The Myths, Challenges and Opportunities in Africa

Photo Credit

Having recently read about China and its history, I was interested to learn more about Africa and the going forward expectations of the vibrant continent of 1.2B people.

Although I’m US born and — therefore practically by definition poorly exposed to world history — my parents were born and raised in East Africa and I have traveled for work or fun to Kenya, Uganda, South Africa, Egypt and Morocco and have some familiarity with those parts of the continent. HOWEVER, it was definitely jarring to read Martin Meredith’s “The Fortunes of Africa: A 5000-Year History of Wealth, Greed, and Endeavor” which highlighted the complexity and the number of tragedies that befell the continent, particularly under colonialism.

A Continent in Perspective

Africa is young, populous, and relatively poor. While Africa has 17% of the world’s population, it only generates 4% of the world’s GDP putting its per capita GDP ($1,974) at 20% the global average ($10,585) and a mere 5% of N. America ($38,342). On the other-hand, unlike Europe and Asia’s aging population (43 and 32), Africa’s population is relatively young with a median age of 19.7 and 60% of its population under 25 and expecting to have twice the number of young people as all of Asia/Oceania by 2050.

And while the economy of Africa is $2.6T spread out over 54 countries, more than 50% of that comes from the 4 largest economies (Nigeria, South Africa, Egypt, Algeria) and the bottom 22 countries represent less than $100B.

I’ve generated a few charts below that help visualize the disparity between continents.

Global Population and GDP Charts by Author

The Impact of Colonial Rule

It is truly hard to overstate the tragedy, atrocities or longstanding impacts of colonial rule in Africa. But starting with the tragedies, here are just a few:

  • Men, women, children trafficked in the slave trade: 24 million
  • Children born to slave mothers who had European fathers: 3 out of 4
  • Death toll attributed to Colonialism: 50 million
  • Extraction in trade of natural resources ivory, gold, diamond, copper, rubber, sugar, etc.: Billions of dollars (couldn’t find an exact figure)

It’s hard to grasp — and even harder to come to terms with — the violence, pillaging, resource extraction, and downright inhumane treatment the colonial powers thrust on the various people of Africa.

Misconceptions of Conflict and Struggle in Africa

Since independence, Africa has not exactly thrived. Violent conflicts, corruption, and various development impediments that have held back the growth and rise of Africa. A number of causes have been cited, and many are not very charitable. I’d like to dispel a few of those myths here:

Tribalism. Africa is very diverse. And the fact is that there were no major countries to speak of before the colonial powers arrived. For efficiency of rule, the colonial powers split the continent up into more than 50 somewhat arbitrary countries. And although there are perhaps 19 major ethnic groupings, there are thousands of tribes and upward of 1,500 languages and dialects spoken throughout the continent. Historically post creation of Nigeria, political leader Obafemi Awolowo stated: “Nigeria is not a nation. It is a mere geographical expression. There are no ‘Nigerians’ in the same sense that there are ‘English’, ‘Welsh’, or ‘French’.”

Colonial powers divided groups by tribes to diffuse power (e.g. divide and conquer) and for management efficiency. The colonialist were outnumbered and could not contain or manage the Africans with their numbers alone, so would incentivize and pay certain tribal leaders to take power and “control” other groups and tribes in support of the colonial leaders. This excerpt from this article summarizes it well.

In Rwanda, for example, the Belgian government institutionalized the distinction between Hutu and Tutsi to help keep them from uniting against colonial rule, conferring education and civil service jobs on minority Tutsi and issuing identity cards that formally distinguished between the two groups. In the ’90s, when hardline Hutu leaders found their power threatened by both Tutsi and moderate Hutu, they turned to “ethnic war” to split the opposition and maintain power. Though U.S. media were quick to label it a spontaneous “tribal war,” evidence soon emerged that the violence was “deliberate, planned, organized, sophisticated and coordinated” (Organization of African Unity Report, 7/7/00).

The Hutu and Tutsi were indeed different tribes, but intermarried and moved between tribes more easily pre-colonialism. The Belgian’s intervention solidified and hardened those tribal divisions artificially. And only when some power hungry Hutus aimed for POLITICAL power, did they deliberately utilize the tribal construct as a way to gain power. In fact they first murdered moderate Hutus and then went after the minority Tutsis.

The assertion that violence in Africa is “tribal” is overly simplistic and does not recognize the role that a) the colonial powers had in creating those artificial divisions and b) the reality that politics and poor quality of life lead insurgents to use whatever identify politics they can to gain power.

Radical Islam. Similar to the guise of tribalism, “radical Islam” has been used as an excuse or cause to rally and unite people but purely for the goal of solidifying political power and ambitions — rarely for real religious or spiritual ambitions. In fact the message seems eerily familiar to the recent surge in nationalism (and dare I say tribalism) in western countries these past several years. The message goes like this: Remember how bad things were in the past (pre-Mohammed, pre-Islam)? And remember how great things were during the heyday (rise of Islam)? Let’s go back to those good old days. Those pure days. If we can just do everything like it was back then — if we can live authentic Islam — everything will be good. Make Africa Great Again!

And it has nothing to do with Islam (or tribes) and everything to do with the fact that life was not good for the common man post independence. When the colonialist pulled out — they left things in disarray with poor infrastructure and poor, or no, institutions. And so these upstart leaders take advantage of the poor economic climate and living conditions and use whatever identity politics they can to bring people together and promise a better future. Nothing to actually do with tribal division or radical Islam.

“Something” about the African People. And the last misconception has to do with the question of why had the African continent lagged behind Asia and Europe to begin with? Are the Africans somehow not as innovative or creative as Europeans and Asians? Short answer: definitely not. Jared Diamond’s “Guns, Germs, and Steel” does a good job positing one explanation: that the native geographic advantages of Euro-Asia — namely domesticable grains and animals — enabled those societies to develop efficient food production of more quickly. These farming advantages led to larger societies and, without the burden of having to spend all their time looking for food, these societies had the metabolic free time to experiment, innovate, etc. Sub-saharan Africa geographically did not benefit from those same domesticable advantages and did not move through the large scale agricultural revolution and the benefits that ensued.

So What’s Holding Africa Back? It is a complex question and I don’t have definitive answers, but one thought: Africa was thrust into the modern economy without strong central control and strong institutions. They did not have the same benefit of time that the other countries had to work through the agricultural revolution and industrial revolution to modernize, establish institutions, and ramp-up modern educational practices. Even China took more than 100 years to modernize and that was with a 4000 year old tradition of civilization and strong centralized authorities, empires, etc.

The multitude of development challenges, the growing population, the disproportionate incentives for easy newfound wealth, all within a very short time frame, have compounded to make for a challenging environment and difficulties for African leaders to show steady progress.

Current Challenges and Opportunities

So where are we now? According to this Brookings Institute report, Sub-Saharan Africa has three big development challenges: low levels and low quality of education, low levels of electrification, and low levels of domestic revenue mobilization — or essentially achieving a reasonable level of tax revenue vs. GDP ratio.

Education — is a challenge in terms of access and quality. In Sub-Saharan Africa less than 43% are in secondary school and less than 9% are in tertiary schools. In order to grow the economy, fill talent and labor shortages, countries throughout Africa will need to address this challenge.

Electrification —is a problem throughout the continent. Even thought there are a number of energy sources (e. oil, gas, coal) — many countries do not have adequate access. Nigeria for example has “close to 73 million people without access to electricity”. Even South Africa, the largest economy in Africa, “has some 8 million people without access to electricity”. Infrastructure, capacity, access are all lacking.

Domestic Revenue Mobilization (DRM) — is a fancy term that essentially refers to the ratio of tax revenue to GDP and providing some sense of how much tax revenue a country is able to collect. According to this UN Development Finance Report and as can see in the image below, the least developed countries including in Africa lag behind the middle-income and developed countries in terms of DRM. With low tax revenue, countries are not able to invest in necessary infrastructure and basic services and are not enable to further adequately drive the economy.

Tax Revenue vs. GDP. Image Source

Pathway Forward

I definitely don’t have any easy answers, but its clear to see that Africa is starting to turn the corner and has interesting potential:

In spite of the challenges, it appears that between the abundance of natural resources, a growing consumer economy, and a youthful population there are reasons to be optimistic. As has been the natural progression of other countries, I do think agriculture and manufacturing will play a key role for Africa. However, I think more than arable land and unskilled labor I’m very interested, and optimistic, to see how the human resources of Africa — the African people — will play a key role in the growing future knowledge economy and future of work. I suspect that is where some of the most value and opportunity may lie ahead.

References:

Loves Technology, Startups, and Tacos.