11 countries in Africa have a population in excess of 30 million people (Algeria – 35 million; DRC (Democratic Republic of the Congo) – 68 million; Egypt – 84 million; Ethiopia – 79 million; Kenya – 40 million; Morocco – 36 million; Nigeria – 150 million; South Africa – 50 million; Sudan – 45 million, Tanzania – 45 million and Uganda – 36 million) yet 27 countries have a population of less than 10 million.

Population growth averages around 2.3%, which means that Africa will, for the foreseeable future, have a population which is young, with more people under 20 than over 40.

However the incidence of HIV prevalence, particularly in Sub-Saharan Africa (South Africa 21% of adults; Zimbabwe 24%; Zambia 16%; Swaziland 38%; Namibia 21%; Mozambique 12%; Malawi 14%; Lesotho 28%; Botswana 37%) is likely to create a large number of AIDS orphans and continue to reduce life expectancy. Most of the rest of Africa has an HIV prevalence of less than 3%.

Life Expectancy

Only eight countries have a life expectancy of more than 70 years (Algeria, Cape Verde, Egypt, Libya, Mauritius, Morocco, Seychelles, and Tunisia) with some 27 countries having a life expectancy of less than 50 years.

Literacy Rates

Some 17 countries have literacy rates that exceed 70% with 12 at below 50%. In Zimbabwe, Zambia, Swaziland, South Africa, Seychelles, Mauritius, Lesotho, Kenya and Equatorial Guinea literacy rates exceed 85%.

Gross Domestic Product

According to the International Monetary Fund only four countries have a Purchasing Power Parity (PPP) GDP of in excess of $200 billion with South Africa by far the largest at $555 billion (25th largest in the world) followed by Egypt $518 billion (26th); Nigeria $413 billion (30th) and Algeria $263 billion (47th). Some 31 countries have GDP of less than $20 billion, of that 7 of less than $2 billion.

GDP Growth

Some 33 countries however have a GDP growth rate that exceeds 4.5% with ten countries exceeding 7% GDP growth. Africa as a whole is expected to grow at 6.2% significantly higher than the United States and Canada (2%), Japan (1%), European Union (1.5%), Latin America (4.9%). Only China, India and Russia have higher growth rates.

Only 12 countries have GDP growth of less than 3%, with three of those showing negative growth (Zimbabwe, Comoros and Chad).

GDP per capita (PPP) varies from $19 356 in Equatorial Guinea, $16 030 in Botswana, $10 763 in South Africa to $300 in the DRC.

Only nine countries exceed $7 500 per capita (Algeria, Botswana, Equatorial Guinea, Gabon, Libya, Mauritius, Seychelles, South Africa and Tunisia) while 18 have a GDP per capita at less than $1 000 per annum.

Revenue vs. Expenditure

Some 17 countries carry a budget surplus forward annually, with very few carrying an enormous debt burden. And although public debt as a % of GDP was only available for 25 countries in only half of those did it exceed 30% of GDP.

Twelve countries have a positive current account balance while only six countries have a current account deficit that exceeds $1 billion. Africa does not have a great debt burden currently, with the whole continent carrying +/- $300 billion in debt. Egypt, Morocco, South Africa, Sudan, DRC, Cote d’ Ivoire and Angola carry in excess of 50% of the debt of the whole continent.

Railway Lines, Paved Roads and Airports (with paved runways)

In total Africa has approximately 80 000 kilometres of railway lines, 20 000 kilometres of which are in South Africa with 35 other African countries having 1 000 kilometres or less.

Likewise Africa has 560 000 kilometres of paved roadways, 73 000 of which is in South Africa, with only 12 other African countries having more than 10 000 kilometres of paved roads and 13 having less than 1 000 kilometres.

The same story can be told of airports with paved runways, 31 countries have less than ten such airports, in South Africa there are 146. Most countries have to import electricity and access is very difficult.

Conclusion

On the positive side Africa is a continent of 54 countries many of which are positioning themselves for GDP growth exceeding 5% per annum.

It has a young population, is rich in resources, has relatively little debt, and is embracing communication technology.

Political transformation is sweeping through the continent and foreign investment is growing.

Clearly there are many challenges; Tuberculosis, HIV/Aids and Malaria pose serious health challenges, with many thousands of people dying every day; doing business in Africa is complicated; infrastructure is woefully inadequate; crime; poverty and unemployment loom large in most countries and the skill levels required to drive a modernising economy are desperately short.

The markets in Africa are fragmented. 80% of Africa’s GDP is attributable to South Africa, Algeria, Libya, Morocco, Egypt and Nigeria. But Angola, Ethiopia, Cameroon, Cote d’ Ivoire, Ghana, Kenya, Sudan and Tunisia have a reasonably strong GDP base and market place.

The formation of free trade blocs, customs unions such as SADC (Southern African Development Community), ECOWAS (Economic Community of West African States), EAC (East African Community), COMESA (The Common Market for Eastern and Southern Africa) and ECCAS (Economic Community of Central African States) is essential if the smaller African countries are to prosper.

Alongside that must come economic freedom, media freedom, regional free trade zones, improved infrastructure, political stability, the protection of property rights and of course, the rule of law. Everywhere there are signs of transformation. The challenge is to present this information coherently to the rest of the world and demonstrate that it will be sustainable.