Goodbye Black Power, Hello Black-Scholes

Afica 2013 – Africa 2063 From Fragility to Stability

Adam Gordon
Adam Gordon, Contributor  5/15/2013 @ 10:49AM
The World Economic Forum hosts “mini-Davoses” around the world, and last week was Africa’s turn as the good and the great of the continent and allied well-wishers gathered for three days in Cape Town to reflect on recent achievements and look to the future.
The odd thing about this conference, bearing in mind that Sub-Saharan Africa has been single-handedly rebooted by Chinese investment (in raw materials extraction, and the logistics infrastructure to get the stuff to ports and away to China) is that Chinese speakers were effectively non-existent on the program. Witness the program schedule.

One wonders what to make of this, other than the obvious: Chinese investment is still a political potato too hot to handle both for African politicians and traditional donor-development organisations. China is seen as opportunistic at best, plundering at worst. And by the way it’s often not clear who is benefiting from the tender process.
The Economist recently estimated there are 1 million Chinese workers resident in Africa, contributing to trade of about $200bn a year for 2013. The direct effect of Chinese investment of this type and scale is it has allowed African leaders to work outside of the political niceties of the Washington Consensus, but even more importantly it has boosted the investment appetite of everyone else. “Hey, if they’re diving in, the water must be okay.” And so the Scramble for Africa 2.0 is on.
For eight of the last 10 years the “Lion economies” have grown faster than the East Asian tigers. Six of the 10 currently fastest-growing countries in the world are Africa (albeit of a low base.) Many problems remain, but the rhetoric has quickly changed from aid case to investment opportunity, not least from Wall Street and other investors in flat-line northern economies.
Inevitably, the conference session that got my attention was “Africa 2063.”
So, what will Africa be like in 50 years time? From ministers and dignitaries in a forum like this, you wouldn’t expect anything beyond polite affirmation of “peace, governance, prosperity for all.” It would be nice if intelligent, influential people were asked more pointed questions.
Notwithstanding the vacant wish-fulfillment, the proclamation from newly elected Kenyan President Uhuru Kenyatta was interesting. (If you’ve heard that name somewhere before, you’re right. He is the son of Jomo. This hardly reassures, in terms of escaping what Fukuyama calls “the pull of favors for friends and family,” but I digress.)
Between father and son Kenyattas, a U-turn, in rhetoric at least, has occurred and Uhuru puts it like this: at the time of the liberation struggle, freedom, independence and power was an end in itself. Now “it’s the economy, stupid.”  Okay, he didn’t exactly put it that way. But he may as well have, all to warm nods from the panel.
“Government should be an enabling environment for the private sector to succeed,” said Kenyatta.
In his view, and who would argue, regional economic integration is a priority. Free trade? Remove trade barriers! Protection of domestic markets? Deregulate!
With China investment going in just as fast as it can be absorbed, and Europe and the USA lining up to be through the door too, it’s dawning on African governments that all they need to do is to facilitate regional and global linkages, provide reasonable governance, and get out of the way.
Link-making includes practical things like breaking down petty obstacles and bureaucracies that stop people and goods moving to where they are most valued. Apparently, nobody thought the 70 miles of highway to connect Kenya to Ethiopia was worth building, but now it is happening.
Meanwhile, what’s the real future that the diplomats are too diplomatic to tell you?
Here it is: China is going to continue to dominate the emergence of the continent, which will become more investor friendly and (slowly) infrastructurally and logistically less dire, including becoming more connected to itself both physically and technologically. European and American investment will continue to inject at pace, competing with the Chinese, so don’t be surprised when an asset bubble expands, and then pops, just like in Russia and in Asia in the past 15 years.
As for social inclusion, don’t hold your breath. In the less-than-fettered capitalism the continent is racing to embrace, expect an external-investor-friendly cut-and-thrust commercial environment, creating an elite of a few very, very huge winners and leaving the masses slightly better off (maybe).
Demographics is always the foresight baseline, and Africa goes from 1bn to 2bn people by 2050. In 10 years there will be 65 cities of more than a million people. That’s a lot of social problems all stored up, waiting for time to release them, and so the bald question is: can African grow its economies faster than its inequalities?

Originalpeople Owner

Ro Ho

I'm the owner and creator of this website! I appreciate each and every one of you for joining, viewing, and shopping on my website! If you have any questions, fell free to ask!

Leave a Reply