Africa’s lions are roaring

By Jonathan Power
Abuja, Nigeria

Approximately half the people of Africa own a mobile phone. In many African countries phone technology is ahead of Europe and North America. Money can be transferred from the city to an upcountry village. Bills can be paid. In Ghana farmers can receive text messages reporting the price of yams and corn two towns away and thus find the best market without a middleman. In Kenya residents of small villages can receive texts to say when the perambulating doctor will next be coming. In parts of West Africa nurses are storing patients’ data on phones.

It may be more difficult to build up fast internet penetration on pcs but in some countries 40% of mobile owners are using phones for email and the internet. The IMF says that the telecommunication sector is adding 2% to Nigeria’s already handsome annual economic growth.

Black Africa has come late to the party but a majority of its 48 countries is leaping ahead. One advantage of being late is that one can leapfrog over old concepts and tools and get today’s version at cheaper prices than the old. This is true for everything from state of the art well digging equipment to new seeds and mineral mapping.

Welcome to the new Africa! Lions roar and poverty drops!

All over infant mortality rates are falling, literacy is improving, longevity is rising and infectious diseases including Aids are falling steadily, as is malaria – thanks to big programs, courtesy of Bill and Melinda Gates and ex-president, Bill Clinton, to introduce impregnated bed nets.

A number of African countries have oil and valuable minerals sold at good prices. But East Africa which is the fastest growing region of sub-Saharan Africa has little of these. And even landlocked resource-poor Mali is doing well.

Paced by the Chinese and Indians, Western firms are now getting in on the act. In the last 12 months British trade with Nigeria has increased by 66% and is growing steadily. Credit Suisse bank says if they don’t develop their Africa expertise many clients will go elsewhere. Some countries are floating bonds on Western exchanges.

African stock markets are flourishing and home grown banks are pushing out their tentacles to small towns whilst making good profits. Micro lending is on the up, pulling distant villagers into the modern economy.

For the first time a middle class is emerging in significant numbers. Consumer products are in high demand. Motorbikes fill the roads. Good private schools, universities and hospitals are in high demand. The upper middle classes send their children to school and university in Europe and North America. Increasingly these graduates and the some of the rest of the Diaspora are returning to their land of opportunities.

Debt is down – partly thanks to write-offs by Western countries who were prodded into action by Western NGOs. Inflation is falling. Corruption is being tackled even though it is very much an uphill fight. Countries are finding new non-traditional items that they can export – flowers from Kenya and Zimbabwe and out of season vegetables from a number of countries. Intra-African trade has gone up from 6% to 13% of all trade.

Foreign aid has risen even if not by as much as Western heads of government had solemnly promised. For the most part it does some good, even if much is wasted and badly spent. One big problem is that diplomats and aid officials turn over every three years and continuity is lacking. New arrivals get kudos for starting new projects not for servicing old. Important things like new wells find their pumps break down after four years and nobody is organized to maintain them.

High commodity prices for everything from palm oil to cocoa to soya beans have given most countries a boost, yet commodities provide a smaller proportion of exports than they did a decade ago. Only about one third of Africa’s recent growth is due to commodity exports. Commodities have found new markets. A decade ago trade with Brazil, India and China made up only 1% of total trade. Now it is 20%.

Some countries are also working on the import side, introducing programs to persuade people to eat home grown food. In Nigeria the latest budget penalises rice and flour imports and favours home grown cassava. Bakeries now have to make sure that the content of their bread contains 40% cassava flour.

When the world economic crisis hit Africa sub-Saharan Africa weathered it. Commodity prices fell but the structure of the reformed African economies was strong enough to resist the pressures. Banks had not been over exposed to the ailments of Western ones.

Ten years ago The Economist labelled Africa as “The hopeless continent”. Much has changed. But don’t go out in the bush unaccompanied. The lions are roaring!

© Jonathan Power 2012

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