tag:theconversation.com,2011:/uk/topics/african-economies-18408/articlesAfrican economies – The Conversation2023-03-07T10:43:15Ztag:theconversation.com,2011:article/2006002023-03-07T10:43:15Z2023-03-07T10:43:15ZAfrica’s shift to low-cost manufacturing puts women at risk - 4 lessons from the Asian Tigers<figure><img src="https://images.theconversation.com/files/512878/original/file-20230301-18-or4zk6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/addis-ababa-ethiopia-january-30-2014-1313445374">Shutterstock</a></span></figcaption></figure><p>Economists have urged African countries to shift to low-cost manufacturing – the path that led countries such as <a href="https://www.imf.org/external/pubs/nft/op152/chap1.htm">Hong Kong</a>, <a href="https://www.amazon.com/Third-World-First-Singapore-1965-2000/dp/0060197765">Singapore</a>, <a href="https://kellogg.nd.edu/sites/default/files/old_files/documents/166_0.pdf">South Korea</a> and <a href="https://www.ide.go.jp/library/English/Publish/Periodicals/De/pdf/69_01_04.pdf">Taiwan</a> – to industrial prosperity. These East Asian economies – which recorded high growth rates of <a href="https://www.stlouisfed.org/on-the-economy/2017/may/tigers-tiger-cubs-economic-growth">at least 7%</a> between the 1950s and 1990s – are commonly referred to as the <a href="https://tesi.luiss.it/15269/1/176201.pdf">Asian Tigers</a>.</p>
<p>Starting in the 2000s, many of Africa’s top economies achieved high growth rates through <a href="https://www.imf.org/external/pubs/ft/dp/2013/dp1302.pdf">natural resource extraction</a>. Mineral resources such as oil, natural gas and coal were the main export items. </p>
<p>Economists have <a href="https://www.imf.org/external/pubs/ft/wp/2013/wp13188.pdf">cautioned</a> that growth based on natural resources is vulnerable to global price fluctuations. Other limitations include weak linkages to domestic economies, low employment creation, negative impacts on local communities, tax avoidance by multinationals involved and climate change impacts.</p>
<p>By contrast, economists regard growth that is driven by low-cost export-producing manufacturing as <a href="https://set.odi.org/wp-content/uploads/2016/04/Export-Based-Manufacturing-in-Africa_Full-paper.pdf">more beneficial</a> for development. This is because it is seen as globally competitive and able to create a lot of low-wage jobs. The Asian Tigers partly relied on it to achieve their economic prosperity. </p>
<p>As a result, <a href="https://www.mckinsey.com/featured-insights/middle-east-and-africa/lions-on-the-move-realizing-the-potential-of-africas-economies">economic commentators</a> have been urging African countries to embrace export-led manufacturing. </p>
<p>A <a href="https://www.hurstpublishers.com/book/the-asian-aspiration/">recent book</a> written by some of Africa’s influential leaders and advisors sums up the call:</p>
<blockquote>
<p>The relevance of Asia’s example comes as Africa is facing a population boom, which can either lead to crisis or prosperity; and as Asia is again transforming, this time out of low-cost manufacturing into hi-tech, leaving a void that is Africa’s for the taking.</p>
</blockquote>
<p>Many African countries have heeded the call, specialising mainly in the manufacture of textiles, cloth, food and beverages. They include <a href="https://www.econstor.eu/handle/10419/229218">Kenya</a>, which has mainly been producing textiles at its <a href="https://epzakenya.com/#">export processing zones</a> for sale to the US, and <a href="https://www.ajol.info/index.php/aref/article/view/162150/151664">South Africa</a>, where <a href="https://www.imf.org/external/pubs/ft/wp/2016/wp1624.pdf">manufactured products</a>, mostly <a href="https://theconversation.com/south-africa-is-exporting-more-food-but-it-needs-to-find-new-growth-frontiers-200747">food items</a>, are key exports. Others include <a href="https://www.ajol.info/index.php/boje/article/view/60205">Botswana</a>, which has been trying to diversify its mineral-driven economy, <a href="https://www.wto.org/english/res_e/booksp_e/cmark_chap1_e.pdf">Mauritius</a>, where export of services has taken root, and <a href="https://openknowledge.worldbank.org/handle/10986/8788">Madagascar</a>.</p>
<p>Between 2005 and 2014, manufacturing production across the continent more than doubled from <a href="https://odi.org/en/insights/why-african-manufacturing-is-doing-better-than-you-think/">US$73 billion to $157 billion</a>. This was faster than the global average. </p>
<p>But the call to emulate the Asian Tigers could be ill-advised. As I argue in a <a href="https://www.tandfonline.com/doi/10.1080/03056244.2022.2047632?utm_source=CPB&utm_medium=cms&utm_campaign=JOE09624&_ga=2.254742028.562234278.1676534586-1508998848.1676534586&_gl=1*m9mzqv*_ga*MTUwODk5ODg0OC4xNjc2NTM0NTg2*_ga_0HYE8YG0M6*MTY3NjUzNDU4Ni4xLjAuMTY3NjUzNDU5MC4wLjAuMA..">recent paper</a>, such a move has significant gendered implications. It can lead to increased discrimination, widening inequality and crises in family life.</p>
<p>In particular, there are four lessons Africa’s fastest growing economies should learn from the four Asian Tigers.</p>
<h2>Lessons from Asia</h2>
<p><strong>1. Exploitation and control of low-waged female labour</strong>. The Tigers have relied heavily on women’s labour as a specific asset which is cheap, productive and easy to control. Records <a href="https://www.ilo.org/public/english/standards/relm/ilc/ilc93/pdf/rep-i-b.pdf">show</a> that low wages, poor working conditions, frequent layoffs and a lack of rights and union protection for women working in manufacturing industries have been rife in Asia since the 1980s. </p>
<p>Rapid economic growth and wealth for a few have come at the expense of many, with wages often insufficient to support families and working conditions undermining family life.</p>
<p><strong>2. Pushing more women into the informal economy</strong>. As women have sought to supplement the meagre incomes they get from their manufacturing work, female participation in the informal economy has surged. <a href="http://www.oit.org/public/english/protection/ses/download/docs/gender.pdf">Studies from Asia</a> reveal a direct correlation between growth in female participation in formal manufacturing sectors and growth in female participation in informal sectors.</p>
<p>In Africa, women already dominate the <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_626831.pdf">informal economy</a>. In addition to the risks of unstable earnings and no access to health insurance or to other economic and social safety nets, women carry the double burden of informal work and care responsibilities in the home. They experience a disproportionate impact from lack of access to social protection. They are more likely to experience discrimination in accessing financial and other services. And they are more likely to be intimidated and abused by others in the informal sector.</p>
<p><strong>3. Growing inequalities accompany growth</strong>. Tigers have succeeded in reducing poverty to varying degrees. But inequality has increased. A wide range of studies track the <a href="https://www.adb.org/sites/default/files/publication/41630/inequality-asia-and-pacific.pdf">polarising impacts</a> of changes in labour market and income distribution at both economic and social levels across the region. There’s a common pattern: highly skilled workers with more education see their incomes rise as those of low-skilled workers either stagnate or reduce. This trend is disproportionately felt by women. The pay gap is apparent even in countries where women have higher education attainment than men, such as <a href="https://www.ios.sinica.edu.tw/people/personal/ccf/GenderInequalityinEarningsinIndustrializedEastAsia.pdf">Taiwan</a>. </p>
<p>Widening inequalities are already a feature of many African states. In the absence of state policies to regulate wages, such inequalities are likely to deepen.</p>
<p><strong>4. A crisis in social reproduction</strong>. The impossibility of juggling paid work with unpaid work at home and within the community has resulted in a crisis in social reproduction in Asia. <a href="https://www.researchgate.net/publication/338358582_The_Gender_Wage_Gap_in_Four_Asian_Countries_Japan_Singapore_South_Korea_and_Taiwan">Studies</a> show increases in marriage age, decreases in fertility rates and growing numbers of divorces across the region. This may signal a newfound independence among Asian women – but it also represents a broader crisis in family life. </p>
<p>This crisis also threatens the very economic system which depends on it. African countries don’t usually have state support for family and community care. A similar crisis seems inevitable on the continent, where the nature and composition of families is already rapidly changing.</p>
<h2>What can be done?</h2>
<p>Asia’s labour-intensive and export-driven manufacturing path does provide an alternative to the environmentally damaging and socially dislocating natural resource exploitation which is also of <a href="https://www.tandfonline.com/doi/full/10.1080/03056244.2019.1605589">limited benefit to Africa’s local economies</a>. Yet not everyone stands to benefit from it equally. </p>
<p>The overall lesson from Asia’s decades of experience is that export-led policy is not gender-neutral. The export-oriented manufacturing increases gendered inequalities and discrimination. African countries should not replicate Asian experiences, but instead learn from them. </p>
<p>African analysts and policymakers should promote fair and progressive pay and working conditions for all workers. Greater public investment in infrastructure and social services is needed. And there should be policies that support and redistribute unpaid domestic labour. </p>
<p>As the Asian experiences have demonstrated, failure to act will worsen existing gendered inequalities and discrimination, and eventually undermine the essential social base of economic growth.</p><img src="https://counter.theconversation.com/content/200600/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Niamh Gaynor does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Asia’s much touted low-cost, export-oriented manufacturing model increases gender discrimination.Niamh Gaynor, Associate Professor of International Development, Dublin City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1843942022-06-27T14:02:24Z2022-06-27T14:02:24ZKenya and South Africa offer insights into digital economy challenges and alternatives<figure><img src="https://images.theconversation.com/files/468006/original/file-20220609-18-wecu74.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Telemarketers at an international outsourcing call centre in Nairobi. </span> <span class="attribution"><span class="source">Tony Karumba/AFP via Getty Images</span></span></figcaption></figure><p>The World Bank is warning of <a href="https://www.bbc.com/news/business-59946302">the real danger</a> of a massive economic downturn across the world. In a <a href="https://www.worldbank.org/en/news/press-release/2022/04/13/sub-saharan-african-growth-slows-amid-ongoing-and-new-economic-shocks#:%7E:text=The%20World%20Bank's%20latest%20Africa's,supply%20disruptions%20and%20climate%20shocks">recent analysis</a> it warned that many countries – including those in sub-Saharan Africa – will be facing economic challenges due to rising food and fuel prices. </p>
<p>At the same time, however, there is unshakeable optimism around the growth potential of African economies as a whole and specifically <a href="https://www.dw.com/en/analysts-forecast-grim-2022-economic-outlook-for-africa/a-60405289%23:%7E:text=Various%20threats%20face%20African%20economies,%22Global%20Economic%20Prospects%22%20report">the digital economy</a>. The <a href="https://institute.global/policy/supercharging-africas-startups-continents-path-tech-excellence">rapid rise of tech hubs and startups</a> in urban areas in sub-Saharan Africa in recent years seems to support that.</p>
<p>Many observers have, therefore, identified the digital economy as an <a href="https://www.dw.com/en/analysts-forecast-grim-2022-economic-outlook-for-africa/a-60405289#:%7E:text=Various%20threats%20face%20African%20economies,%22Global%20Economic%20Prospects%22%20report">important driver of long-term growth in Africa</a> despite current global challenges.</p>
<p>The reality is that experiences with promoting the digital economy in sub-Saharan Africa have been mixed. Following great hopes in the promise of “digital connectivity” in the early 2000s, <a href="https://eprints.whiterose.ac.uk/117030/10/Digital%20Control%20in%20Value%20Chains%20Challenges%20of%20Connectivity%20for%20East%20African%20Firms.pdf">many scholars have observed</a> that the ability of African businesses to turn connectivity into success in global markets has been limited. </p>
<p>The future of Africa’s tech scene is equally uncertain. Despite great potential, the <a href="https://institute.global/policy/supercharging-africas-startups-continents-path-tech-excellence">tech startup scene is underfunded</a>, and several tech hubs <a href="https://www.theafricareport.com/23434/tech-hubs-across-africa-to-incubate-the-next-generation/">have had to shut down due to bankruptcy</a>.</p>
<p>How can we explain this gap between promise and reality with digital economy investments in sub-Saharan Africa? And how can investments lead to more sustainable growth? </p>
<p>In my recent <a href="https://www.sciencedirect.com/science/article/pii/S0048733322000609?via%3Dihub">study</a> I analysed the historical case of global business services in Kenya and South Africa to examine why governments and businesses make certain investment choices over time, and how they can learn to be more in tune with the context of sub-Saharan Africa.</p>
<p>The main finding is that global templates of success, such as meeting global standards and developing scalable business models, often stand in the way of realising the full potential of locally specific skills and business opportunities. As I show below, this has fundamental implications for today’s digital startup scene in sub-Saharan Africa. </p>
<h2>Flawed hopes</h2>
<p>The promise of the digital economy has always been a double-edged sword. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2855398">Many global consulting firms and international organisations</a> initially saw “digital connectivity” as a key driver for the future growth of African economies. Even today there is a strong belief that you just need to have <a href="https://www.theafricareport.com/23434/tech-hubs-across-africa-to-incubate-the-next-generation/">the right infrastructure in place</a> for the digital economy to grow and create jobs. </p>
<p>This optimism led the Kenyan government in 2007 to <a href="https://academicjournals.org/article/article1380730555_Iraki.pdf">define business process outsourcing as a central pillar in its Vision 2030</a>. The assumption was that Kenya had the talent and internet connectivity to copy India’s success in this business. In a similar fashion, South Africa’s business leaders put their hopes in call centres, which had previously generated many jobs in India and the Philippines.</p>
<p>But these hopes turned out to be flawed. Digital businesses are often easy to get into but difficult to compete in – <a href="https://www.academia.edu/1754295/New_Silicon_Valleys_or_a_New_Species_Commoditization_of_Knowledge_Work_and_the_Rise_of_Knowledge_Services_Clusters">especially on the global stage</a>. To win client contracts in a highly standardised digital business, such as call centres and tech support, you need to be scalable. Yet, to succeed with scale you also need to be cost competitive and develop a strong reputation. </p>
<p>Kenyan business process outsourcing services were neither scalable nor competitive. As a result they soon <a href="https://nation.africa/kenya/business/business-park-opens-doors-to-other-firms-as-bpos-fail-to-lift--816184">went out of business</a>. A famous example was <a href="https://www.businessdailyafrica.com/bd/corporate/companies/jobs-on-the-line-as-creditor-makes-last-call-for-kencall--2073802">KenCall</a>, a once-hyped Kenya-based call centre that could not keep up with global competition. </p>
<p>South African call centres had the scale. But competition from the Philippines put enormous pressure on them. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/for-workers-in-africa-the-digital-economy-isnt-all-its-made-out-to-be-176724">For workers in Africa, the digital economy isn't all it's made out to be</a>
</strong>
</em>
</p>
<hr>
<p>The current tech startup scene seems to be facing similar challenges: <a href="https://institute.global/policy/supercharging-africas-startups-continents-path-tech-excellence">scalability of new ventures has been a serious issue</a>. In part this is due to poor support infrastructure as well as global competition.</p>
<h2>Lessons learnt</h2>
<p>In the case of global business services, Kenya and South Africa learned their lesson. Initially, trying to meet global standards and keep up with global rivals was seen as desirable in the eyes of governments, businesses and the general public. But as competitive pressure grew, <a href="https://www.sciencedirect.com/science/article/pii/S0048733322000609?via%3Dihub">the agenda changed</a> from competing globally to avoiding global competition, from meeting global standards to focusing on locally specific skills and resources.</p>
<p>As a result, both economies invested into niche business segments. For example, Kenyan business process outsourcing providers increasingly focused on local and regional clients <a href="https://www.tandfonline.com/doi/full/10.1080/00220388.2015.1126251">rather than trying to compete for clients from Europe and North America</a>. </p>
<p>In the case of South Africa, business services increasingly <a href="https://www.cio.com/article/220513/the-culture-of-outsourcing-in-africa.html">diversified into more specialised areas</a> such as legal process outsourcing, to lower global competitive pressure. </p>
<p>Also, both economies promoted so-called <a href="https://tunga.io/tech-for-good-will-impact-sourcing-be-the-new-fair-trade/">impact sourcing</a>, which focuses on hiring and training disadvantaged young people from slums and rural areas, combining employment opportunities with community impact. What these niche strategies have in common is that they are less subject to global competition, and that they rely on locally embedded resources, such as local client connections and <a href="https://www.academia.edu/29577219/The_strategic_potential_of_community_based_hybrid_models_The_case_of_global_business_services_in_Africa">untapped labour pools in local communities</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-fourth-industrial-revolution-a-seductive-idea-requiring-critical-engagement-184475">The Fourth Industrial Revolution: a seductive idea requiring critical engagement</a>
</strong>
</em>
</p>
<hr>
<p>Some of these niche models emerged even before they became fashionable. In fact, their ability to survive against the mainstream gave them a competitive edge, allowing them to survive in the long-term.</p>
<p>A similar dynamic might be unfolding with today’s tech startup scene in sub-Saharan Africa. </p>
<h2>Alternative models</h2>
<p>It’s still fashionable today to promote tech startups and tech hubs based on models from the global North. But new, alternative models might be emerging that might be much more sustainable. </p>
<p>For example, studies suggest that African businesses are traditionally much more community-focused. Businesses exist to <a href="https://www.cambridge.org/core/journals/management-and-organization-review/article/africa-business-research-as-a-laboratory-for-theorybuilding-extreme-conditions-new-phenomena-and-alternative-paradigms-of-social-relationships/51886A8394EDC018E758EEC60AFB3153">support communities rather than just to make profit</a>. Research shows that while African tech hubs often “fail” to scale up businesses in the Western sense, they are very effective in providing individual growth opportunities and in <a href="https://www.tandfonline.com/doi/abs/10.1080/02681102.2017.1335282">expanding and deepening community connections</a>. </p>
<p>Such experiences suggest that concepts of “scalability” and “growth” may take on a range of meanings in sub-Saharan Africa, and that the global North should expand their horizon beyond their narrow conception of these terms to really understand Africa’s economic potential.</p>
<h2>Take-aways</h2>
<p>Recent reports may be right that the digital economy carries a lot of potential in helping sub-Saharan Africa overcome current economic challenges towards sustainable growth. But maybe it is not because the digital economy can merely drive economic growth in the conventional sense, but because it can expand regional business networks and local communities, and make them more resilient against global economic threats.</p><img src="https://counter.theconversation.com/content/184394/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephan Manning does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s still fashionable today to promote tech startups and tech hubs based on models from the global north. But new, alternative and more sustainable models might be emerging.Stephan Manning, Professor of Strategy and Innovation, University of Sussex Business School, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1744842022-01-11T14:59:56Z2022-01-11T14:59:56ZAfrica faces an uphill battle against western emissions to combat climate change<figure><img src="https://images.theconversation.com/files/440218/original/file-20220111-23-8qqh9c.jpeg?ixlib=rb-1.1.0&rect=5%2C5%2C3589%2C1789&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Although African nations contribute the least to climate change, many are bearing its worst burdens.</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Mushin_Market_in_Lagos_Nigeria.jpg">Omoeko Media/Wikimedia</a></span></figcaption></figure><p>The UN climate summit <a href="https://theconversation.com/cop26-experts-react-to-the-un-climate-summit-and-glasgow-pact-171753">COP26</a>, held in November 2021, focused the world’s attention on the urgent need to tackle climate change and concluded with 197 countries agreeing to the <a href="https://theconversation.com/glasgow-climate-pact-where-do-all-the-words-and-numbers-we-heard-at-cop26-leave-us-171704">Glasgow climate pact</a>. But opinions on the summit’s success are <a href="https://unclimatesummit.org/the-glasgow-pact-what-do-the-experts-say-about-the-outcome/">polarised</a>. </p>
<p>We owe a profound gratitude to the developing nations – including those from Africa – who agreed to the pact. In doing so, they chose not to insist that richer <a href="https://theconversation.com/cop26-deal-how-rich-countries-failed-to-meet-their-obligations-to-the-rest-of-the-world-171804">developed nations</a>, whose historical and ongoing greenhouse gas emissions have largely caused the climate crisis, pay reparations to them for the damage they’ve inflicted.</p>
<p>African nations continue to hold the unenviable position of being disproportionately <a href="https://unfccc.int/files/press/backgrounders/application/pdf/factsheet_africa.pdf">vulnerable</a> to climate change. Although the continent accounts for the smallest share of global greenhouse gas emissions – only <a href="https://www.brookings.edu/wp-content/uploads/2016/08/global_20160818_cop21_africa.pdf">3.8%</a> – it’s already <a href="https://www.ipcc.ch/assessment-report/ar6/">heating</a> faster than the rest of the world.</p>
<p>And if the target of limiting global warming to <a href="https://theconversation.com/ipcc-says-earth-will-reach-temperature-rise-of-about-1-5-in-around-a-decade-but-limiting-any-global-warming-is-what-matters-most-165397">1.5°C</a> above pre-industrial levels is missed, Africa could be facing catastrophic <a href="https://unfccc.int/news/climate-change-is-an-increasing-threat-to-africa">temperature increases</a> of up to 3°C by 2050. </p>
<p>At the same time, the threat to GDP of African nations that are most vulnerable to these changes – meaning the amount of economic activity that stands to be lost if these changes are severe enough – is <a href="https://www.brookings.edu/research/africa-can-play-a-leading-role-in-the-fight-against-climate-change/">projected</a> to increase from £660 billion in 2018 to over £1 trillion in 2023. That’s almost half of the continent’s projected GDP.</p>
<figure class="align-center ">
<img alt="A person walks in water among mangrove roots" src="https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/440221/original/file-20220111-27-1y90pw5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Mangroves protect coasts from erosion and fight global warming by storing excess carbon.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/cifor/35310258554">Cifor/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Given these estimates, Africa’s climate resilience must exceed the global norm. And some steps are being taken to protect the continent against the worst climate consequences through investments from national governments and the private sector. Organisations such as the <a href="https://www.afdb.org/en">African Development Bank</a> and the <a href="https://www.unep.org/">UN Environment Programme</a> are also leading climate change <a href="https://theconversation.com/mangroves-from-space-30-years-of-satellite-images-are-helping-us-understand-how-climate-change-threatens-these-valuable-forests-156040">adaptation measures</a>, like working to protect <a href="https://news.un.org/en/story/2021/07/1096392">mangroves</a> on over 200 million hectares of land.</p>
<p>However, the estimated yearly cost of this kind of climate adaptation for developing nations is around <a href="https://www.unep.org/resources/adaptation-gap-report-2020">£52 billion</a> – and is expected to rise to between £100-220 billion by 2030. While developed nations agreed in the Glasgow pact to double climate change contributions to their developing counterparts by about £29 billion by 2025, this amount is just a fraction of what’s needed. </p>
<h2>Next steps</h2>
<p>One way to close this gap could be to leverage the <a href="https://theconversation.com/cop26-how-the-world-will-measure-progress-on-the-paris-climate-agreement-and-keep-countries-accountable-160325">Paris climate agreement</a>, specifically, a subsection of <a href="https://www.ecosystemmarketplace.com/articles/breaking-new-article-6-draft-shows-broad-compromise-on-carbon-markets/">article six</a> that allows countries with high emissions, such as the US and UK, to offset them through investing in sustainable initiatives like reforestation in low-emitting countries: including those in Africa. Such partnerships could act as a catalyst for the growth of <a href="https://theconversation.com/climate-explained-how-much-of-the-worlds-energy-comes-from-fossil-fuels-and-could-we-replace-it-all-with-renewables-167190">low carbon</a> energy projects such as solar, geothermal and wind power.</p>
<p>Another option could be to redirect local government money towards sustainable schemes. The total amount provided by African national governments in fossil fuel subsidies rose to <a href="https://ictsd.iisd.org/bridges-news/bridges-africa/news/reforming-africa%E2%80%99s-fossil-fuel-subsidies">£55 billion</a> in 2015 alone, causing calls for “<a href="https://sdg.iisd.org/news/governments-adopt-glasgow-climate-pact-operationalize-paris-agreement">phasing down</a>” these subsidies to be enshrined in the Glasgow climate pact. </p>
<figure class="align-center ">
<img alt="A panorama of a solar power plant" src="https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=243&fit=crop&dpr=1 600w, https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=243&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=243&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=306&fit=crop&dpr=1 754w, https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=306&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/440220/original/file-20220111-15-1aqepxt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=306&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The world’s largest concentrated solar plant, based in Morocco.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/irenaimages/32684583904/in/photostream/">Irena/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Since subsidy money was flowing into an industry employing <a href="https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/14987/697_Fossil_Fuels_and_Job_creation_in_Africa.pdf?sequence=1&isAllowed=y">less than 1%</a> of Africa’s workforce, it could instead be invested back into African economies, creating inclusive, environmentally friendly job opportunities. For example, it might be used to fund startups like <a href="https://twitter.com/gjenge_makers">Gjenge Makers</a>: a Kenyan business making paving blocks and tiles out of <a href="https://www.globalconstructionreview.com/kenyan-start-recycles-plastic-bottles-bricks-stron/?utm_campaign=ClimatePreneurship">recycled plastic</a>.</p>
<p>Despite contributing the least to the changing climate, many African nations are also taking strides to transition to renewable energy. The world’s largest <a href="https://www.climatechangenews.com/2019/01/22/solar-plant-size-3500-football-pitches-powers-moroccos-sunlit-ambitions/">concentrated solar power</a> (CSP) facility in Morocco, <a href="https://www.ecohz.com/noor-solar-power-in-morocco#:%7E:text=Noor%20Power%20Plant%20in%20Morocco,kWh%2Fm2%2Fyear.">Noor Power Plant</a>, converts the Sun’s energy to electricity for around two million households. </p>
<p>Unlike more widely used photovoltaic panels, CSP enables solar energy to be stored for nights and cloudy days. The facility generates more than a third of Morocco’s power while reducing carbon emissions by around <a href="https://www.worldbank.org/en/news/feature/2015/11/20/morocco-to-make-history-with-first-of-its-kind-solar-plant">690,000 tonnes</a> per year. </p>
<p>Projects like these don’t just create more jobs, they also make more money. Up to <a href="https://www.brookings.edu/research/africa-can-play-a-leading-role-in-the-fight-against-climate-change/">£236 billion</a> of new business opportunities that aim to <a href="https://www.unep.org/news-and-stories/story/africa-restoring-ecosystems-central-green-recovery">climate-proof</a> food and land systems – including preserving local forest ecosystems and restoring degraded landscapes – could be added each year to Africa’s economies between now and 2030.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
<br><em><a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeTop">Get a weekly roundup in your inbox instead.</a> Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. <a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeBottom">Join the 10,000+ readers who’ve subscribed so far.</a></em></p>
<hr><img src="https://counter.theconversation.com/content/174484/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thanks to Dr Richard Munang for his valuable contributions to this article.</span></em></p>The African continent stands to lose the most from climate change - here’s what local governments can do to protect it.Margaret Kadiri, Lecturer in Physical Geography, King's College LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1710102021-11-17T14:21:43Z2021-11-17T14:21:43ZMilitary expenditure reduces the negative effect of terrorism on economic growth<figure><img src="https://images.theconversation.com/files/431279/original/file-20211110-21-15hrpg4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Economic growth is affected by military expenditure</span> </figcaption></figure><p>In a number of African countries, terrorism has become a major challenge to socioeconomic development. This has spurred <a href="https://scholar.google.com/scholar?q=impact+of+terrorism+on+economic+growth&hl=en&as_sdt=0,5">research</a> on the extent to which terrorism affects economic growth. But an area that’s been less examined is the influence of military expenditure on the relationship between terrorism and economic growth in Africa.</p>
<p>Let’s take two examples: Nigeria and Somalia. These two countries are among the most prominent cases of insurgencies and acts of terrorism on the continent. </p>
<p>In Nigeria, insurgent groups such as <a href="https://www.aljazeera.com/tag/boko-haram/">Boko Haram</a> and the <a href="https://issat.dcaf.ch/fre/layout/set/fullscreen/Apprendre/La-bibliotheque-des-ressources/Recherches-et-documents-strategiques/Facing-the-Challenge-of-the-Islamic-State-in-West-Africa-Province">Islamic State of West Africa Province</a> have been waging war in the north-eastern zone of the country. This has led to the destruction of economic infrastructure, a reduction in domestic investment and a fall in economic activity. This has, in turn, influenced the growth rate of the country’s GDP. </p>
<p>In Somalia, <a href="https://openknowledge.worldbank.org/handle/10986/8476">conflict among clans</a> has enhanced terrorism which has destroyed the Somalian economy. This has led to <a href="https://www.unicef.org/somalia/nutrition">severe malnutrition</a>, particularly among children.</p>
<p>The default response to increased insurgency and acts of terrorism is to up military spending. This is a longstanding defence policy for counter-terrorism. For instance, since the emergence of Boko Haram in 2009, military expenditure in Nigeria has increased significantly. There was <a href="https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?locations=NG">a 36% increase when comparing 2009 and 2018</a>. </p>
<p>In Somalia, there has been a more than 100% increase in military expenditure when comparing <a href="https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?locations=SO">2013 to 2018 figures</a>. </p>
<p>But the effectiveness of higher military spending in mitigating the impact of terrorism on economic growth has not been tested. This is the gap <a href="https://www.tandfonline.com/doi/full/10.1080/19434472.2021.1987967">our study</a> sought to fill.</p>
<h2>The search for answers</h2>
<p>We set out to test the hypothesis that military expenditure mitigates the negative effect of terrorism on economic growth. The study was based on a panel of 24 African countries that had high levels of terrorist activities and for which data on terrorism was available. The data coverage spanned 18 years (2001 to 2018).</p>
<p>The study used two variables for terrorism – incidents and fatalities. Data for these was sourced from the <a href="https://reliefweb.int/report/world/global-terrorism-index-2020-measuring-impact-terrorism">2019 Global Terrorism Database</a>. Economic growth, as measured by the growth rate in the gross domestic product (GDP), was sourced from the <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG">2020 World Development Indicator</a>. </p>
<p>The study proxied military expenditure with the percentage of military expenditure in GDP, sourced from the <a href="https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS">World Development Indicators</a>.</p>
<p>We also used five control variables in the modelling. They included:</p>
<ul>
<li><p>gross capital formation as a measure of capital</p></li>
<li><p>population (15 to 64) to capture labour force </p></li>
<li><p>primary school enrolment as a proxy for education </p></li>
<li><p>the <a href="https://competitivite.ferdi.fr/en/indicators/polity2-polity-iv">POLITY2 index</a>, which captures regime type and has been used to measure democracy</p></li>
<li><p>government effectiveness to proxy the quality of governance.</p></li>
</ul>
<p>Our main findings were that: </p>
<ul>
<li><p>terrorism has a detrimental effect on economic growth in the selected African countries </p></li>
<li><p>the interactive effect of military expenditure and terrorism on economic growth is significantly positive </p></li>
<li><p>the net effect of the interaction between military expenditure and terrorism on economic growth is positive when the number of terrorism incidents acts as a proxy for terrorism. But it’s negative when the number of terrorism fatalities acts as a proxy for terrorism. The negative effect is substantially lower when compared to the unconditional effect of terrorism on economic growth in Africa. </p></li>
</ul>
<h2>The effect of military expenditure</h2>
<p>In an effort to mitigate the impact of terrorism on the economy, African countries have increased military spending. <a href="https://www.researchgate.net/publication/336374953_Military_expenditure_and_security_outcome_convergence_in_African_regional_economic_communities_Evidence_from_the_convergence_club_algorithm">A 2019 study showed that</a> military expenditure in Africa had increased by 91% since 2005.</p>
<p>There are two ways in which the increase in military expenditure can mitigate terrorism’s negative effect on economic growth. </p>
<p>The first is via the effect of counter-terrorism. This improves security and leads to the reduction in economic uncertainty, the restoration of economic activity and ultimately increased investment.</p>
<p>The second is the impact of increased military expenditure on economic activity. This happens via a boost to aggregate demand. Four major components affect it. These are consumption, investment, government expenditure and net export. Increased government expenditure on the military would therefore have an impact. But this can be less effective if the capital components of military expenditure are import oriented.</p>
<p>Some academics <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/pa.2253">caution</a> that increased military expenditure can have negative consequences. This includes the risk of the abuse of power and human rights. This can, in turn, also lead to a further deterioration of peace in a country.</p>
<p>Intuitively, it is expected that military expenditure mitigates the negative influence of terrorism on the economy.</p>
<p>However, a study by economists <a href="https://www.tandfonline.com/doi/abs/10.1080/10242690903568884">Mete Feridun and Muhammad Shahbaz</a> showed that military expenditure might not necessarily influence terrorism. This would mean that military expenditure might not be able to offset the negative influence of terrorism on the economy. The difference in findings in their study and ours is largely due to regional differences. And it suggests that the influence of military expenditure for counter-terrorism is heterogeneous.</p>
<h2>Conclusion</h2>
<p>We established three core findings. </p>
<p>The first is that there is an unconditional negative effect of terrorism on economic growth. </p>
<p>The second is that when terrorism interacts with military expenditure, the negative impact on economic growth fizzles out. </p>
<p>The third is that the net effect of the interaction of military expenditure and terrorism on economic growth depends on the proxy for terrorism. However, in both cases, the importance of military expenditure is established. </p>
<p>This means that, overall, military expenditure is a relevant policy variable in reducing the negative effect of terrorism on economic growth in Africa. </p>
<p>But there is also a need for an inclusive growth policies for African economies to increase the opportunity cost of terrorism.</p><img src="https://counter.theconversation.com/content/171010/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Chimere Iheonu is a final year PhD Candidate in Economics at the University of Nigeria, Nsukka and is affiliated with the Centre for the Study of the Economies of Africa, Abuja, Nigeria </span></em></p>Military expenditure is a relevant policy option in reducing the negative effect of terrorism on economic growth in Africa.Chimere Iheonu, PhD Candidate in Economics at the University of Nigeria, Nsukka, University of NigeriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1318562020-02-23T07:14:57Z2020-02-23T07:14:57ZAfrican countries aren’t getting as much as they should from foreign direct investment<figure><img src="https://images.theconversation.com/files/316270/original/file-20200219-11044-1ooq2qm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There has been a slide in the levels of foreign direct investment in Africa</span> <span class="attribution"><span class="source">Wikimedia Commons</span></span></figcaption></figure><p>Economic growth is driven by a number of factors. These include foreign direct investment, national savings, household spending, fiscal and monetary policies. Since the late 1980s African governments have fully embraced foreign direct investment as a major driver of growth. </p>
<p>One of the avenues through which countries have sought to attract more foreign direct investment has been investment summits. These are hosted jointly with developed countries. They include the <a href="https://www.odi.org/blogs/10674-focac-2018-what-expect-next-weeks-china-africa-summit">Africa-China Investment Summit</a>, <a href="https://www.un.org/africarenewal/news/first-uk-africa-investment-summit-signals-post-brexit-plans-continent">Africa-UK Investment Summit</a> and the <a href="https://www.businessghana.com/site/news/business/199915/2020-U-S-Africa-Business-Summit-to-be-Hosted-in-Morocco">Africa-US Investment Summit</a>.</p>
<p>Despite these efforts, <a href="https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf">data</a> shows that Africa has not been a major <a href="https://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS?locations=ZG">recipient</a> of these flows. In fact, it attracts a lot less than other developing countries. </p>
<p>There’s a bigger problem too – the impact on economic growth of the foreign direct investment the continent attracts is lower than other comparable parts of the world. In <a href="https://www.tandfonline.com/doi/full/10.1080/20430795.2019.1683504">our research</a> we set out to understand why. To do this, we looked at the financial services sector which is underdeveloped in most African countries.</p>
<h2>The search</h2>
<p>We examined <a href="https://www.tandfonline.com/doi/full/10.1080/20430795.2019.1683504">data</a> from 45 countries between 1980 and 2016. The variables we looked at included economic growth, foreign direct investment, financial sector development, human capital, government expenditure and gross fixed capital formation. </p>
<p>The countries were selected based on data availability. They comprised several countries from all the regional blocs, including six countries from Northern Africa.</p>
<p>Overall, the countinent’s financial sector is under-developed compared to other emerging economies, with the exception of South Africa which is relatively well-developed. The countries’ financial sectors are bank-based, thus providing limited space for the equity (capital) markets. </p>
<p>We sought to examine the relationship among three factors: foreign direct investment, economic growth, and financial sector development. Financial sector development measures a country’s financial institutions to make financial services available to citizens. It also includes the provision of finance to businesses.</p>
<p>There has been a lot of economic literature on the impact of foreign direct investment on economic growth. And there have been many <a href="https://www.researchgate.net/publication/266079304_FOREIGN_DIRECT_INVESTMENT_FINANCIAL_SECTOR_DEVELOPMENT_ECONOMIC_GROWTH_EMPIRICAL_EVIDENCE_ON_LINKS_FROM_GHANA_INTRODUCTION">studies</a> on the linkages between foreign direct investment, financial sectors and economic growth. But less has been done on the extent to which Africa’s financial sector is a conduit through which foreign direct investment drives economic growth.</p>
<p><a href="https://www.mdpi.com/1911-8074/12/4/176/pdf">Research</a> findings on the impact of foreign direct investment on a country’s economic growth are mixed. This implies that the extent of the impact is determined by other <a href="https://www.researchgate.net/publication/325657823_The_Impact_of_Foreign_Direct_Investment_on_Economic_Growth_a_Causal_Study_in_the_United_States">factors</a> and characteristics of a country’s economy. </p>
<p>That’s why we chose to look at how the financial sector, in particular its stage of development, can moderate the impact of foreign direct investment on economic growth.</p>
<h2>What attracts foreign direct investment</h2>
<p>For the most part, foreign direct investment inflows to Africa have generally been attributed to five factors. These are regulations (ease of doing business), the general investment climate, broader economic reforms, information communication and technology development, and improvements in infrastructure.</p>
<p>Foreign direct investment plays an important role in economic development. It provides financial resources, technological spillovers and improvement in human capital. These are all critical factors that can spur Africa’s economic development by addressing infrastructural deficits and reducing unemployment. </p>
<p>The effect of foreign direct investment on economic growth is well documented globally. Funds from foreign investors are channelled through a country’s financial system before being allocated to the targeted beneficiary of the investment. </p>
<p>In Africa’s case we <a href="https://www.tandfonline.com/doi/full/10.1080/20430795.2019.1683504">found</a> that the continent’s underdeveloped financial sector has dampened the impact of foreign direct investment on economic growth. </p>
<p>To measure financial sector development we calculated credit provided by the financial sector to the private sector as a percentage of GDP. On this measure, Africa’s financial sector fails to allocate financial resources effectively and efficiently to the productive sectors of the economy. </p>
<p>When the financial sector does allocate resources, it invests in risky projects. The net effect is that it hurts economic growth and therefore fails to support foreign direct investment.</p>
<h2>What’s to be done</h2>
<p>Foreign direct investment inflows to Africa are increasing, albeit marginally. What our study shows is that African governments need to spend more effort on maximising the impact of foreign direct investment on economic growth. This is over and above current efforts to gain a bigger share of global foreign direct investment flows. Failure to raise the impact of foreign direct investment on economic growth will mean that African countries will not fully benefit from higher inflows.</p>
<p>Improving the performance of the financial sector should be one of the major preoccupations of African policymakers. This should include regulators improving their supervisory roles. And they should strengthen the financial sector’s ability to allocate resources effectively to the productive sectors of the economy. Improvements in corporate governance and risk management strategies would also help.</p>
<p><em>This article was co-authored with Abraham Mensah Acquah. He holds BA (Integrated Business Studies) and a Master of Commerce degree in Banking and Finance from the School of Business and Law, University for Development Studies, Wa, Ghana.</em></p><img src="https://counter.theconversation.com/content/131856/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Muazu Ibrahim works for the Department of Banking and Finance, School of Business and Law (SBL), University for Development Studies (UDS), Wa, Ghana.</span></em></p>African governments need to spend more effort on maximising the impact of foreign direct investment on economic growthMuazu Ibrahim, Lecturer, Department of Banking and Finance, University for Development StudiesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1198272019-07-05T13:47:49Z2019-07-05T13:47:49ZWhy the African Monetary Fund is a good idea and what can be done to get it going<figure><img src="https://images.theconversation.com/files/282653/original/file-20190704-51284-s1lcmc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Africa has tried for decades to develop robust intra-regional trade. Free trade agreement is the most recent effort </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>African Union (AU) leaders will gather in Niger on 7 July for an Extraordinary Summit to discuss the <a href="https://au.int/en/cfta">African Continental Free Trade Area</a>. They will be meeting at a <a href="https://www.worldbank.org/en/region/afr/publication/taking-the-pulse-of-africas-economy">critical moment</a> for the continent. Many African countries are experiencing uneven growth and rising debt. All face an uncertain global environment and need the boost that closer and more dynamic continental trade relations could deliver.</p>
<p>In our view the AU leaders should also use their meeting to reinvigorate their efforts to create an <a href="https://au.int/en/treaties/protocol-establishment-african-monetary-fund">African Monetary Fund</a>. This would be used to encourage African states to engage more actively in regional trade by offering them financial support for managing the <a href="https://www.imf.org/external/pubs/ft/fandd/2018/09/sub-saharan-africa-regional-integration-arizala.htm">risks</a> associated with closer regional integration and expanded intra-regional trade.</p>
<p>Over the past 10 years, most regions have developed <a href="https://www.bis.org/review/r120203d.pdf">regional arrangements</a> that can supplement the help that the IMF provides to countries facing balance of payments problems. Ten years ago, US$100 billion was available through these regional funds. Today more than <a href="https://onlinelibrary.wiley.com/doi/10.1111/dech.12464">US$900 billion</a> is available through these arrangements. Africa is currently the most prominent gap in the <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2692622">evolving global financial safety net</a>. </p>
<p>The African leaders signed a treaty to establish this fund in 2014. Unfortunately, progress to set it up has stalled. So far the treaty has been signed, but not ratified, by eleven AU member countries. Fifteen must sign and ratify the statutes for the fund to become operational. Once operational, it will have a capital subscription of up to US $22.64 billion and the ability to provide member countries with loans equivalent to two times their contributions to the Fund’s capital.</p>
<h2>Managing the ripple effects</h2>
<p>The free trade area offers states new growth and employment opportunities. But by increasing economic linkages between African states, it could also increase the risk that economic problems in one country can spill over and have a strongly negative effect on growth, trade, investment and employment in others. For example, both positive and negative developments in the US economy will have a powerful impact on Canada and Mexico.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/more-work-lies-ahead-to-make-africas-new-free-trade-area-succeed-118135">More work lies ahead to make Africa's new free trade area succeed</a>
</strong>
</em>
</p>
<hr>
<p>To help mitigate these effects, participants in other regional trade arrangements have established regional financial arrangements. These provide financial support to their members to manage balance of payments crises. </p>
<p>The <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2128437">evidence</a> suggests that when states have access to this type of financial support they are less likely to take actions that impede intra-regional trade flows. <a href="https://papers.ssrn.com/abstract=2128437">For example</a>, the Latin American Reserve Fund, which provides its members with financial support during balance of payments crises, has helped the recipient countries to maintain their intra-regional trade arrangements. This, in turn, has reduced the risk that the recipient’s problems would cause a crisis in its neighbours.</p>
<p>The failure of an adequate number of states to sign and ratify the African Monetary Fund treaty is an embarrassing challenge to the credibility of the AU’s efforts to promote a more integrated, dynamic, sustainable and equitable African economy. These efforts have been going on for more than 40 years. Steps along the way have included the former Organisation of African Unity’s Lagos Plan of Action for Economic Development of Africa <a href="https://www.jstor.org/stable/745620?seq=3#metadata_info_tab_contents">signed in 1980</a> and the Abuja Treaty <a href="http://repository.uneca.org/bitstream/handle/10855/3000/Bib-24781.pdf?sequence=3">signed in 1991</a>.</p>
<p>In a <a href="http://www.bu.edu/gdp/2019/07/03/july-2019-summit-of-the-african-union-jump-starting-the-african-monetary-fund/">policy brief</a> published by the Centre for Human Rights at the University of Pretoria and the Global Development Policy Center at Boston University, we propose three concrete steps to jumpstart the push for the fund. </p>
<h2>Action plan</h2>
<p>First, the creation of the fund must be explicitly linked to the success of the free trade area. The AU leaders can do this by making the case that, just as has happened in other regions, the presence of a regional financial arrangement will support the efforts to boost intra-regional trade in Africa. It will help participating countries mitigate the balance of payments challenges that greater regional integration may cause. </p>
<p>Moreover, the fund, by quickly providing its members with financial support, can offer them more time to negotiate a larger support package with richer institutions, such as the IMF. In this regard, it should be noted that eight of the AU member countries (Cape Verde, Comores, Djibouti, Eritrea, Guinea-Bissau, Sao Tome and Principe, Seychelles, and Somalia) will be able to borrow more resources from the AMF than the IMF. </p>
<p>Second, one AU member state should become the champion for the fund. This country would become the first country to sign and ratify the fund treaty. It would lobby other AU member countries to ratify the African Monetary Fund. It would advocate for the AU to reconstitute the steering committee created in the treaty and provide it with adequate resources. Since Cameroon is the designated host country for the AMF’s headquarters, it has an incentive to be a champion for the institution.</p>
<p>Finally, the steering committee should develop a plan for overcoming the substantial resource constraints in the region. This will require balancing the fund’s need for sufficient resources to be credible with the limited ability of some states to contribute. This could be addressed by negotiating an arrangement in which richer regional countries and institutions contribute a disproportionate share of their capital contributions up-front. </p>
<p>These additional contributions will be reimbursed as poorer countries make their capital contributions. It’s important to note that the AMF Board of Governors has the authority to extend the period for a country to make its contribution for up to eight years. To further incentivise small to medium sized member countries to contribute capital, they should be allowed to treat their capital contributions as part of their international reserves. Such an arrangement is not unprecedented and was used effectively in South America. These measures would make an implementation plan more feasible.</p>
<p>Africa has tried valiantly for decades to overcome the substantial challenges hindering the development of robust intra-regional trade. The free trade area agreement is the most recent of these efforts. The credibility of the continent’s leaders and institutions will be influenced by its success or failure. The establishment of the African Monetary Fund would demonstrate the continent’s determination to promote intra-regional trade and development.</p>
<p><em>Hadiza Gagara Dagah is a co-author of the policy brief, <a href="http://www.bu.edu/gdp/2019/07/03/july-2019-summit-of-the-african-union-jump-starting-the-african-monetary-fund/">Jump-starting the African Monetary Fund </a>, on which this article is based.</em></p><img src="https://counter.theconversation.com/content/119827/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Bradlow's SARCHI chair receives funding from the National Research Foundation</span></em></p><p class="fine-print"><em><span>William N Kring is a co-grantee of the Japan Foundation Center for Global Partnership for a project on regional financial arrangements and surveillance. The grant covers regional financial arrangements in general, but not the African Monetary Fund specifically. </span></em></p>Now that African countries have signed up for the continental free trade agreement, they must complete the institutional loop by jumpstarting the creation of the African Monetary Fund.Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of PretoriaWilliam N Kring, Assistant Director, Global Development Policy Center, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1120852019-02-20T12:28:40Z2019-02-20T12:28:40ZWhy opposing the man Trump wants as head of the World Bank might just work<figure><img src="https://images.theconversation.com/files/259901/original/file-20190220-148545-1lshao2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The race is on to find a new head of the World Bank following Jim Yong Kim's resignation. </span> <span class="attribution"><span class="source">EPA-EFE/Made Nagi</span></span></figcaption></figure><p>US President Donald Trump’s nomination of his Treasury Undersecretary <a href="https://home.treasury.gov/about/general-information/officials/david-malpass">David Malpass</a> to become President of the World Bank Group and CEO of the <a href="https://www.devex.com/news/a-primer-on-the-world-bank-president-selection-process-94111">World Bank </a> should be seen more as an opportunity than a problem by African leaders and other major borrowers.</p>
<p>By one scenario the US could still secure a majority vote for their nominee, as they have in every Bank presidential election since the institution’s <a href="http://theconversation.com/world-bank-president-list-of-reforms-african-states-should-be-demanding-110106">founding in 1944</a>. But this shouldn’t be viewed as cast in stone given how threadbare previously staunch relationships have become, mainly due to Trump’s erratic behaviour. Even the US’s European allies, including Germany’s Chancellor Angela Merkel, have shown a willingness to publicly criticise Trump and his policies in ways not heard <a href="https://www.nytimes.com/2019/02/16/world/europe/merkel-speech-munich.html">since World War II</a>. </p>
<p>Added to this are concerns about Trump’s misguided views – shared by Malpass – that multilateral institutions are hostile to US interests. As New York Council on Foreign Relations expert Stewart Patrick argues, Malpass’s appointment could undermine the Bank’s invaluable work <a href="https://www.cfr.org/blog/how-not-choose-world-bank-president">around the globe</a>. </p>
<p>So, could his nomination be blocked and how?</p>
<p>There are four reasons why opposing Trump’s nominee may be easier than it first appears.</p>
<h2>Opposing Trump’s choice</h2>
<p>The first reason is that Trump may not survive in office much longer. His polling numbers remain at <a href="https://www.politico.com/story/2019/02/05/trump-poll-2020-elections-1146160">historic lows</a>. His legal problems <a href="https://www.washingtonpost.com/opinions/2019/01/21/trumps-corruption-keeps-getting-more-obvious/?utm_term=.f3ac5d118ae8">continue to escalate</a> and evident to voters. And with the Democrats <a href="https://www.vox.com/2019/1/3/18165728/new-congress-2019-democrats-government-shutdown">now in control</a> of the US House of Representatives, they have subpoena powers to investigate allegations of Trump’s illicit actions and conflicts of interest, adding to his <a href="https://www.bloomberg.com/news/articles/2018-11-07/democrats-biggest-gain-is-subpoena-power-to-quiz-trump-aides">political vulnerabilities</a>.</p>
<p>Secondly, reforms in nominating and appointing Bank presidents in 2011 opened up the process for the first time in 2012. Then there were <a href="https://www.bbc.com/news/business-17490997">three finalists</a> - Nigerian Ngozi Okonjo-Iweala, Columbian Jose Antonio Ocampo and US candidate Jim Yong Kim.</p>
<p>In the end <a href="https://live.worldbank.org/experts/jim-yong-kim">Kim got the job</a> on the back of then President Barack Obama’s nomination. It’s useful to note that both Kim and Obama enjoyed far more international support than Malpass and Trump today.</p>
<p>Thirdly, an important precedent was set last year when Trump’s candidate to head the Bank’s International Organisation for Migration was <a href="http://time.com/5326783/the-united-nations-rejected-president-trumps-pick-for-a-migration-group/">rejected</a> by United Nations (UN) members. The main reason was that his anti-Muslim statements were judged antithetical to its policies of inclusion. It was an unprecedented rejection – the office had been led by Americans since the 1960s.</p>
<p>Rejecting Malpass would be a second victory for those who believe all senior world leadership posts should be decided on merit and more inclusive representation.</p>
<p>The last reason that there’s hope in rejecting Malpass is that the power dynamics in the bank have changed dramatically in the last nearly 80 years. The US has always justified its power to select the president on the grounds that it was the bank’s largest shareholder.</p>
<p>This was true when the bank began operations in the 1940s. Then the US held <a href="https://www.bloomberg.com/news/articles/2014-04-14/the-imf-and-world-bank-are-more-democratic-than-they-look">35.07% among just 38 members</a>. Today, the bank belongs to 193 countries and the US voting share is <a href="http://www.worldbank.org/en/about/leadership/votingpowers">15.98%</a>. </p>
<p>Nevertheless, denying the US a voting majority is challenging. The president of the bank is selected by 25 directors, most representing regional groups. America’s traditional allies, UK, France, Germany and Japan control 18.48% and there is a long-running understanding that for their support of America’s candidates for the bank, the <a href="https://theconversation.com/world-bank-president-list-of-reforms-african-states-should-be-demanding-110106">US will reciprocate</a> by supporting a European to head the International Monetary Fund. </p>
<p>But this is no longer necessarily a fail-safe for America. Trump has tense relations with many US allies. And directors representing groups of African, Latin American and Asian countries may find majorities of their members willing to oppose the US. </p>
<p>Voting scenarios suggest blocking Malpass is politically possible. But, to pull it off would require positive, deliberative and inclusive action.</p>
<h2>Nominations</h2>
<p>The nominations period began on 7 February and close on 14 March. Malpass was the first entry, with Trump presumably hoping to discourage competition. With just weeks remaining, any member who wants to nominate one of their nationals should be encouraged to do so.</p>
<p>Names of potential candidates already raised in media reports include <a href="https://www.cgdev.org/expert/donald-kaberuka">Donald Kaberuka of Rwanda</a>, <a href="https://live.worldbank.org/experts/sri-mulyani-indrawati">Sri Mulyani Indrawati</a> of Indonesia. Others are 2012 finalists, Ocampo and <a href="https://theconversation.com/the-world-bank-needs-deep-reforms-to-reflect-a-changing-world-order-111366">Okonjo-Iweala</a>. Others deserving consideration from Africa, Asia and Latin America might well be waiting in the wings.</p>
<p>The US is likely to argue that to ensure a smooth transition, a new president should be named prior to the <a href="https://www.worldbank.org/en/meetings/splash/spring">9-14 April 2019 annual meeting</a> of World Bank members in Washington. </p>
<p>But this is no longer an issue. Under the 2011 reforms there is now an interim president, the highly regarded <a href="http://www.worldbank.org/en/about/people/k/kristalina-georgieva">Kristalina Georgieva of Bulgaria</a>. She is fully capable of managing the bank while all candidates are carefully vetted for their personal integrity and professional achievements. </p>
<p>The search for a new head of the bank should also allow for input from the many large national and international civil society organisations that are its vital partners. </p>
<h2>A leader the World Bank needs</h2>
<p>Malpass need not be denigrated, notwithstanding his <a href="https://theconversation.com/a-trump-aligned-world-bank-may-be-bad-for-climate-action-and-trade-but-good-for-chinese-ambitions-110265">negative views of multilateralism</a> and lack of any positive agenda for the World Bank. What’s more important is that a consensus candidate is found who has the necessary skills and practical ideas for the bank to better support much needed programmes in Africa and other countries.</p>
<p>There are also huge infrastructure needs the bank can address. And it needs quick response capabilities to help countries cope with sudden natural disasters and pandemics.</p>
<p>If a search driven by these concerns succeeds, then bank supporters can thank Trump for unwittingly encouraging their efforts.</p><img src="https://counter.theconversation.com/content/112085/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John J Stremlau is a Visiting Professor in International Relations at Wits University. In 1988/1989 he was employed by the World Bank as a member of its Strategic Planning Division. </span></em></p>The power dynamics in the World Bank have changed dramatically.John J Stremlau, Visiting Professor of International Relations, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1049632018-10-17T11:43:03Z2018-10-17T11:43:03ZWhy the World Bank’s optimism about global poverty misses the point<figure><img src="https://images.theconversation.com/files/240995/original/file-20181017-41153-1bv35dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A different measure of poverty shows 70% of the world's poor live in what the World Bank considers middle-income countries. </span> <span class="attribution"><span class="source">EFE-EPA/Onome Oghene</span></span></figcaption></figure><p>The World Bank’s latest annual report on <a href="http://www.worldbank.org/en/publication/poverty-and-shared-prosperity?cid=EXT_WBSocialShare_EXT&ogImage=http%3A%2F%2Fwww.worldbank.org%2Fcontent%2Fdam%2Fphotos%2F780x439%2F2018%2Foct-1%2FEPD2.png">poverty and shared prosperity</a> has an unsurprisingly positive message that only 10% of the world’s population lived in extreme poverty in 2015, which is the most recent year that available data allows for global poverty estimates to be made. </p>
<p>As World Bank President Jim Yong Kim points out in the foreword to the report, this is “the lowest poverty rate in recorded history”. </p>
<p>This is a story that we have become accustomed to hearing from the Bank, and other significant participants in the debate about poverty and development in the global South (Asia, Africa, and Latin America). But does the story actually hold true? For example, the World Bank measures extreme poverty in terms of the number of people who live on less than USD$1.90 a day. But is this in fact a meaningful measurement of poverty? </p>
<p>World Bank poverty estimates have come in for a lot of criticism. For example, Jason Hickel, an anthropologist at the London School of Economics, <a href="https://www.penguin.co.uk/books/111/1113531/the-divide/9781786090034.html">has pointed out</a> that there’s often a large gap between national poverty lines and the international poverty line stipulated by the bank. </p>
<p>For example, more than 55% of South Africa’s population lives below the country’s upper poverty line, of R1,138 (USD$80) a month. But, according to the World Bank, only 18.85% of the South African population lives in poverty. This suggests that the international poverty lined touted by the World Bank systematically underestimates the extent of global poverty.</p>
<p>This point is partially acknowledged in this year’s report. Accordingly, the World Bank proposes new and higher poverty lines - USD$3.20 and USD$5.50 a day, respectively. According to the report, almost half the world’s population lives below the USD $5.50 a day poverty line. However, we need to go further than this – indeed, the World Bank’s widely touted story of historically low poverty levels must be rejected.</p>
<p>If we are to have a serious debate about world poverty on <a href="http://www.un.org/en/events/povertyday/">End Poverty Day</a>, we have to start by acknowledging that the global problem of poverty is far more extensive than World Bank rhetoric would have us believe. Two big factors need to be confronted. The first is that the majority of the world’s poor live in countries that have experienced strong economic growth. The second is that the growth strategies these countries have practised create and reproduce poverty. </p>
<h2>Unequal distribution</h2>
<p>The World Bank attributes the supposed historical decline in poverty in large part to the rising wealth of several Asian countries. But, this is a problematic argument. In his recent book <a href="https://global.oup.com/academic/product/global-poverty-9780198703525?cc=za&lang=en&">Global Poverty</a>, development economist Andy Sumner shows how a new geography of poverty has emerged in the global South.</p>
<p>Whether we use monetary estimates – Sumner uses a poverty line of $2.50 a day – or estimates of multidimensional poverty; that is, poverty measured according to health indicators, education levels, and economic standards of living – as many as 70% of the world’s poor currently live in what the World Bank refers to as middle-income countries. </p>
<p>As Sumner points out, poverty in middle-income countries cannot be attributed to an absolute lack of resources. These are countries that have experienced strong economic growth since the 1990s. What it boils down to in middle-income countries like <a href="https://edition.cnn.com/2018/06/26/africa/nigeria-overtakes-india-extreme-poverty-intl/index.html">India</a>,<a href="https://theconversation.com/beating-poverty-needs-partnerships-and-collaboration-not-just-money-101145">Nigeria</a>, and <a href="https://www.theglobeandmail.com/news/world/the-illusion-of-brazils-incomeequality/article37536515/">Brazil</a> is the issue of distribution. </p>
<p>The economic growth that has lifted countries from low-income status to middle-income status is profoundly unequally distributed. As a result, large parts of the populations in these countries are excluded from the benefits that accrue from this growth.</p>
<p>This in turn has implications for how we think about growth strategies and poverty reduction in the global South.</p>
<h2>Global growth and development</h2>
<p>Much of the economic growth that has lifted countries from low-income status to middle-income status has resulted from the emergence of global production networks and global value chains since the late 1970s. Poorer countries have been integrated into these networks in large part due to their large reservoirs of cheap labour. It is this process of industrialisation that has turned low-income countries into middle-income countries. </p>
<p>But if global production networks come with so many developmental benefits, why is it that world poverty is concentrated in countries that have experienced economic growth precisely because they are integrated in these networks? To understand this paradox, it is important to remember that global production networks are comprised of different value tiers, and that different countries and different groups capture different amounts of the value that is created in these networks.</p>
<p>This obviously leads to a <a href="https://www.cambridge.org/core/journals/review-of-international-studies/article/poverty-reduction-through-liberalisation-neoliberalism-and-the-myth-of-global-convergence/FAC3F9EDA9C6B87938804D260B795412">reproduction of inequality</a> – countries in the global South tend to be integrated in lower value tiers. </p>
<p>This is evident in the fact that the distribution of national incomes and wealth at a world scale is still characterised by a pronounced North-South hierarchy. But it is more important still to be aware that countries in the global South that have witnessed strong economic growth have also experienced marked escalations in national levels of inequality. In India in 2016, for example, the richest 10% of the population received 55% of all income. This is an increase of <a href="https://www.aljazeera.com/indepth/opinion/india-wealth-inequality-growing-rapidly-180125084201143.html">more than 20% since 1980</a>.</p>
<p>This pattern of development clearly shows how poverty is a matter of distribution that is related to the kind of employment opportunities that are created when southern countries are embedded in global value chains. The factory jobs that are established when transnational corporations set up shop in countries like Mexico or Vietnam are fundamentally precarious. And it is precarious workers who capture the least of the value that is created in global production networks. This is why <a href="https://www.plutobooks.com/9780745335995/southern-insurgency/">precarious workers live in poverty</a> in middle-income countries in the global South.</p>
<p>What’s clear from this is that we have to ask ourselves what a development policy based on redistribution in favour of the working classes in the global South might look like – because that, ultimately, is the key to ending poverty in an unequal world.</p><img src="https://counter.theconversation.com/content/104963/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alf Gunvald Nilsen receives funding from the Research Council of Norway. </span></em></p>The global poverty plot is thicker than what the World Bank would have us believe.Alf Gunvald Nilsen, Associate Professor of Development Studies, University of AgderLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/962312018-05-13T08:38:39Z2018-05-13T08:38:39ZCountries must compete for migrant workers to boost their economies<figure><img src="https://images.theconversation.com/files/218070/original/file-20180508-34027-z7qbl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Instead of keeping migrants out, countries should consider the economic benefits of letting them in.</span> <span class="attribution"><span class="source">Zoltan Major/Shutterstock</span></span></figcaption></figure><p>Politicians and the media expend inordinate amounts of energy debating migration, often using nativist, populist and xenophobic rhetoric. This is despite the fact that, as of 2017, only three out of every 100 people – a <a href="https://www.un.org/development/desa/publications/international-migration-report-2017.html">mere 3.4%</a> of the world’s population – have left their home nations to migrate to a new country. </p>
<p>The message from people like US President Donald Trump and the UK’s “Brexiteers” is that migrants should be kept out at all costs to “save” their economies. Yet many scholars have argued that attracting and keeping migrants is <a href="https://theconversation.com/australia-is-at-risk-of-losing-migrants-who-are-vital-to-the-health-of-our-economy-67455">essential to economic competitiveness</a> in a globalising world. Some countries are responding positively to such arguments, embracing the benefits migrants can offer to their economies. Others – African countries among them – are far behind the curve.</p>
<p>Many developing countries are immigrant-sending countries which can have some negative effects. In 2017, <a href="https://www.un.org/development/desa/publications/international-migration-report-2017.html">74% of all immigrants</a> were of working age. It makes sense that losing this vital demographic can damage a country’s economy – and that gaining these workers can help grow another’s. This is borne out by history, too: in the 19th century, migrant-receiving countries like the US grew faster than migrant-sending countries like Italy and Ireland because these migrants added to their host country’s workforce and left their home countries with fewer workers.</p>
<p>In <a href="https://read.dukeupress.edu/public-culture/article-abstract/29/2%20(82)/261/31081/Frontier-Heritage-Migration-in-the-Global-Ethnic">my research</a> on migration I have found that countries like Vietnam, India and China are actively trying to recruit people from their diasporas – those living outside the region where they or their ancestors were born – to help build their economies.</p>
<p>My research focuses on frontier migration: the movement of people, technology, ideas and capital from a “developed” to a “developing” economy. Among them are increasing numbers of frontier return migrants who were born and raised in one country, leave it for some time but are now opting to return home. Researchers used to assume that once people migrated to the West, they and their children would stay there. But this is increasingly not the case. Another category I focus on are frontier heritage migrants; those raised in the diaspora who return to the land of their ethnic heritage. </p>
<p>Globalisation has spurred increasing numbers of all types of frontier migrants. One of the unexpected consequences is that developed countries might lose out as more and more frontier migrants set their sights on emerging market economies.</p>
<h2>The US is losing out</h2>
<p>The world’s most powerful country and its <a href="https://www.weforum.org/agenda/2017/03/worlds-biggest-economies-in-2017/">largest economy</a>, the US, was until recently known as a country of immigrants. </p>
<p>Since 2017, the Trump administration has championed a number of measures to keep immigrants and refugees out: building a wall on the country’s southern border with Mexico, limiting refugees and even deleting the phrase, “nation of immigrants” from <a href="https://www.npr.org/sections/thetwo-way/2018/02/22/588097749/america-no-longer-a-nation-of-immigrants-uscis-says">an official mission statement</a>. But this shift didn’t begin with Trump: it started <a href="https://abcnews.go.com/ABC_Univision/News/ways-immigration-system-changed-911/story?id=17231590">in earnest</a> after the events of 11 September, 2001. </p>
<p>Migration and tech researcher Vivek Wadhwa <a href="http://issues.org/25-3/wadhwa-2/">has warned</a> for years that putting up barriers to immigration will reduce the US’s innovative, technological and economic edge. After all, many US businesses are started by immigrants, and just over half of the country’s one billion dollar startup companies had <a href="http://nfap.com/wp-content/uploads/2016/03/Immigrants-and-Billion-Dollar-Startups.NFAP-Policy-Brief.March-2016.pdf">at least one immigrant founder</a>.</p>
<p>Wadwha’s <a href="https://www.cfr.org/content/thinktank/Wadhwa_Presentation.pdf">research</a> among STEM (science, technology, engineering, mathematics) graduate students who came to the US to study for advanced degrees revealed alarming shifts. Before 2001, most of these sorts of graduates would remain in the US after completing their degrees. After 2001, hostile immigration policies “pushed” them to become frontier return migrants, going home to countries like India and China. </p>
<p>The US was forced to <a href="http://www.pewglobal.org/2018/05/10/number-of-foreign-college-students-staying-and-working-in-u-s-after-graduation-surges/?utm_source=Pew+Research+Center&utm_campaign=e692facc96-EMAIL_CAMPAIGN_2018_05_10&utm_medium=email&utm_term=0_3e953b9b70-e692facc96-400347641">change policy</a> to counter the trend towards STEM students’ return migration. </p>
<p>India and China, meanwhile, have also realised the value of attracting their own diasporas back home, and drawing talent from elsewhere in the world. They’ve developed several <a href="https://read.dukeupress.edu/public-culture/article/29/2%20(82)/261/31081/Frontier-Heritage-Migration-in-the-Global-Ethnic">new policies</a> to make this easier.</p>
<p>For example, China recently changed its <a href="http://www.chinadaily.com.cn/a/201801/23/WS5a668664a3106e7dcc135dfb.html">visa policy</a> so that “overseas Chinese” can have multiple-entry visas valid for five years instead of just one. <a href="http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-beijing/documents/publication/wcms_565474.pdf">A number of other initiatives</a> have also been introduced to entice skilled migrants to China.</p>
<p><a href="http://time.com/5107485/baidus-robin-li-helping-china-win-21st-century/">Robin Li</a>, the billionaire entrepreneur behind the internet company Baidu – often referred to as China’s Google – is one of those who’ve pointed out that the US’s loss could be his country’s gain, <a href="https://edition.cnn.com/videos/world/2017/04/28/talk-asia-robin-li-block-a.cnn">saying</a></p>
<blockquote>
<p>this is a good time that China stand up and say, ‘Hey, come to us, we welcome immigrants…’</p>
</blockquote>
<p>China and the US are in a battle over which nation will dominate the 21st-century technologically and immigration is at the heart of this battle. </p>
<p>However, it is not only technology migrants who add value to an economy. Workers with all different skill sets are necessary. For example, US agriculture <a href="http://www.latimes.com/projects/la-fi-farms-immigration/">largely relies</a> on foreign workers and Japan, a highly industrialised country with an ageing population, will need to bring in more and more young foreign workers <a href="https://www.japantimes.co.jp/news/2017/12/31/national/japans-need-foreign-labor-get-dire-2050-nears/">to survive</a>.</p>
<h2>Policy benefits for Africa?</h2>
<p>African countries are not seizing the opportunity presented by the migration-economic nexus. </p>
<p>Only a handful of African countries – among them <a href="https://www.liberianobserver.com/news/we-must-integrate-the-diaspora-in-our-policies-on-migration/">Liberia</a> and <a href="https://www.pri.org/stories/2017-05-17/west-shuts-out-migrants-ethiopias-doors-are-open-even-its-enemy">Ethiopia</a> – have actively worked to bring in more migrants. </p>
<p>I have found that people in general and people of African descent in particular, both in Africa and the West, are particularly interested in moving to South Africa to work. This is because South Africa has a well-developed infrastructure and offers what many migrants refer to as “lifestyle” – a good quality of life. </p>
<p>South Africa is trying to position itself as the gateway to the African continent and needs a strong economy to do so. The country would therefore benefit tremendously from a more migrant-welcoming policy. </p>
<p>Building a robust economy has always required migrant workers of all types. That’s not going to change any time soon. The country with the most open immigration policy will be best positioned to succeed in the global economy.</p><img src="https://counter.theconversation.com/content/96231/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Melissa Tandiwe Myambo does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Many scholars argue that attracting migrants is essential to economic competitiveness in a globalising world.Melissa Tandiwe Myambo, Research Associate, Centre for Indian Studies, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/880572017-11-24T13:44:33Z2017-11-24T13:44:33ZFour things Zimbabwe can do to recover from the Mugabe era<p>Long in coming but swift and relatively painless when it happened, <a href="https://theconversation.com/will-mnangagwa-usher-in-a-new-democracy-the-view-from-zimbabwe-88023">the downfall of Robert Mugabe</a> offers Zimbabwe a once-in-a-generation opportunity to recalibrate its hitherto dire trajectory. The transition comes with myriad challenges and opportunities, the handling of which will ultimately determine what direction the country takes. Here are four key ways that the new president, Emmerson Mnangagwa, can get it right.</p>
<h2>1. Strike a new political settlement</h2>
<p>The lesson of Zimbabwe’s past 20 years is that a toxic political environment is a severe impediment to the economic development. Political risks create uncertainty and keep sorely needed investment away. A key priority must therefore be the creation of a more inclusive political settlement. When the time came, Zimbabweans from all walks of life were ready to come out and clamour for a fresh start – their “ideals” clearly unified them and need to be harnessed to something concrete out of them.</p>
<p>Some of the provisions needed to do this are already in the constitution, and simply unimplemented. Others, however, need to be negotiated within and among all political actors. Equally, it’s important Zimbabwe doesn’t rush into new elections, but instead creates the conditions necessary for free, credible and fair ones in the future. Properly managed elections are not a magic wand, but they will go a long way in reducing the socio-economic costs of political risks associated with instability.</p>
<h2>2. Reduce poverty and promote inclusive growth</h2>
<p>Zimbabwe has never fully recovered from the <a href="https://www.csmonitor.com/World/Africa/2008/0325/p06s02-woaf.html">economic crisis</a> that peaked in 2008. <a href="https://www.gfmag.com/global-data/country-data/zimbabwe-gdp-country-report">GDP growth</a> rebounded to 11.9% in 2011, but declined to an estimated -2.5% by 2017. Formal sector jobs have shrunk significantly over the last two decades. A 2015 report showed that of the 6.3m people defined as employed, 94.5% were working in the informal economy, 4.16m of them as smallholder farmers. The formal sector, meanwhile, accounts for just 350,000 people. </p>
<p>This means a majority of Zimbabweans can be classified as “working poor”, doing precarious work with irregular incomes in agriculture and the informal sector. Poverty levels remain high: <a href="https://reliefweb.int/report/zimbabwe/zimbabwe-humanitarian-needs-overview-2016">around 72% of Zimbabweans now living in chronic poverty</a>. The challenge is to generate national and individual wealth, while also making sure a lot more people benefit from growth than have done over the past two decades. </p>
<p>Currently, the service sector contributes the most to GDP. While mining and the service sector have earned the country much-needed foreign currency and contributed significantly to GDP growth, they can only do so much alleviate poverty in a country where a majority of people still live off the land.</p>
<h2>3. Make agriculture work</h2>
<p>To start reducing poverty as soon as possible, the government needs to get the agricultural sector working again. </p>
<p>When agriculture does well in Zimbabwe, the <a href="https://www.theindependent.co.zw/2017/09/29/creating-100bn-economy-possible/">knock-on effect</a> is remarkable. It not only raises rural incomes (thereby reducing poverty) but also creates more manufacturing jobs in the cities and small towns as the “agriculture-induced” demand for goods and services rises. It also expands the tax base and enables Zimbabweans sitting on productive assets to contribute to building the economy.</p>
<p>The good news is that, while other sectors of the economy will take more time to develop, this is one area that can provide some quick returns. Productivity needs to keep rising and support must be provided for people who have access to farmland, but are currently too poor to use it effectively.</p>
<p>Getting agriculture to work ought to be a core priority. Given the nature of structural changes (particularly the emergence of opportunities through global value chains) a key starting point must be an agricultural review commission to investigate current conditions for smallholder agriculture and recommend new policies required to transform in the sector.</p>
<h2>4. Unlock investment</h2>
<p>With <a href="https://issafrica.org/country-file-zimbabwe/natural-resources-and-environment">abundant natural resources</a> and a <a href="https://africacheck.org/reports/is-zimbabwes-adult-literacy-rate-the-highest-in-africa/">relatively literate population</a>, Zimbabwe is well-placed to attract a large share of the investment being <a href="http://www.smesouthafrica.co.za/15400/Why-more-SA-companies-are-investing-in-the-rest-of-Africa/">funnelled through South Africa</a> into the rest of the continent. </p>
<p>The country’s mining industry, for one, has already proven its capacity to attract investment, provided global commodity prices <a href="http://www.worldbank.org/en/news/press-release/2017/10/26/commodity-prices-likely-to-rise-further-in-2018-world-bank">recover as expected</a>. But even then, that will depend upon cleaning up Zimbabwe’s toxic political environment and <a href="http://www.thezimbabwenewslive.com/business-15905-zimbabwe-trust-breaks.html">confused policymaking</a>, both of which increase costs for investors. </p>
<p>The country could also benefit from opportunities in the emerging digital economy, but again, this will mean prioritising and maintaining investment in bureaucracy and infrastructure.</p>
<p>All this will require huge sums of money, which the government may not have at the moment. Still, perhaps this new beginning is at least an opportunity for constructive dialogue with the donor community, something Zimbabwe struggled to manage while Mugabe was at the helm. If Zimbabwe gets the politics right, there is every reason to be optimistic that this promising country will flourish at last.</p><img src="https://counter.theconversation.com/content/88057/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Admos Chimhowu currently holds an ESRC Strategic Network Grant (grant number ES/P007406/1) looking at how countries are planning for sustainable development</span></em></p>Zimbabwe has two lost decades to move on from. Fortunately, there are many ways out.Admos Chimhowu, Senior Lecturer, Global Development Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/811152017-09-05T14:43:59Z2017-09-05T14:43:59ZWhy China’s audacious building plans could be a major strain on African economies<figure><img src="https://images.theconversation.com/files/184714/original/file-20170905-32271-1nu9tn6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A delicate building balance.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/africa-237179995?src=tfOhkIOkmThx4O3I0PULug-1-2">Shutterstock</a></span></figcaption></figure><p>It has been described by Chinese president Xi Jinping as the <a href="http://www.thestandard.com.hk/section-news.php?id=182837">“project of the century”</a>. And the <a href="https://eng.yidaiyilu.gov.cn/qwyw/rdxw/25999.htm">One Belt One Road</a> (OBOR) initiative is certainly ambitious. A massive infrastructural development program that will potentially span 60 countries, and cost <a href="https://www.pwc.com/gx/en/growth-markets-center/assets/pdf/china-new-silk-route.pdf">an estimated US$5 trillion</a>, it will mean building new rail networks, roadways, and pipelines across Asia, Europe, and Africa.</p>
<p>First proposed in 2013, <a href="https://theconversation.com/the-belt-and-road-initiative-chinas-vision-for-globalisation-beijing-style-77705">OBOR</a> is the latest in a line of projects designed to increase China’s economic reach. Though its scale is unprecedented, OBOR’s basic objective is the geographical expansion of Chinese capitalism. </p>
<p>The initiative is part of a massive restructuring of the Chinese economy as the country seeks to move from a “newly-industrialised” economy to a “fully-developed” one. The old drivers of development such as low wage, low-end export manufacturing have been wildly successful. But the system has essentially run its course. Overproduction and cyclical crises have led to <a href="http://www.iberchina.org/files/2016/TWQ_Fall2016_Shambaugh.pdf">social and economic problems</a> such as unemployment, increasing income disparity, and an overheated housing market. </p>
<p>Simply put, capital accumulation and expansion under the old export-oriented model is no longer sustainable. The Chinese economy needs to move towards the production of higher value goods, an expanded services sector, and increased domestic consumption.</p>
<p>OBOR represents the latest, and most aggressive, step in this shift. </p>
<p>From Africa’s point of view, OBOR presents a mixture of challenges and opportunities. Few African leaders made it to the Belt and Road Forum in Beijing <a href="https://thediplomat.com/2017/05/who-is-actually-attending-chinas-belt-and-road-forum/">earlier this year</a>, and there remain big questions about how the initiative will affect projects throughout the continent.</p>
<p>East African nations such as Kenya, Tanzania, and Ethiopia are seemingly the focus for China. But related projects have <a href="http://www.atimes.com/article/chinas-belt-road-keep-african-economies-moving/">popped up everywhere</a> from Cameroon to Namibia and Nigeria.</p>
<p>For many African states, the main question will be how they can leverage the vast sums of money behind OBOR to grow their own economies. They will be wary of an infrastructure heavy agenda resulting in a return to a colonial-style situation in which transport links are simply created to shuttle resources out of the host country, without creating opportunities for growth. </p>
<p>Additionally, OBOR may open up African markets to a wide variety of cheap Chinese goods, undercutting local manufacturers, and stymieing the prospects for large scale industrialisation of their own. </p>
<p>States throughout Africa already have infrastructure projects that they understandably wish to prioritise. Will OBOR interfere with these or cause them to be dropped altogether in favour of Chinese plans? </p>
<h2>A fork in the road</h2>
<p>The enormous project brings with it many vital questions, and, currently, few clear answers. What will the negotiations with Africa look like and who will be represented? How will financing be deployed and debt managed? How will land acquisition take place, will there be large scale land grabs such as <a href="https://www.theguardian.com/world/2015/apr/14/ethiopia-villagisation-violence-land-grab">those seen</a> in Ethiopia and Uganda? Will OBOR reinforce the political and economic status quo within participating African states or will it lead to substantial change? </p>
<p>The prospect of unsustainable debt presents another serious issue. Projects already underway such as the <a href="https://qz.com/996255/kenyas-3-2-billion-nairobi-mombasa-rail-line-opens-with-help-from-china/">Standard Gauge Railway</a> and the <a href="http://www.africanews.com/2017/07/25/ethiopia-djibouti-electric-rail-to-start-commercial-operations-in-october-2017//">Addis Ababa-Djibouti Railway</a> have required host countries to take out billions of dollars worth of loans, largely from Chinese state banks. </p>
<p>Debt accumulation is unlikely to slow, yet there are a number of problems with current borrowing practices. Sub-par domestic revenue generation and falling commodity prices can compromise the ability of governments to service debts. Since 2013, for instance, Kenya’s debt-to-GDP ratio has <a href="https://www.ft.com/content/947ea960-38b2-11e7-821a-6027b8a20f23">risen from 40% to 53%</a>, far above the government-set preference of 45%.</p>
<p>While investment is sorely needed throughout Africa, <a href="http://www.lawschool.cornell.edu/research/ILJ/upload/Arewa-final.pdf">some have argued</a> that infrastructure deficits are symptomatic of broader societal and economic problems. Simply contracting outside parties to construct new infrastructure will not ameliorate the conditions that led to the deficits in the first place. Additionally, over-investing in physical infrastructure without establishing corresponding governmental institutions and legal structures can lead to economic and financial fragility.</p>
<p>OBOR investments will bring much needed capital to the continent, yet they must be carefully supervised. Under performing infrastructure projects, slumping commodity prices, and rising debt levels are a recipe for crisis. The situation will be further complicated by China’s own <a href="https://theconversation.com/chinas-economic-slowdown-threatens-african-progress-49544">uncertain economic prospects</a>. If the OBOR gamble fails, China could take Africa down with it.</p><img src="https://counter.theconversation.com/content/81115/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ricardo Reboredo does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Investment is essential to African economies, but it can bring risks.Ricardo Reboredo, PhD Candidate in Geography, Trinity College DublinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/722032017-02-01T07:36:20Z2017-02-01T07:36:20ZWhy the US has a lot to gain from investing in Africa’s agri-food systems<figure><img src="https://images.theconversation.com/files/155000/original/image-20170131-3265-mw4n94.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Inspecting seeds in Uganda. US development organisations need to understand that today there is considerably greater local expertise.</span> <span class="attribution"><span class="source">TAO/Flickr</span></span></figcaption></figure><p>The US’s incoming administration has an historic opportunity to extend America’s global leadership by promoting the economic transformations underway in Africa. An effective US strategy would be based on the fact that Africa’s development still greatly depends on the performance of its agri-food systems. </p>
<p>Farming remains the primary source of <a href="http://www.fairmatchsupport.nl/wp-content/uploads/africa-agriculture-status-report-2015.pdf">employment</a> for 65% of Africa’s population. Poverty rates are in decline. But they remain unacceptably high. Putting more money in the hands of 500 million Africans who <a href="http://www.un.org/apps/news/story.asp?NewsID=45076">rely on</a> farming for their livelihoods will have a decisive influence on the pace of economic growth. </p>
<p>Virtually no country in the world has transformed its economy from an agrarian economy to a modern one without sustained agricultural productivity growth.</p>
<p>Why should US citizens care? Quite simply, because investing in Africa’s economic growth is in America’s national interest. </p>
<p>US exports of agricultural products to sub-Saharan Africa <a href="http://trade.gov/dbia/us-sub-saharan-africa-trade-and-investment.pdf">totalled</a> $2.6 billion in 2013. This will grow rapidly if Africa continues to develop. By 2050, sub-Saharan Africa will <a href="http://www.imf.org/external/pubs/ft/fandd/2016/06/radelet.htm">have</a> 2.1 billion people – 22% of the world’s population compared to 12% today. Rapidly rising populations and incomes will increase the demand for a safe, affordable and sustainable global food supply. </p>
<p>US farmers and agribusiness can help themselves by helping Africa meet its rapidly growing food needs. This can be done through investments in agri-food systems as well as supporting a sustainable, efficient global food system.</p>
<p>It is increasingly recognised that most African agricultural exports do not compete with US farm and agribusiness interests. In most instances they are highly complementary. </p>
<p>Rising farm incomes in Africa promote growth <a href="http://www.unep.org/pdf/TechnologiesAdaptation_PerspectivesExperiences.pdf">multipliers</a>. These expand private investment and employment opportunities in African agri-food systems and in the rest of the <a href="http://fsg.afre.msu.edu/fsp/Yeboah_Jayne_Africa_evolving_employment.pdf">economy</a>. Rising incomes in Africa also promote US export interests. A vibrant agricultural sector will hasten Africa’s transition to a more prosperous, diversified and stable region. </p>
<p>These are the benefits that would emerge from strong partnerships between African governments, the private sector and millions of African farmers and entrepreneurs. Enlightened US development assistance programmes are required.</p>
<h2>A changing landscape</h2>
<p>An effective US government approach will need to recognise the dramatic changes in the African landscape over the past few decades with respect to partnerships. Development models premised on 1980s conditions no longer fit 2017 realities. US development organisations can be especially effective if they understand that today there is much greater local expertise and awareness.</p>
<p>Many more Africans have professional job expertise related to agri-food systems than they did 25 years ago. This is true in both the public and private sectors. Many are educated internationally and possess valuable technical skills. They can operate effectively given superior knowledge of local culture and connections with centres of local power. That means they’re capable of influencing government investments. </p>
<p>An effective US strategy toward African agricultural development will engage more African professionals than in the past.</p>
<p>But conditions have not changed much in at least one important respect. Public agricultural institutions, such as R&D and extension services, play a crucial role in supporting farm productivity growth. But many in Africa can’t fulfil their mandates. Most African agricultural research systems are woefully underfunded. Asian farmers benefit from the fact that their governments annually <a href="http://www.instepp.umn.edu/sites/default/files/product/downloadable/oc51_4.pdf">spend over</a> eight times more on agriculture on average than African governments. Not surprisingly, the pace of productivity growth in Asia has eclipsed Africa’s.</p>
<h2>A new model for development assistance</h2>
<p>US and African governments share core interests in promoting private investment in African food systems. This would be done in partnership with local firms. It would support fair agricultural trade and a sustainable global food system. </p>
<p>Achieving mutual US-Africa interests for economic transformation in Africa will require greater support for African institutions that support the development of agri-food systems. This means supporting institutions that create the next generation of African educators, farm extension workers, research scientists, entrepreneurs and policy makers. These people will define the pace of private investment and agricultural transformation in African countries.</p>
<p>The US has one of the world’s most dynamic and productive agricultural systems. This is greatly indebted to the US <a href="http://www.aplu.org/about-us/history-of-aplu/what-is-a-land-grant-university/">land-grant university system</a>, the US Cooperative Extension <a href="https://nifa.usda.gov/extension">Service</a>, and a host of other public institutions. These bring vital practical information to agricultural producers, small business owners, consumers, families and young people. This rich history and know-how means the US can provide much needed leadership and expertise to support institutional capacity building in Africa. </p>
<p><a href="http://www.farmersfeedingtheworld.org/policy-briefing/">My colleagues, Isaac Minde and Chance Kabaghe, and I propose</a> that the main thrust of a new approach to development assistance in Africa should be to shift the role of US organisations. Instead of providing the technologies, services and answers themselves they should help African organisations to do so.</p>
<p>The time has arrived for the US to find effective ways to support capacity building. This should include African universities, agricultural training colleges, vocational schools, crop research organisations, extension systems and policy analysis institutes. International private companies, universities and NGOs have important but increasingly redefined roles that put African institutions in the lead. </p>
<p>Once enacted, the proposals made here will take time to generate their full impact. This is why there is no time to waste in getting started.</p>
<p><em>You can find the full policy paper on “Enhancing US efforts to develop sustainable agri-food systems in Africa” <a href="http://www.farmersfeedingtheworld.org/policy-briefing/">here</a>.</em></p><img src="https://counter.theconversation.com/content/72203/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Jayne does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>US farmers and agribusiness can help themselves by helping Africa to meet its rapidly growing food needs.Thomas Jayne, MSU Foundation Professor, Agricultural, Food and Resource Economics, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/653492016-09-20T12:18:14Z2016-09-20T12:18:14ZBotswana at 50: The end of an African success story?<figure><img src="https://images.theconversation.com/files/138105/original/image-20160916-16988-1dc3n5x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">President of Botswana Ian Khama. He leads a country that's lost the shine created by his father Seretse Khama.</span> <span class="attribution"><span class="source">EPA/Alejandro Ernesto</span></span></figcaption></figure><p>September 2016 marked 50 years since Botswana <a href="http://www.officeholidays.com/countries/botswana/botswana_day.php">attained independence</a> from British rule. Over the decades, the small landlocked country has been regarded as a role model for <a href="https://www.wider.unu.edu/publication/botswana-role-model-country-success">success</a> in Africa. It has achieved political <a href="http://internationalpropertyrightsindex.org/country?c=BOTSWANA">stability</a>, democratic <a href="http://static.moibrahimfoundation.org/u/2015/10/02201308/04_Botswana.pdf">government</a>, and remarkable <a href="https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_kd_zg&scale_y=lin&ind_y=false&rdim=region&idim=country:BWA&ifdim=region&hl=en&ind=false&icfg">economic growth</a>. </p>
<p>The attraction of Botswana and its history is newly reinforced in the film ‘<a href="http://www.imdb.com/title/tt3387266/">A United Kingdom</a>.’ The <a href="https://www.penguin.co.uk/books/55734/colour-bar/">story</a> begins more than 15 years before independence when the territory was known as the Bechuanaland Protectorate. The plot follows the marriage of <a href="http://www.sahistory.org.za/people/president-seretse-khama">Seretse Khama</a>, a royal African prince, to <a href="http://www.bbc.com/news/magazine-37297708">Ruth Williams</a>, a white British woman. </p>
<p>The apartheid regime was outraged and exerted political pressure on the British, who held important mining interests in South Africa. To ease tensions, the British forced Seretse into exile in England from <a href="http://www.bbc.com/news/world-africa-13041658">1950 to 1956</a>. He was only allowed to return to Botswana after abdicating his claim to the chiefdom. </p>
<p>Seretse would later enter party politics in the early 1960s, leading the then <a href="https://www.eisa.org.za/wep/bot1965overview.htm">Bechuanaland Democratic Party</a> to victory in 1965 and independence the following year.</p>
<p>For a global audience, the movie provides a topical account of race relations. The love story is also likely to revitalize the <a href="https://au.tv.yahoo.com/sunrise/video/watch/31864654/botswana-is-the-best-place-to-visit-in-2016/#page1">popular perception</a> of Botswana as a national <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=290791">success story</a>. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/pX5vI4osR50?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A United Kingdom (2016), directed by Amma Asante, and starring David Oyelowo and Rosamund Pike.</span></figcaption>
</figure>
<p>The 50-year anniversary was a time for Botswana to <a href="https://www.facebook.com/bot50/?hc_ref=NEWSFEED">celebrate</a>. But now is the time to reflect on the historical context for this imagery and question whether it has relevance for modern-day Botswana. </p>
<h2>The building of a tiny country</h2>
<p>Geopolitically and economically Botswana was one of the weakest countries to ever gain freedom from colonial rule. Its <a href="http://www.tandfonline.com/doi/abs/10.1080/00291958408552111?journalCode=sgeo20">landlocked position</a> was ominous. It bordered white minority regimes in South Africa, South-West Africa (Namibia) and Rhodesia (Zimbabwe). South Africa, occupying the main trading route, could readily intimidate Botswana with crippling sanctions and violent incursions. </p>
<p>Diplomacy was difficult. Relations with the apartheid regime in South Africa required a tightrope walk between economic cooperation and political distance. Botswana’s post-colonial leadership was slow to build wider credibility within the <a href="http://www.au.int/en/history/oau-and-au">Organisation of African Unity</a>. Overly reliant on British aid, the country was in desperate need of economic partners and diplomatic connections further abroad. </p>
<p>External onlookers doubted Botswana’s viability and its capacity to resist South African pressure. In defiance, Seretse upheld a vision of security and <a href="http://www.thepresidency.gov.za/pebble.asp?relid=7720&t=79">prosperity</a> in a non-racial democracy. </p>
<p>He insisted all individuals were entitled to political freedoms and individual protections, without racial discrimination. These values appeared ambitious to uphold in a young developing state. But they soon proved to be a vital asset.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/C1iWS7BQlqc?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Seretse Khama, video interview by Adrian Porter, Independent Television News (ITN) reports, 17 March 1965.</span></figcaption>
</figure>
<p>Regarded as noble and sincere, Seretse thrived in multilateral forums and bilateral meetings. His country had qualities that appeared exceptional and therefore worthy of assistance. There was even a convincing proposal that Botswana could encourage a <a href="https://www.facebook.com/permalink.php?story_fbid=477945378954792&id=148228411926492">wider transformation</a> throughout Southern Africa. </p>
<h2>Seretse’s winning strategy</h2>
<p>Seretse’s argument was simple. Apartheid relied on the notion that multi-racialism could not work in southern Africa. To challenge this, peacefully, Botswana needed to present a thriving alternative.</p>
<p>The more aid Botswana received, the more of a success it could become. And the more it could be seen as a success, the more it would undermine the ideology of apartheid. This was not purely a form of wishful idealism. Instead, it proved to be a practical response for a country that upheld the integrity of its principles.</p>
<p>The approach had its greatest appeal in the U.S. It inspired diplomats, politicians, scholars and anti-apartheid activists. In the following decade, Botswana became one of the <a href="http://us-foreign-aid.insidegov.com/l/22/Botswana">highest recipients</a> of U.S. foreign aid per capita. </p>
<p>Effective leadership and policymaking were also crucial. This was best demonstrated in Botswana’s effective management of a rich mining boom in <a href="http://www.npr.org/sections/goatsandsoda/2016/06/29/483695466/botswana-s-economy-needs-more-than-diamonds-to-shine">diamonds</a>.</p>
<p>Despite Botswana’s apparent achievements, the territory’s external security could not be guaranteed for many decades. Botswana accepted refugees provided they did not use its territory as a base to advance liberation struggles. But without an army until 1977, it was powerless to stop deadly <a href="http://www.nytimes.com/1986/05/20/world/pretoria-s-forces-raid-3-neighbors-in-move-on-rebels.html">incursions</a> by South African and Rhodesian security forces chasing suspected freedom fighters. </p>
<p>Yet Botswana’s great appeal, especially in North America and Western Europe, proved to be its own form of defense. Botswana could rely on almost universal <a href="http://hdl.handle.net/11176/69574">diplomatic protests</a> toward any act of provocation. </p>
<p>The nation would outlive the neighboring powers that once posed a threat to its existence.</p>
<p>Seretse, who died in 1980, ultimately proved that multi-racialism was possible in the region. </p>
<h2>Botswana today</h2>
<p>With these white minority regimes now long gone, Botswana has lost its claim to exceptionalism. Today, there are valid reasons to <a href="http://www.economist.com/news/middle-east-and-africa/21688387-africas-exemplar-good-governance-faces-rockier-days-losing-its-sparkle">question</a> Botswana’s “success.” The Botswana Democratic Party has remained in power since independence. President Ian Khama, Seretse’s son, shows <a href="https://www.theguardian.com/world/2014/sep/17/trouble-paradise-botswana-journalist">increasing signs</a> of authoritarianism. </p>
<p><a href="http://www.amnestyusa.org/our-work/countries/africa/botswana">Homosexuality is illegal and the San</a>, an indigenous hunter-gatherer population, face appalling levels of discrimination.</p>
<p>Growth is <a href="http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/AEO_2016_Report_Full_English.pdf">slowing</a> in an economy that has failed to diversify away from <a href="http://www.bloomberg.com/news/articles/2015-11-05/diamonds-aren-t-forever-for-botswana-as-mining-boom-fades-away">diamonds</a>. More worrying, Botswana’s supply is expected to run out within the next two decades. </p>
<p>As the nation reached 50, the historical context of Botswana’s “success” reveals it to be an outstanding example of image-building in circumstances where survival was tied to international visibility. </p>
<p>Botswana may be reasonably depicted as a “United Kingdom” that triumphed because of its inspiring message of interracial unity. Nonetheless, the portrait of success is outdated. It is unlikely to be revived for future anniversaries without substantial improvements in economic progress, human rights and social justice.</p><img src="https://counter.theconversation.com/content/65349/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Kirby has received scholarship funding from the Australian government under the Australian Postgraduate Award (APA) and a research grant from La Trobe University.</span></em></p>For a global audience, the movie ‘A United Kingdom’ provides a topical account of race relations. The love story is likely to revitalize the popular viewpoint of Botswana as a national success story.James Kirby, PhD candidate in History, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/620152016-07-05T17:05:03Z2016-07-05T17:05:03ZZimbabwe’s finance minister makes a doomed pitch to London’s big businesses<p>As British politics descended into a post-EU referendum melee of opportunism, betrayal, resignations, and votes of no confidence, the UK was in no position to lecture others on good governance. Fitting then, perhaps, that it received a rare visit from one of the world’s more benighted regimes.</p>
<p>A delegation of senior ministers from the Zimbabwean government <a href="http://nehandaradio.com/2016/07/04/chinamasa-besieged-london/">came to London</a>. It was led by Robert Mugabe’s finance minister, Patrick Chinamasa, who’s proven to be good at his job inasmuch as he’s conducting himself with decorum in an impossible situation. </p>
<p>Zimbabwe has no money, and its government has no fiscal plan. Its reserves are emptied, tax revenues are inadequate, public funds are still ransacked, and much of the country’s remaining formal employment is in an unproductive public service. Doctors, nurses and teachers are striking over unpaid wages, and their protests are turning into <a href="http://www.theafricareport.com/Southern-Africa/zimbabwe-protestors-strike-tweet-and-fight-in-bid-to-shut-down-country.html?utm_source=%5BNewsletters%5D+The+Africa+Report&utm_campaign=8e5ebd9c1a-daily-newsletter-05-07-2016&utm_medium=email&utm_term=0_7ee2458fc1-8e5ebd9c1a-338154565">violent clashes with police</a>. Foreign governments are not helping with standby budgetary support, and foreign corporations are not keen to invest in such a volatile country.</p>
<p>Part of that volatility is because of the power struggle now engulfing the ruling party. One of its wings, led by liberation war hero <a href="http://www.ibtimes.co.uk/zimbabwe-war-heroine-zpf-leader-joice-mujuru-sets-sights-robert-mugabes-presidency-1550822">Joice Mujuru</a>, has been entirely purged. The vice-president, <a href="http://www.ibtimes.co.uk/robert-mugabe-succession-can-reformist-emmerson-mnangagwa-take-over-zimbabwe-presidency-1551047">Emerson Mnangagwa</a>, is under heavy fire from a pro-Mugabe faction calling itself the <a href="http://www.theindependent.co.zw/2016/03/18/what-does-g40-want/">Group of 40</a> (G40) – a younger group who are not in their 70s, as is Mnangagwa, and certainly not in their 90s, as is Mugabe. Their talisman is Mugabe’s wife, Grace.</p>
<p>The G40’s members may be young enough not to have fought in the liberation war, but their announcements are still steeped in liberation rhetoric. That may or may not help it take control, but it has nothing to do with good governance. For all its influence over the party, the G40 has no plausible plan to address the problems Chinamasa and Zimbabwe face. </p>
<p>What is left of the opposition, meanwhile, is deeply divided, and its longtime leader, the charismatic <a href="https://www.theguardian.com/world/2016/jun/28/zimbabwe-politician-morgan-tsvangirai-cancer">Morgan Tsvangirai</a>, has cancer. </p>
<p>And while opposition figure <a href="http://nehandaradio.com/2016/04/12/tendai-biti-state-economy/">Tendai Biti</a>, a successful finance minister during the coalition government of 2009-13, came to London with Chinamasa, he has little to offer. His plans require a political accommodation with the West, and he surely knows that investment will only be prompted by an embrace of political pragmatism – something in short supply in Mugabe’s Zimbabwe.</p>
<h2>Nationalism placated</h2>
<p>Few of London’s heavyweight business figures came to listen to Chinamasa’s pitch, and for good reason. Apart from Zimbabwe’s deeply uninviting atmosphere of political and economic volatility, there is its rigid “<a href="https://www.dailynews.co.zw/articles/2016/04/13/mugabe-clarifies-indigenisation">indigenisation</a>” legislation, which requires that all companies operating in the country must be majority-owned by indigenous Zimbabweans. Few foreign companies will invest the billions of dollars Zimbabwe needs only to be shorn of their assets just like that.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=480&fit=crop&dpr=1 600w, https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=480&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=480&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=604&fit=crop&dpr=1 754w, https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=604&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/129356/original/image-20160705-793-hgm8jt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=604&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Squeezed: Patrick Chinamasa.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/bbcworldservice/3994526829/">BBC World Service/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>President Mugabe has assured the outside world that reasonable accommodations will be made, and that pragmatism will rule. But Chinamasa will know, as will every corporation’s legal team, that large investment is not forthcoming without legal protections, and courts of law that can be counted on to uphold them. </p>
<p>But Mugabe is simply not trusted by the rest of the world, and he dares not mandate a change to the indigenisation law – especially not now, as his health declines and as he perhaps secretly looks to secure his wife’s path to succeed him. </p>
<p>Indigenisation was meant to placate Zimbabwean nationalism, which still percolates among younger generations as well as older ones. Keeping that force in check is not just an imperative of political survival; it’s an ideological and emotional commitment, one Mugabe himself made with the land seizures that began in 2000. </p>
<p>The upshot is that national integrity is measured not in philosophical terms, nor in terms of the vibrancy of the state in all sectors, but simply in the reductive terms of the ownership of property and capital.</p>
<p>Far from a muscular, technocratic programme to protect Zimbabweans’ interests, it has become a fetish. Speaking in the City of London, Chinamasa and his colleagues were obliged to wear it round their necks like an albatross.</p><img src="https://counter.theconversation.com/content/62015/count.gif" alt="The Conversation" width="1" height="1" />
Robert Mugabe’s indigenisation laws demand that companies operating in Zimbabwe transfer most of their capital into local hands.Stephen Chan, Professor of World Politics, SOAS, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/611762016-06-22T14:24:55Z2016-06-22T14:24:55ZIllegal fishing is a major threat to Africa’s blue economy<figure><img src="https://images.theconversation.com/files/126969/original/image-20160616-15117-1ud517u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A man carries marlins to the market in Mogadishu, the capital of Somalia. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/au_unistphotostream/8571826320/in/photolist-e4sRjY-crYC8o-9rPydx-q8Ffvb-cXs1hA-tZ2Xk-ap1ZKS-9bKoag-e9rLfT-5Qy2va-cXs9Nh-dKKKQb-cXrX9m-bo3JAU-hXV447-cXs43w-cNFsy3-a4Uk1Q-4SHbcE-pY4Sku-pHNoic-7xDntq-6qa5o7-pHQkGj-8JNbHx-8JNhLc-pHM2mA-5SzCfD-gzyCj-7etXFh-pH5Yec-5NYqjh-nPcZ9X-9cdfRA-pZZKAZ-p3HkLt-cFxUv7-pH2kt6-7yQ5sS-F9R8xx-71Xuwu-cXrcsy-a4Ru2Z-5Qa5g8-7yLikx-cXrLMb-3mkeoH-8P3MDh-cXshU9-5QC7Rf">AMISOM Public Information</a></span></figcaption></figure><p>The blue economy lies <a href="http://www.uneca.org/sites/default/files/PublicationFiles/blueeco-policy-handbook_en.pdf">at the heart of globalisation</a>. Ninety percent of international trade takes place via the sea and 95% of global communication relies on underwater networks. The blue economy encompasses all economic activity in and around rivers, lakes, streams, riverbanks, shorelines, groundwater, freshwater, seas and oceans.</p>
<p>The blue economy is mostly unknown, overlooked and underdeveloped in Africa. It could represent a major growth driver. </p>
<p>Its potential is not lost on the African Union (AU), which has made the blue economy one of the <a href="http://agenda2063.au.int/en/">priority areas</a> for the next 10 years: the blue economy holds immense potential as a key to a prosperous Africa. The United Nations Economic Commission for Africa (UNECA) and Seychelles Vice President Danny Faure share this outlook, seeing the blue economy as a potential source of <a href="http://www.uneca.org/stories/blue-economy-africa%E2%80%99s-future">blue gold</a>.</p>
<p>But where does it currently stand in Africa? Does it benefit African economies?</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/126162/original/image-20160610-29222-rcy5n7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Fishing boats returning to shore in Nouakchott, Mauritania.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/m1key-me/14675718065/in/photolist-upnU2Y-ohSLQo-8dv2VY-7ahGu7-5NXA5E-aeouQa-omQTFP-isg4ih-qB4Ehd-nUJcU5-6NoGqD-pfM3vV-hTCevV-pY54uU-p4o5nq-EKJTh-skfCgq-e6bFFb-de3J4r-DTjeV-pbk2s8-auPYRt-6Uawmm-4vku23-oxyR9A-gkB1PX-9znhab-9qmks8-8wLFxa-isNnX8-cNFsy3-a4Uk1Q-4SHbcE-7Spvmi-8QvZV4-8dhFqD-pY4Sku-cXrVfG-pHNoic-cACZej-qhSHkx-7xDntq-6WocG8-b8qzTi-6qa5o7-e4sRjY-crYC8o-9rPydx-pHQkGj-q8Ffvb/">Michał Huniewicz/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Strategic significance</h2>
<p>The strategic significance of the blue economy for Africa is clear. UNECA has gone so far as to publish a <a href="http://www.uneca.org/publications/africas-blue-economy-policy-handbook">policy handbook</a> on the topic, echoing the African Union’s position.</p>
<p>According to the handbook, 38 of Africa’s 54 countries are coastal states and more than 90% of import-export occurs via the sea. The territorial waters controlled by African nations stretch out over 13 million km², with a continental shelf of about 6.5 million km², including exclusive economic zones. For the AU, the blue economy represents a new frontier of African renaissance.</p>
<p>There are tensions between African nations over the <a href="http://www.peaceau.org/uploads/au-2-en-2013-delim-a-demar-user-guide.pdf">demarcation of maritime borders</a>. But the fishing industry employs nearly 12.3 million Africans. And the blue economy could potentially solve nutritional and food security problems for nearly 200 million Africans. It has the potential to provide vital nutrition through underused resources in fresh and salt water fish. </p>
<p>A grassroots, holistic and collaborative approach would make it possible to establish a blue development strategy, taking into account climate change and sustainable development. But several outside forces jeopardise its success.</p>
<h2>The danger of illegal fishing</h2>
<p>Blue economic activities are hampered by natural phenomena like storms and rising sea levels. But they are also impeded by human activities such as piracy, and the arms and slave trades. Illegal fishing is one of the most significant threats.</p>
<p>Based on Africa’s financial inflows and outflows, <a href="http://www.uneca.org/publications/africas-blue-economy-policy-handbook">UNECA reckons</a> that the continent loses US$42 billion per year through illegal fishing and logging activities.</p>
<p>The <a href="http://www.uneca.org/sites/default/files/PublicationFiles/blueeco-policy-handbook_en.pdf">plundering of Africa’s blue economy</a>, perpetrated by European, Asian and Russian ships, is a reality. In <a href="http://www.un.org/africarenewal/magazine/july-2009/safeguarding-africa%E2%80%99s-fishing-waters">West Africa</a>, the economic loss is estimated at about $700 million per year.</p>
<p>Illegal fishing – untaxed and unregulated – impoverishes nations and triggers cross-border population displacement. According to <a href="http://www.thinkingafrica.org/V2/portfolio/economie-bleue-et-pillage-des-ressources-halieutiques-en-afrique-kombe/">Professor Jean-François Akandji-Kombé</a> at the University of Paris, the current situation can be explained by the fact that:</p>
<blockquote>
<p>The sea as economic entity is a new concept in Africa. For a long time, the continent didn’t have the means to exploit marine resources, or the means to assert political power over the seas. There were no seafaring people or nations to speak of in Africa. These people, these nations focused on the land, not the sea.</p>
</blockquote>
<p>The European Union has woken up to the magnitude of the systematic plunder of African fishing resources, and its potential political consequences. In recent years, it has been working to establish fishery <a href="http://ec.europa.eu/fisheries/cfp/international/agreements/index_en.htm">partnership agreements</a> with African countries like Cape Verde, the Comoros, Côte d’Ivoire, Gabon, Guinea-Bissau, Liberia, Madagascar, Mauritania, Morocco, Mozambique, São Tomé and Príncipe, Senegal and the Seychelles.</p>
<p>China’s policy has been remarkably shameless regarding illegal fishing. A number of African states hold Chinese vessels <a href="http://www.voanews.com/content/china-expands-global-fishing-fleet/2815656.html">responsible</a> for plundering African maritime resources and have called on the Chinese government to <a href="http://m.voanews.com/a/african-countries-call-for-china-to-stop-illegal-fishing/3133482.html">stop illegal fishing in West Africa</a>.</p>
<p>African governments must therefore come up with strategic frameworks if their people are to reap the benefits of this potential bounty.</p>
<p><em>Translated from the French by Alice Heathwood for <a href="http://www.fastforword.fr/">Fast for Word</a>.</em></p><img src="https://counter.theconversation.com/content/61176/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adam Abdou Hassan is a member of the Institute for Research and Teaching on Peace in Africa (Thinking Africa).</span></em></p>The blue economy is unknown, overlooked and underdeveloped in Africa. It could represent a major growth driver for the continent.Adam Abdou Hassan, Enseignant chercheur, Université de Rouen NormandieLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/567962016-03-31T04:24:22Z2016-03-31T04:24:22ZThe perils of relying on oil as the only resource for development<figure><img src="https://images.theconversation.com/files/116284/original/image-20160323-28212-1tkwk9p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Workers prepare pipes to service an oil well.</span> <span class="attribution"><span class="source">Reuters/Shamil Zhumatov</span></span></figcaption></figure><p>Developing off the back of one natural resource is risky for any country. It makes them reliant on external conditions beyond their control, such as global demand and supply. Since June 2014, global oil prices have fallen by more than <a href="http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0">70%</a>. Consumers are happy. Oil producing nations are not. </p>
<p>One example of this is South Sudan. It is the world’s youngest nation, having gained independence from Sudan in 2011 after more than <a href="http://www.bbc.com/news/world-africa-14019202">20 years of war</a>. Commercial oil was <a href="http://www.smallarmssurveysudan.org/fileadmin/docs/working-papers/HSBA-WP40-Oil.pdf">discovered in 1979</a> by US company Chevron in what was then one country, Sudan. The main oil reserves are located along the border between Sudan and what is today South Sudan, with an <a href="http://www.smallarmssurveysudan.org/fileadmin/docs/working-papers/HSBA-WP40-Oil.pdf">estimated 75%</a> of the oil reserves found on the South Sudanese side. The refinery and most other infrastructure necessary to sell and export the oil are located in Sudan. </p>
<p>When South Sudan gained independence, the two countries negotiated a fixed fee for each barrel of oil produced. The total fee was set at about <a href="http://www.sudantribune.com/spip.php?article53840">US$25 per barrel</a>. At this time, the oil price was about <a href="http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-For-The-Week-Of-July-25-2011.html">$100 per barrel</a>. This was sufficient for the country to make a healthy profit from oil production. Its oil revenues made up more than <a href="http://www.africaneconomicoutlook.org/en/country-notes/east-africa/south-sudan/">95% of government revenue</a>. But by agreeing on a fixed fee South Sudan carried the full risk of an eventual slump in oil prices. The country is still in an estimated <a href="https://radiotamazuj.org/en/article/oil-ministry-south-sudan-will-never-recover-earlier-production-levels">$2 billion</a> of arrears to Sudan for the transit fees since 2011.</p>
<h2>Internal disputes add to oil production issues</h2>
<p>Two major domestic factors compounded the hard times South Sudan faced as a result of the fall in oil prices. First, in January 2012 there was a dispute over the unpaid transit fees with Sudan. This resulted in South Sudan halting oil production, which in turn meant the supply of oil and the country’s main source of revenue fell quickly. Oil production was eventually resumed. Second, in December 2013 a civil war broke out in South Sudan, which led to a renewed shut down of some oil production. In March, the Ministry of Petroleum and Mining in South Sudan <a href="https://radiotamazuj.org/en/article/oil-ministry-south-sudan-will-never-recover-earlier-production-levels">said</a> it did not expect oil production to ever reach even half the peak levels it did in 2010.</p>
<p>New <a href="http://www.sudantribune.com/spip.php?article57895">negotiations</a> with Sudan have allowed for flexible fees that can rise and fall with the global price of oil. This new negotiation does not affect South Sudan’s outstanding arrears, and has come at a time when the country has, to a large extent, depleted its <a href="http://www.theigc.org/wp-content/uploads/2015/12/Jefferis-2015-Policy-note.pdf">foreign exchange reserves</a>. At current oil prices and production, it is estimated that South Sudan is earning <a href="https://www.dabangasudan.org/en/all-news/article/south-sudan-sudan-relations-under-threat-over-oil-transit-fees">less than $5 per barrel</a>. </p>
<p>As a result of civil war, South Sudan’s spending went up as its revenues from oil decreased. By October 2015, the government was only able to <a href="http://www.theigc.org/blog/moving-from-a-fixed-to-a-floating-exchange-rate-the-case-of-the-south-sudanese-pound/">finance about one-third </a>of its budget from its own revenue. To finance the remaining budget, it started borrowing from the Bank of South Sudan. Initially the bank was able to finance government spending from accumulated reserves. As these were depleted, from about $2 billion at independence to <a href="http://www.theigc.org/blog/moving-from-a-fixed-to-a-floating-exchange-rate-the-case-of-the-south-sudanese-pound/">$60 million</a> by October 2015, the bank had to start printing money. </p>
<p>The additional South Sudanese pounds circulating in the economy have severely affected the exchange rate and overall inflation. Current macro-economic indicators estimate that inflation in South Sudan has <a href="http://www.zawya.com/story/TR20160314nL5N16M2IFX2/">reached 202.5%</a>.</p>
<p>South Sudan is not the only oil dependent economy that is suffering from the fall in oil prices. There are lessons the young nation can learn from countries such as Angola and Nigeria. If it does not diversify its economy the risks of fluctuating oil prices will continue to mark its development path.</p>
<h2>Lessons from other African countries</h2>
<p>In Angola, a special <a href="http://allafrica.com/stories/201603050324.html">cabinet meeting</a> was called recently to discuss the country’s economic problems. Oil makes up 95% of Angola’s export earnings. Participants at the meeting noted the large decrease in the availability of foreign currency, expected to be 50% less compared with 2015 because of the fall in oil prices. This resulted in the devaluation of the kwanza and double-digit inflation figures.</p>
<p>In Nigeria, a much larger and slightly more diversified economy, the fall in oil prices is also taking its toll. Newly elected President Muhammad Buhari experienced a <a href="http://www.economist.com/news/leaders/21689544-president-muhammadu-buhari-repeating-economic-error-he-made-dictator-30-years-ago-hope?zid=304&ah=e5690753dc78ce91909083042ad12e30">déjà vu situation</a> marked by the fall in oil prices after he became president. On the day of his election the price per barrel stood at $64. When he was sworn in eight months later it had fallen to $32 per barrel. In Nigeria, like Angola, <a href="http://www.economist.com/news/leaders/21689544-president-muhammadu-buhari-repeating-economic-error-he-made-dictator-30-years-ago-hope?zid=304&ah=e5690753dc78ce91909083042ad12e30">oil revenues</a> make up 95% of export earnings and 70% of total government revenues.</p>
<p>There are ways that countries can manage their natural resource wealth and become less susceptible to external forces.</p>
<p>Botswana, for example, is a country that has <a href="http://www.revenuewatch.org/sites/default/files/RWI_Econ_Diversification_Botswana.pdf">managed its resource wealth</a> considerably better. It discovered diamonds in 1966 but has largely avoided many of the challenges now facing oil-dependent economies. One of the major factors that contributed to Botswana’s success is that it remained fiscally prudent even after diamonds were discovered. Botswana resisted the temptation of increasing spending as a result of the new-found wealth. Instead, it continued to adhere to principles of good budgeting, using its national development plan as a template. This resulted in the country having the <a href="http://economics.mit.edu/files/284">highest per-capita growth</a> in the world over several decades.</p>
<p>But even Botswana’s growth is not without risk, as 75% of its export revenue is made up from diamond sales. </p>
<p>The major lesson for South Sudan is that aside from prudent management of wealth derived from their oil, it is imperative that countries undertake increased efforts to diversify their economies. They must move away from being overly reliant on the export of just one resource. As the case of Botswana has shown, this will also take strong and well-run institutions. If South Sudan successfully manages to do this, it will not be as vulnerable to external risks of the world economy, such as the fall in oil prices.</p><img src="https://counter.theconversation.com/content/56796/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Astrid R.N. Haas is affiliated with the International Growth Centre. However, the views in this article are solely her own and not of the organisation. </span></em></p>South Sudan is not the only oil-dependent country suffering from the fall in oil prices. Nigeria and Angola are also having difficulties. One solution is for them to diversify their economies.Astrid R.N. Haas, Country Economist for South Sudan and Uganda, International Growth CentreLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/556672016-03-14T04:23:22Z2016-03-14T04:23:22ZThe search for Ubuntu in Africa’s corporate landscape<figure><img src="https://images.theconversation.com/files/114830/original/image-20160311-11264-1p5js50.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South African President Jacob Zuma delivers an address at the Inaugural Ubuntu Awards in Cape Town.</span> <span class="attribution"><span class="source">Flickr</span></span></figcaption></figure><p><a href="http://www.rug.nl/research/globalisation-studies-groningen/publications/researchreports/reports/ubuntuorhumanness.pdf">Ubuntu</a> has been a buzzword in African management-talk for two decades, but appears not to have delivered in African economies.</p>
<p>At <a href="https://theconversation.com/now-is-the-time-to-remember-what-mandela-meant-by-ubuntu-21388">Nelson Mandela’s funeral</a> US President Barack Obama said Ubuntu was Mandela’s greatest gift. South Africa’s 1993 <a href="http://www.gov.za/documents/constitution/constitution-republic-south-africa-act-200-1993#251%20Short%20title%20and%20commencement">interim constitution</a> spoke about “a need for ubuntu”. </p>
<p>Although the term “ubuntu” was not mentioned in the new constitution of 1996, apparently because of issues of ambiguity and redundancy, it remains implicit within South African <a href="http://repository.up.ac.za/bitstream/handle/2263/17392/Mokgoro_Where(2011).pdf?sequence=1">jurisprudence</a>.</p>
<p>With linguistic equivalents in many Bantu languages it is an important relational value expressing humanity and a sense of being through others. This is best described in the Xhosa proverb:</p>
<blockquote>
<p>Ubuntu ungamntu ngabanye abantu (People are people through other people).</p>
</blockquote>
<p>Ubuntu reflects a valuing of the intrinsic humanity of people and how they relate to others. This is a far cry from the instrumental value placed on human beings as “resources” in Western-style organisations: a major reason for <a href="https://terencejacksonweb.files.wordpress.com/2016/03/jackson02_africa_ijhrm2.pdf">workplace alienation of African workers</a>.</p>
<p>But, it seems, the pull of Western-style management appears too great to successfully implement Ubuntu management.</p>
<p>The hype and mystique around the term has not helped: variously a PR professional’s dream; a commodity packaged and sold by consultants; an “indigenous” concept harking back to pre-colonial times, and an idea denigrated as not appropriate to modern corporation.</p>
<p>So where should we be looking for it and what are we looking for?</p>
<p>My decade-long quest to find this elusive concept of Ubuntu in management practice has been frustrating. Yet this search may be coming to a successful conclusion.</p>
<h2>The search for ubuntu</h2>
<p>Neoliberal economics appear entrenched and western management solutions ingrained in company performance in sub-Saharan Africa. Yet these have been widely questioned as being <a href="http://terencejackson.net/2014/09/26/management-scholarship-on-for-and-from-africa/">inappropriate to Africa’s development</a>. </p>
<p>If there is so much pressure to eschew Ubuntu and African values in corporate life, where are we likely to find them?</p>
<p><a href="https://www.routledge.com/products/9780415312042">Previous research</a> in 14 different sub-Saharan countries in dozens of public and commercial sector companies identified only one company professing to adhere to “African” values. One manager in this company, <a href="https://terencejacksonweb.files.wordpress.com/2016/03/afriland_formatedr.pdf">Afriland First Bank</a> in Cameroon, told it like this:</p>
<blockquote>
<p>In traditional culture it isn’t the chief who makes the decisions. Every stone is turned by bringing people together. With individual decision-making there is a chance that you will make a mistake. So decisions are taken at the group level. We are like an African family that is trying to ensure our stability for the longer period. </p>
<p>In the north of the country you have isolated big trees in savannah areas. So people gather around the tree. They solve community matters, preventing small problems becoming destructive. This is the model here.</p>
</blockquote>
<p>At least in this case, far from being purely an African dream, it appears to work. <a href="http://www.businessincameroon.com/bank/0401-3834-afriland-targets-access-bank-cote-d-ivoire-and-bia-togo">Latest figures</a> show a balance sheet value of US$2.5 billion and a net banking income of $181 million. </p>
<p>From small beginnings in 1987, Afriland First Bank must be doing something right. With operations across central and west Africa, and offices in France and China, from the beginning it has focused on the informal economy, unlike other banks, in its quest to “develop a class of entrepreneurs in Africa”, seeing firms in the informal economy as Africa’s future.</p>
<p>In <a href="https://terencejacksonweb.files.wordpress.com/2016/03/jacksonhainesngoarticle.pdf">further research</a> community-based non-governmental organisations have shown signs of Ubuntu. However, they appear to lose this when receiving western donations. They need these funds to survive and grow. </p>
<p>Often there is overwhelming pressure from the donor to adopt Western-style management practices, even when the NGO knows this may not be appropriate to African staff and the communities they serve. One NGO manager put it like this:</p>
<blockquote>
<p>There is a lot of ubuntu, it is there … this is in the culture. You see it in the consensus model: people discuss in the villages. We are part of this. We discuss. If we can’t get over this, we put it to one side and come back to it. </p>
<p>There is the donor influence: they want things to happen at a certain time. How do you balance this with what you live with on a daily basis? When you come to the office you work in a different manner. To a certain extent this is stepping outside our culture, but not at the level as in the corporate sector.</p>
</blockquote>
<h2>Ubuntu in the informal economy</h2>
<p>Rather than harking back to pre-colonial times, to “authentic” African values and practices, the answer may lie in today’s dynamic and thriving informal economy. </p>
<p>In <a href="https://theconversation.com/why-the-voice-of-africas-informal-economy-should-be-heard-52766">recent research</a> informal firms appear more closely embedded in and attuned to African communities. They are not dependent on Western shareholders or Western donations, and certainly not subject to Western management education. And they often use well-tested methods and practices that are closely honed to local conditions. </p>
<p>They may offer a resistance, not to modern times as is often assumed, but to inappropriate “modern” management methods.</p>
<p>Yet this significant part of African economies is under-researched and largely ignored. Once African governments and international development organisations wake up to the importance of the informal economy to Africa’s future, we may yet discover what Ubuntu really means.</p><img src="https://counter.theconversation.com/content/55667/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Terence Jackson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The essence of Ubuntu can best be found in Africa’s informal economies. They are not dependent on western shareholders or donations, and certainly not subject to western management education.Terence Jackson, Professor of Cross-cultural Management, Middlesex UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/558992016-03-10T10:37:13Z2016-03-10T10:37:13ZAfrican academics face a huge divide between their real and scholarly selves<figure><img src="https://images.theconversation.com/files/114102/original/image-20160307-31275-xyw31d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Too much of what we know about Africa is still coming from outside the continent.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p><em>This article is a foundation essay. These are longer than usual and take a wider look at a key issue affecting society</em></p>
<p>African scholarship on Africa is operating at only a fraction of its true potential. It is hampered by the preferences, policies and politics of the Western academy. There are three reasons for my assertion.</p>
<p>The first relates to the poor state of knowledge about African economics and politics. Western academics tend not to focus on generating accurate information, instead using datasets to infer causal associations on a highly abstract level. But these datasets are actually far too weak for any such conclusions to be drawn.</p>
<p>Secondly, the structure of academic rewards and careers systematically disadvantages those who do not have the skills or capacities for this kind of high-end quantitative endeavour or have serious misgivings about it. This causes severe dissonance between actual lived experience and the academic work that is validated by universities.</p>
<p>Finally, there’s what I call “Occidentalism” in theory and policy. This ascribes a cogency to the West’s intellectual and cultural products that doesn’t exist. Quite simply, the Western experience of state formation remains the standard against which the rest of the world is indexed.</p>
<h2>1. A dearth of data</h2>
<p>Too much social scientific “fact” about Africa is actually fiction because it is not based on <a href="http://www.cornellpress.cornell.edu/book/?GCOI=80140100939320">real data</a>.</p>
<p>In his recent book, <a href="http://africanarguments.org/africa-why-economists-get-it-wrong/">Africa: Why Economists Get it Wrong</a>, Morten Jerven argues that the economic data used for studying African econometrics are highly unreliable. Econometricians have tried to compensate for this deficiency by using sophisticated statistical techniques. For instance, economists have spent much time and effort trying to explain the supposed African chronic growth deficit. They take governance data from the late 1990s or early 2000s and use it to try to explain why Africa grew more slowly than the global average over the past 50 years. </p>
<p>But, as Jerven points out, cause should come first and effect later. A lack of data and of awareness about the data’s deficits led econometricians to make a simple error. They are trying to explain something that didn’t actually happen. <em>Africa’s chronic growth deficit didn’t happen.</em></p>
<p>Instead – as everyone who lived on the continent at the time knows – African economies grew in the 1960s and early 1970s, stalled in the 1980s and early 1990s, then grew again, albeit in a different fashion. This isn’t a story of chronic slow growth but of boom, bust and boom again. There was a time-specific economic crisis that was deeper and more protracted in Africa than elsewhere in the world. <em>That</em> is what needs to be explained. African economies’ dominant feature is their extremely high sensitivity to global economic conditions.</p>
<p>That conclusion would lead to radically different economic policy prescriptions at the World Bank and other international financial institutions and donors.</p>
<h2>2. What knowledge is valued</h2>
<p>The structure of academic careers needs serious attention and reform. Consider the biases in academic reward and promotion. Teaching is undervalued. Peer-reviewed publication is rewarded, particularly if it appears in high-ranking journals that prefer certain methodologies and questions. Those methods are typically quantitative. They build beautiful castles in the air or palaces on foundations of sand.</p>
<p>This career structure marginalises African scholars. Supervisors in foreign universities rarely have the subject matter expertise, so they tend to guide students towards more theoretical approaches. Examiners and peer reviewers likewise reward and reinforce their own disciplinary biases. On the other hand, it is common to see junior Western scholars doing rather uninteresting quantitative studies or superficial case studies. Despite their shortcomings these studies are published. These scholars, then, become the group that undertakes peer review.</p>
<p>The African scholar of political science may be compelled to adopt a schizoid personality. To become an academic in a Western university she or he may be obliged to unlearn important knowledge, and learn frameworks and skills that are actually irrelevant to the situation at hand but are necessary for being considered a professional academic.</p>
<h2>3. Occidentalism</h2>
<p>Western scholars have long <a href="http://www.arabstereotypes.org/why-stereotypes/what-orientalism">exoticised</a> eastern and, by extension, African societies. “Occidentalism” is the inverse of this.</p>
<p>One prime example of Occidentalism is the concept of “the state”. Historians and anthropologists have tried to problematise this concept, but it carries with it a strong teleology: a one-way process of state formation and state-building. It is a process of turning robber barons to landowner barons to constitutional government, moving from a traditional patronage-based political order toward theorist Max Weber’s <a href="http://www.palgrave.com/us/book/9781137364890">definition of a state</a>. This is essentially an imitation of a north-west European state, or France or the US. These are all countries that established their modern statehood at the zenith of imperialism.</p>
<p>The rise of Asia will definitely challenge this. There will be a diversity of destinations for the consolidation of governance, sharing only the common factor of international recognition. This diversity reflects the fact that most countries’ vernacular doesn’t contain a word for “state” but rather for power, authority, government, the regime of the day and so on.</p>
<p>It is the same in Africa: political vernaculars have words for many things, but if we are to talk about “states” it must be in English or French, in the domain of scholarship or the practice of international law and international relations.</p>
<p>Occidentalism also occurs in policy engagement. Analysis is shaped to suit the audience, and scholars end up speaking their language. Rather than evidence-based policy, there is policy-based evidence-making. The paradigm of this is engaging with western governments, the World Bank or the United Nations. Much of the policy-related discourse on good governance, post-conflict reconstruction and development takes place in a fantasy land that exists only in the minds of international civil servants.</p>
<h2>Towards an African scholarship</h2>
<p>Everything I have said does not lessen the need for rigor. To the contrary, it is more difficult to produce first-rate scholarship by being true to the realities of this continent than it is to slot into the established track.</p>
<p>Generating accurate data about African economies, conflicts and political systems is hard. It is harder than pretending that the datasets which actually exist are good enough. It requires doing fieldwork, gathering information in a thorough and painstaking way.</p>
<p>Writing and publishing good quality, fact-heavy accounts of African realities is also not easy. Detailed accounts of what is actually happening don’t fit neatly into 5,000- to 8,000-word journal articles. The market for books is very small, so that there is not much chance of publishing the kinds of local histories or detailed political memoirs that are commonplace in Europe.</p>
<p>Constructing frameworks for explaining how societies actually function is intellectually demanding. It involves challenging the dominant frameworks and replacing them with better ones.</p>
<p>I am confident that these things will happen and, as they do, that scholars in Africa will feel less divided between their real and their scholarly selves.</p>
<p><em>This article is based on a keynote address that the author delivered to the 2015-2016 cohort of Next Generation Social Sciences in Africa fellows during the fellowship workshop held in Addis Ababa, Ethiopia, in partnership with the Institute for Peace and Security Studies at Addis Ababa University.</em></p><img src="https://counter.theconversation.com/content/55899/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alex de Waal is affiliated with the World Peace Foundation.</span></em></p>African academics should be leading the pack when it comes to producing research and information about the continent. So what’s holding them back?Alex De Waal, Research Professor and Executive Director of the World Peace Foundation at The Fletcher School, Tufts UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/533902016-01-26T04:05:30Z2016-01-26T04:05:30ZHow Africa offers opportunities beyond land, labour and commodities<figure><img src="https://images.theconversation.com/files/108977/original/image-20160122-430-5n2c8h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Champagne being served in a bar on McCarthy Street in Lagos. </span> <span class="attribution"><span class="source">Reuters/Akintunde Akinleye</span></span></figcaption></figure><p>If the mass media is to be believed, Africa is hardly a continent brimming with opportunities for business. But for some time international business commentators have been positioning the continent as the next market with significant potential. It is now often described as being ready to take on the mantle of Asia where growth is slowing, markets are becoming crowded and internal competition is becoming more severe.</p>
<p>China has anticipated this potential by making extensive investments in Africa. Between 2003 and 2011, <a href="http://www.cnbc.com/2014/12/30/recolonizing-africa-a-modern-chinese-story.html">its total investments</a> have increased thirty fold, from US$491 million to $15 billion.</p>
<p>Africa’s traditional trading partners from Europe, the UK and France have been left behind. China is the top bi-lateral <a href="http://www.herald.co.zw/is-chinas-role-in-africa-good-for-her/">trading partner</a> with trade volume exceeding $166 billion.</p>
<p>This confirms that <a href="http://www.economist.com/news/middle-east-and-africa/21598646-hopes-africas-dramatic-population-bulge-may-create-prosperity-seem-have">Africa’s new demographics</a> have plenty to offer: </p>
<ul>
<li><p>the continent accounts for about 40% of global reserves of natural resources;</p></li>
<li><p>60% of uncultivated agricultural land; </p></li>
<li><p>a billion people with rising purchasing power; and </p></li>
<li><p>a huge labour force. </p></li>
</ul>
<p>In addition, Africa is home to several of the world’s <a href="http://www.forbes.com/sites/trangho/2015/08/09/why-you-should-invest-in-africas-fastest-growing-country/#2715e4857a0b486d99574d5a">fastest-growing economies</a> and the <a href="http://www.vocativ.com/news/195748/africa-is-the-youngest-continent-in-the-world/">youngest</a> population. And taken collectively, these economies have a bigger <a href="http://www.uhy.com/the-worlds-fastest-growing-middle-class/">middle class</a> than India. Many of its most rapidly expanding nations do not rely on natural resources, with nearly two-thirds of growth last year coming from <a href="http://www.undp.org/content/dam/rba/docs/Working%20Papers/Food%20Production%20and%20Consumption.pdf">strong consumer spending</a>. And almost half its citizens now live in <a href="http://www.brookings.edu/blogs/future-development/posts/2015/06/18-urbanization-africa-leipziger">cities</a>.</p>
<p>Countries are losing out on the new “Scramble for Africa”. This time the scramble is for trade.</p>
<h2>Opportunities in Africa</h2>
<p>The continent offers opportunities beyond natural resources, land and labour power. We do not have to dig too deep to see that there are a lot of “fast expanding markets” and pockets of excellence within the continent.</p>
<p>One such opportunity comes from the retail sector. According to a <a href="https://www.atkearney.com/documents/10192/6437503/Retail+in+Africa.pdf/b038891c-0e81-4379-89bb-b69fb9077425">recent report</a>, several countries represent a vast market space for retail.</p>
<p>In Gabon, for example, the report suggests that with a GDP per capita of $21,600, the country’s newly formed middle class offers significant opportunities to foreign companies, particularly as the domestic retail sector is highly fragmented. Smaller nations such as Botswana and Angola are also offering more and more opportunities.</p>
<p>This story also pans out on a larger scale. Nigeria, with its <a href="https://www.atkearney.com/documents/10192/6437503/Retail+in+Africa.pdf/b038891c-0e81-4379-89bb-b69fb9077425">population of 178 million</a>, has a somewhat underdeveloped retail sector. According to the report, modern supermarkets made up only 1% of all shopping expenditure as the market remains dominated by informal shops and convenience stores.</p>
<p>Another source of opportunity for foreign businesses comes from the way that cultures and habits are changing. The exceptional economic growth of <a href="http://www.theguardian.com/global-development/datablog/2014/apr/07/nigeria-becomes-africa-largest-economy-get-data">Nigeria</a>, for example, has allowed for greater consumption, especially for status symbols and products that symbolise “tickets to middle class membership”. </p>
<p>From our own <a href="http://onlinelibrary.wiley.com/doi/10.1002/tie.21738/abstract">research</a>, one of the products that has substantial growth, perhaps somewhat unexpectedly, is champagne imported directly from France. Expenditure grew at an average of 26% between 2007 and 2012. A recent slowdown still leaves significant growth, forecast at 12% a year to 2017. </p>
<p>An important point here is that luxury food and drinks products are emblematic of an important cultural shift towards a more sophisticated kind of consumption.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=449&fit=crop&dpr=1 600w, https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=449&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=449&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=565&fit=crop&dpr=1 754w, https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=565&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/108859/original/image-20160121-9732-18a5b0f.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=565&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<h2>Understanding local markets is key</h2>
<p>In a recent speech, the CEO of a leading communications agency pointed out that Nigerians, especially the wealthy, do not only shop for themselves. They also shop for others in their families as a way to display their reflected status. As the country becomes more affluent, we can expect more and more expensive high-end products coming into the market to please an expanding and increasingly demanding middle class.</p>
<p>For many years, Apple viewed Nigeria as too poor to be an attractive market. This opened the way for Samsung to become the mobile telephony leader in Nigeria. </p>
<p>How did the South Korean company do it? It realised that even though the country is relatively poor — with <a href="http://data.worldbank.org/country/nigeria">GDP per capita</a> of only $3,000 - members within a family can easily collect funds from others. In this way, even cash-strapped teenagers can quickly accumulate enough from richer relatives to buy expensive mobile phones. The result: some 70% of high-end <a href="http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/">mobile devices</a> are sold to people in lower income households.</p>
<p>The Lucozade story is also instructive. It became the leader of the Nigerian drinks market by understanding when and where it would be needed and appreciated by people. Having its chilled energy drinks sold at the roadside increased its popularity among professionals who were often spending long hours in traffic jams. The drink became associated with providing refreshing moments.</p>
<p>These observations may be anecdotal, but they demonstrate an important point: it would be unwise to ignore African markets based on economic statistics alone. The key is to try to understand particular markets, often working with local specialists. </p>
<h2>Innovation</h2>
<p>A third source of opportunity is that African countries can also be sources of innovation. One of the most well-known and successful innovations is <a href="https://www.mpesa.in/portal/">M-PESA</a>.</p>
<p>Started in 2007 by Kenya’s largest mobile-network operator, M-PESA enables people to transfer money between each other using their mobile phones. They can also use their mobiles to withdraw cash at corner shops. </p>
<p>The scheme has become extremely popular due to the high costs of sending money and also because it offers a safe way to store money. Interestingly, the benefits go beyond mere convenience. A <a href="https://www.cgap.org/sites/default/files/CGAP-Brief-Poor-People-Using-Mobile-Financial-Services-Observations-on-Customer-Usage-and-Impact-from-M-PESA-Aug-2009.pdf">study found</a> that rural Kenyan household income has risen by 5%-30% as a result of adopting M-PESA. </p>
<p>It is also claimed a range of start-ups have been founded in Nairobi on the back of M-PESA’s operations.</p>
<p>As cultural and dynamic aspects of consumers are so different in Africa, it is very likely that we will see more innovations emerging from this part of the world.</p>
<p>So, while it has been easy to dismiss Africa in the past as a place that is, at best, a provider of basic commodities, land and labour, a closer look reveals that it is not hard to see that opportunities are aplenty and just waiting to be tapped into.</p><img src="https://counter.theconversation.com/content/53390/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s easy to dismiss Africa as a place that is, at best, a provider of commodities, land and labour. A closer look shows that the continent is innovative and offers a lot more opportunities.Mark Esposito, Professor of Business & Economics at Grenoble Ecole de Management and Harvard Extension School, Harvard UniversityTerence Tse, Associate Professor of Finance / Head of Competitiveness Studies at i7 Institute for Innovation and Competitiveness, ESCP Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/434062015-07-03T04:27:43Z2015-07-03T04:27:43ZWhy the approach economists have taken to growth in Africa has failed chronically<figure><img src="https://images.theconversation.com/files/87015/original/image-20150701-27138-1mwajiy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Not all of the post-independence period in Africa has been an economic failure.</span> <span class="attribution"><span class="source">Reuters/Philimon Bulawayo </span></span></figcaption></figure><p>There has been a chronic failure among economists to explain growth in Africa.
The methods and analytical angles they have used to explain relative failure in Africa were conceived in the 1990s, but these were unsuitable for explaining growth in the 1960s or growth since the 2000s.</p>
<p>There is no denying that there was an economic failure in many African economies and that this decline took place during the postcolonial period. But it did not coincide with the whole period. “Postcolonial period” and “economic failure” have been equated in literature that attempts to explain growth in postcolonial Africa. They should not be.</p>
<p>This erroneous stylised fact provided the impetus for a literature that compressed a history that moved from explaining the African growth shortfall to explaining the gap in GDP per capita between African economies and the rich countries in the rest of the world.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=922&fit=crop&dpr=1 600w, https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=922&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=922&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1159&fit=crop&dpr=1 754w, https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1159&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/86974/original/image-20150701-31874-19vmvfz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1159&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Economists have been able to explain why African nations fail, but not how they are growing.</span>
</figcaption>
</figure>
<p>Dispensing with the average growth outcome perspective changes the way in which the postcolonial growth record is both narrated and explained. This is because, by doing this, we are provided with an insight into periods of growth. When those periods become visible, it suddenly stops seeming at all plausible that initial conditions such as ethnic fragmentation and measures of social capital had a direct role in the failure of economic growth in the late 1970s.</p>
<p>At best, there must have been some latent factors, but the causality story – initial conditions causing slow growth – is wrong and therefore not useful for policy advice. Moreover, policy typologies such as the distinction between “closed” and “open” economies, or the related “bad” and “good” policies, do not correlate coherently with episodes of economic growth in African countries.</p>
<h2>Mistaking symptoms for causes</h2>
<p>Africa’s growth failure happened because of a combination of external economic shocks and a less-than-perfect policy response, from both international donors and national economic policymakers. </p>
<p>But laying the blame solely on institutions and policies was a costly mistake. Cause and effect were reversed in the growth literature, and several decades were wasted putting a lot of effort into curing symptoms that were thought to be causes. </p>
<p>If structural adjustment had been conceived as a policy package that was intended to remedy the effects of economic decline, it would have been more successful. Instead, structural adjustment policies were misguided.</p>
<p>All African economies have experienced the fluctuations and contractions of world markets, but different economies had different levels of exposure to world markets and they put different policies in place to manage their interactions with those markets. </p>
<p>The development of world markets after 1973 was bad news for all African economies except the petroleum-exporting ones. Dependence on world markets for primary commodity exports led to a convergence of negative economic performance in the 1980s, with only a few exceptions. </p>
<p>This convergence in economic performance paved the way for a convergence in policy advice, as African economies embarked on relatively homogeneous structural adjustment programs that were not suited to heterogeneous country conditions.</p>
<h2>What’s governance got to do with growth?</h2>
<p>That the states that most analysts characterise as having “poor governance” have presided over long periods of growth, both in Africa and elsewhere, is a strong argument against the claim that political governance is a determining factor in economic history. </p>
<p>Africa’s growth performance in the 1960s and China’s recent growth performance are good examples. </p>
<p>A second argument against the link between governance styles and economic performance is the fact that good governance is an outcome of development and not a prerequisite for growth. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=406&fit=crop&dpr=1 600w, https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=406&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=406&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=510&fit=crop&dpr=1 754w, https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=510&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/87012/original/image-20150701-27131-1pk92x3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=510&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">China’s high growth rates disproves theory that political governance is a determining factor in economic history.</span>
<span class="attribution"><span class="source">Reuters/Jason Lee</span></span>
</figcaption>
</figure>
<h2>Focus should be on what works, not what doesn’t</h2>
<p>It is quite obvious that future growth will depend on a multitude of variables, and that accurate projections are not feasible. However, it is also beyond doubt that world markets, local political conditions and the costs of factors of production in the domestic economy will play a large part in determining future growth trajectories. To predict the growth of the world economy is a tall order.</p>
<p>Our best guess is that markets will continue to fluctuate, as they have done in the past. But this will not mean more of the same for Africa.</p>
<p>The solution is to refocus the study of economics on the study of economies. The increasing distance between the observers and the observed has created a growing knowledge problem. With the move to cross-country studies based on macro-analysis, country-level nuances have been lost. </p>
<p>In other words, cross-country growth regressions can take us only so far. One of the problems is that the seemingly proven results of such literature have been taken at face value.</p>
<p>I do not want to argue that economists should be excluded from analysing the history of political and social institutions. The economic implications of history are far too great for these factors to be sidelined when writing the history of both poverty and the wealth of nations. </p>
<p>I do, however, wish to caution economists about the dangers of drawing policy implications for continents – or even for the entire world – that are based too quickly on weak and unquestioned evidence, spurious correlations, and uninvestigated historical relationships.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=383&fit=crop&dpr=1 600w, https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=383&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=383&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=481&fit=crop&dpr=1 754w, https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=481&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/86986/original/image-20150701-31900-18c4y3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=481&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Karl Marx’s interpretation that the more developed countries showed the less developed the image of their own future has been debunked repeatedly.</span>
<span class="attribution"><span class="source">Reuters/Dinuka Liyanawatte</span></span>
</figcaption>
</figure>
<p>The turn toward a literature that delivers useful policy recommendations will involve research that seeks to uncover how African states and economies operate, rather than showing how they differ from those that are richer. </p>
<p>Karl Marx wrote that the more developed countries showed the less developed the image of their own future. That interpretation of economic development has been debunked time and again. </p>
<p>Late development is different, and African countries should follow their own path. If it is true – and I think it is – that institutions really matter for development, then that means we have to understand how and why institutions are embedded, and how we can work with them. </p>
<p>The subtraction approach to economic development must be disbanded. A change is needed in the literature on institutions and economic growth – toward a reciprocal comparison focusing on how African economies work rather than only explaining why they don’t.</p>
<hr>
<p><em>This article is an excerpt from the author’s new book, <a href="http://www.zedbooks.co.uk/node/20810">Africa: Why Economists Get It Wrong</a>.</em></p><img src="https://counter.theconversation.com/content/43406/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Morten Jerven receives funding from Social Sciences and Humanities Research Council of Canada.</span></em></p>Africa’s growth failure happened because of a combination of external economic shocks and a less-than-perfect policy response, from both international donors and national economic policymakers.Morten Jerven, Associate Professor of Economics, Simon Fraser UniversityLicensed as Creative Commons – attribution, no derivatives.