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Africa faces a difficult, possibly disastrous future unless it acts quickly to consolidate democracy, liberalise its economies, invest in people and infrastructure, and ensure the rule of law.

Given sub-Saharan Africa’s population is projected to double to 2 billion within a generation, without leadership taking these decisive actions to encourage long-term investments, the continent will be overwhelmed by the growth in people, especially in its cities. If the right policy and institutional actions are taken, however, they will help to create the conditions for a high-growth demographic dividend.

The nature of the challenge that Africa faces is on display on the Great East Road, which runs from the Zambian town of Chipata, on the Malawian border, to the capital, Lusaka. The journey along this national road is at best harrowing. Although the 570-kilometre road from Chipata has mostly been rebuilt, and the traffic speeds have consequently gone up, it is still a dodgem ride of four- and two-wheeled vehicles, tractors, trucks, herds of goats, cattle, oxcarts, donkey carts, pedestrians, dogs and even disabled carriages. Travelling along it, we braked to a near-stop no fewer than 20 times for errant goats. After that we stopped counting.

The trucks add further confusion, especially as the road descends towards the Luangwa River and its great 222-metre suspension bridge. Built with British aid, a plaque on the western end of the bridge commemorates its inauguration by President Kenneth Kaunda in 1968. The pinstriped paramilitary act as traffic police, allowing only one truck over at a time, whose loads consist of mainly processed food and fuel for Zambia and the Democratic Republic of the Congo, their cabs emblazoned with biblical treatises and other urgings, from ‘God only Knows’ to the intriguing ‘Third Base’.

The road is a reflection of the situation in Zambia. There are ever-more people and they are on the move to the cities. By 2030, the population will grow from the current 16 million to about 25 million. An increasing number will be attracted to the urban areas because, despite the country’s rich soils, agriculture has consistently performed below its potential, not least because of government interference in maize pricing, lack of land tenure, and difficult and expensive logistics.

Lusaka, built for 1 million people, houses 2.5 million today and will, at current rates of increase, be home to double that number in 15 years. Who will employ the young people looking for work in the next few years?

Zambia has yet to provide an answer. The presence of so much two-wheeled traffic reminds one of Kenneth Kaunda’s attempts, as president of the First Republic, to spur economic diversification with the creation of a number of new domestic industries, including Luangwa Industries, which made the Eagle brand of bicycle in Chipata. Zambia also manufactured Mitsubishi trucks and cars, assembled Fiats, Peugeots and Land Rovers, produced batteries in Mansa, glass and clothing in Kapiri Mposhi and Kabwe, canned pineapples in Mwinilunga and processed cashews at Mongu. Dunlop made tyres in Ndola for export in the region; Serioes International stitched designer suits for export to the UK and Germany; Lever Brothers, Johnson & Johnson and Colgate-Palmolive manufactured household goods and toiletries; and ITT Supersonic produced televisions and radios in Livingstone.

Yet, while Zambian industries used to rank only behind Zimbabwe and South Africa in the region, by 2016, very few remained. The Chipata bicycle factory had become a beer warehouse, Livingstone Motor Assemblers (then one of only seven Fiat factories worldwide) a small timber factory, Kabwe’s Mulungushi Textiles a piggery, and Kafue Textiles a maize-storage site. With the disappearance of tariff protection and the tax incentives once administered by the government’s Industrial Development Corporation, the centrepiece agency for the import substitution industrialisation strategy, these industries left too. Local consumers voted with their money for cheaper, and often better-quality, imported goods.

The attempts at industrialisation were hampered not only by a lack of competitiveness and the size of Zambia’s market, but also by the simultaneous nationalisation of key industries. In April 1968, Kaunda announced that the state would take control of all private retail, transport and manufacturing firms, in what came to be known as the Mulungushi Reforms. Eighteen months later, the Matero Reforms were announced, whereby the government purchased 51 per cent of shares from the existing mining companies, Anglo American Corporation and Roan Selection Trust. In 1973 both companies were fully nationalised and transferred to the state’s Zambia Consolidated Copper Mines (ZCCM). That year, the mines produced at least 720 000 tonnes of copper and employed 48 000 people.

Over time, however, burdened by poor state management, the copper industry collapsed and along with it the economy. As will be further explained in Chapter 5, ZCCM production fell to 257 000 tonnes in 2000, when it employed just 21 000 people. The contribution of mining to the economy fell from one-third of total output in 1973 to under 8 per cent 30 years later, before slowly recovering again.

And Zambia has not been able to grow other sectors that might employ new workers. For instance, the World Bank noted in 1966 that, ‘There is considerable untapped agricultural potential and scope for further development of the tourist industry.’4 This, as will be seen in Chapter 4, remains sadly the case – one of potential and promise rather than delivery and progress.

And, similarly, half a century later, tourism, a sector that should be able to generate a large number of jobs, is weighed down by continually changing regulations, a permit culture, and the cost and difficulty of getting to and around the country. Zambia’s potential is poorly marketed and its national parks only partly developed. As a result, despite extraordinary offerings, including Victoria Falls, considered as one of the Seven Natural Wonders of the World, the country receives a maximum of just 150 000 international tourists a year.

Still, Zambia was a poster child for a new era of African growth in the 2000s, when its economy grew at 7 per cent annually from 2004. The country’s performance was supposedly down to better governance and policies. But when the copper price went down, growth slowed, the effects worsened by an inconsistent tax policy and a spendthrift government. Zambia’s economic growth fell to just 3 per cent by 2015.5 This rate is barely enough to maintain current per capita incomes and wholly inadequate to generate the employment required by the large number of young people who will be looking for jobs in the next few years.

Zambia’s particular challenges exemplify common problems across the continent.

The African reality

Africa has enjoyed an unprecedented (at least by the postcolonial record) economic growth period over the past 20 years. Since 1995, annual GDP growth across the sub-Saharan region has averaged 4.3 per cent a year, three percentage points higher than in the previous two decades.6 As a result, (real) income levels have been lifted substantially, from $726 per capita in 1994, for example, to $984 in 2005.7

Such growth rates, however, have not been universal across the continent. In eight countries, income per person actually fell – starkly so in the case of Zimbabwe, by some 30 per cent. Moreover, growth has not been as pro-poor as in other regions. Whereas elsewhere in the world there has been a reduction of 2 per cent in poverty for each percentage point increase in average per capita consumption, in Africa such growth has caused a reduction of just 0.69 per cent.8 In part, this is down to the source of Africa’s growth, which is primarily the extractive (oil, gas, mining) sector, rather than agriculture or manufacturing.

This record reflects great disparities in accessing finance, education, healthcare and other basic services, and where formal employment prospects also vary greatly, including between rural and urban settings. And, in part, this slow reduction in poverty levels relates to a lack of appropriate skills and the presence of the system necessary to instil them. Whereas sub-Saharan Africa’s primary-school education enrolment rates have improved in the region from under 60 per cent to 100 per cent since 1970, the rates of completion and mastery remain problematic, at just over 60 per cent compared to the global average of over 90 per cent. A high level of illiteracy results in widespread marginalisation from productive economic and social life, and is associated with poorer health and nutrition. While the official unemployment rate for the whole of sub-Saharan Africa is, at 8 per cent, only slightly above the global average of 6 per cent,9 underemployment is much higher. Many of those denoted as having work are self-employed or in poorly-paying jobs. Africans are working to survive, but, by and large, they are poor.10

Moreover, the good times are now over because of the commodity-price slump and uncertainty in the world market. Growth in 2016 across sub-Saharan Africa was projected to be 1.4 per cent – less than half of the 3.5 per cent in 2015 and far below the growth trend over the previous two decades.11

Before the commodity collapse, observers had commonly exclaimed Africa as ‘on the march’ or, in contemporary parlance, ‘rising’.12 Not surprisingly, given the fog of despair that has frequently enveloped the continent, a small industry quickly developed around the better prospects for Africa, based sometimes on a combination of hubris, faith and anecdotal data. For example, The Economist has noted that ‘Africa’s 1.2 billion people … hold plenty of promise. They are young: south of the Sahara, their median age is below 25 everywhere except in South Africa. They are better educated than ever before: literacy rates among the young now exceed 70 per cent everywhere other than in a band of desert countries across the Sahara.’ This, according to the article, is the continent exemplified by ‘Nairobi’s thriving malls and Abidjan’s humming ports’, as well as less conflict and improved healthcare.13

Africa’s level of poverty has been falling (from 61 per cent in 1994 to 43 per cent 20 years later).14 Nevertheless, Africa houses about half the world’s extreme poor, and the bulk of the world’s fragile states, where reform and recovery are tenuous. It has a long way to claw back on the lost decades of the 1960s, 1970s and 1980s when development in East Asia, to take a regional example, surged. As the World Bank estimated for Africa back in 2000, ‘With the region’s rapidly growing population, five per cent annual growth was needed simply to keep the number of poor from rising. Halving severe poverty by 2015 would’, it noted, ‘require annual growth of more than seven per cent, along with a more equitable distribution of income.’15

Even before the commodity collapse, there had not been a substantial transformation of the income structure in the vast majority of countries on the continent. As The Economist has argued:16 ‘Some 90 per cent of Africans still fall below the threshold of $10 a day,’ while ‘the proportion in the $10–$20 middle class (excluding very atypical South Africa), rose from 4.4 per cent to only 6.2 per cent between 2004 and 2014’. Moreover, ‘over the same decade, the proportion defined as “upper middle” ($20–$50 a day) went from … 1.4 per cent to 2.3 per cent.’ It notes that there may be ‘only 15 million middle class households in 11 of sub-Saharan Africa’s bigger economies (excluding South Africa and using a range of $15–$115 a day)’.

Africa’s improved economic growth in this century was a significant achievement. However, more will have to be done for a sustained period in the future, especially as the commodity boom of the early part of the century is unlikely to be repeated.17 The stakes will become even higher when the huge surge of population growth hits countries across Africa.

People: The fundamental challenge for Africa

This book asks the most fundamental question for Africa and for those concerned about significantly reducing world poverty. Can Africa follow East Asia and significantly reduce the number of people living on low incomes and reap the related gains in infant mortality, child and maternal health, education and well-being that other nations, once thought to be hopeless, have achieved in recent years? In particular, in light of the enormous increase in populations that will occur across the continent, will enough jobs be generated to employ the resulting massive number of young people?

We believe that these questions must be answered now in order to prepare economies for the coming demographic reality. Waiting until populations have substantially increased will mean that leaders will only be able to offer measures that come too late for their unemployed citizens. Africa’s total population is expected to more than double by 2050 to 2.4 billion. According to the UN, Africa is expected to account for more than half of the world’s population growth between 2015 and 2050. Nearly all of this growth will be among the 49 countries of sub-Saharan Africa, comprising 2 billion of this figure. This book is mainly focused on this demographic phenomenon.18 Even the rapid expansion of Asia’s population pales in comparison: that continent will have grown by a factor of 3.7 between 1950 and 2050, whereas Africa’s equivalent factor is predicted to be 5.18 from 2000 to 2100.19

The Swedish statistician Hans Rosling has noted that, ‘[t]he reason the population is growing in Africa is the same reason that [saw] population growth first in Europe, then in the Americas, then in Asia. It’s when the population goes from a phase where you have many children born and many who are dying. Then the death rate goes down and [some time later] the birth rate follows.’20

Figure 1: UN medium variant population predictions, 2015–2100

Source: UN Department of Economic and Social Affairs, Population Division. World Urbanisation Prospects: The 2014 Revision, https://esa.un.org/unpd/wpp/DataQuery/

Between now and 2050, the populations of 28 African countries are projected to more than double. By 2100, 10 African countries are projected to have increased their populations at least fivefold: Angola, Burundi, Democratic Republic of the Congo, Malawi, Mali, Niger, Somalia, Tanzania, Uganda and Zambia. There is a link between poverty and population growth, where the latter is especially high in the group of 48 countries designated by the UN as the least developed countries, of which 27 are in Africa. Africa’s increases are projected despite an anticipated substantial reduction of fertility levels. The UN’s medium variant projection assumes that average fertility will fall from 4.7 children per woman in Africa (in 2010 to 2015) to 3.1 from 2045 to 2050, reaching 2.2 by 2095 to 2100. After 2050, Africa is expected to be the only major continent still experiencing substantial population growth. As a result, the continent’s share of global population is projected to grow to 25 per cent by 2050 and 39 per cent by 2100.

To highlight the disruptive nature of the population growth that Africa will experience, Figure 2 displays the growth of three countries: Burundi (relatively small), Ghana (a medium-sized country) and Nigeria (the continent’s behemoth).21

Figure 2: National populations in selected years (in millions), 1950–2050

Source: UN Department of Economic and Social Affairs, Population Division. World Urbanisation Prospects: The 2014 Revision, https://esa.un.org/unpd/wpp/DataQuery/

Each country’s population will have grown by an order of magnitude between 1950 and 2050. In the relatively short period (by demographic standards) between 2015 and 2025, they will grow between 20 per cent (Ghana), 33 per cent (Burundi) and Nigeria by 31 per cent. Therefore, all three will certainly be radically different in 2035 compared to their populations in 2015.

Africa’s population growth compared to the rest of the world’s demographic decline means that it will be increasingly differentiated by the age of its population. Africa will be much younger than the rest of the world. As The Economist has noted, ‘Africans will make up a bigger and bigger share of the world’s young people: by 2100, they will account for 48 per cent of those aged 14 and under.’22 Or, put differently, 10 of the world’s youngest countries are in Africa.23

Niger is both Africa’s and the world’s most youthful country, with a median age of just 14.8, half the global figure of 29.6 years, a function of a high birth rate and low life expectancy. The average fertility rate in Niger is 7.6 children, compared to a global figure of 2.5, and life expectancy is just 58 years. Uganda is the world’s second most youthful country, and Chad the third, where the median age is 16.

Figure 3: Projected median age of total population in 2050

Source: UN Department of Economic and Social Affairs, Population Division. World Urbanisation Prospects: The 2014 Revision, https://esa.un.org/unpd/wpp/DataQuery/

By contrast, much of the rest of the world is ageing. In 2015 the segment of the population over 60 was equivalent to 12 per cent of the global population. At the current growth rates of over 3.2 per cent per annum, by 2050 all major continents of the world except Africa will have nearly a quarter or more of their populations aged 60 or over.

If properly harnessed, and properly planned for, Africa’s population increase and the resultant proportion of so many young people present a tremendous force for change, providing opportunities to fill the resulting labour-force gap. (A similar situation is seen in other parts of the world where ageing populations create an opportunity to provide services for that age group.) Sixty per cent of Africa’s population and 45 per cent of the labour force are under 25, with some 10 to 12 million youths entering the labour market every year. Youth as a proportion of the total population is projected at over 75 per cent by 2015, and is not expected to decline before another generation or more. The World Bank, for example, has estimated that the demographic dividend could generate 11 to 15 per cent GDP growth between 2011 and 2030. But such growth depends on providing improved education and skills, suitable infrastructure and the systems to employ young people, as well as efficient government to make it all happen.

Without such planning and a conducive set of policies for development, there could ensue a demographic disaster and a spur for social unrest and increased migration both within Africa, and to Europe and elsewhere. The choice is in the hands of Africa’s policymakers.

Critically, the large number of young people who will come of age in the next few years will need jobs.

The International Monetary Fund (IMF) has estimated that, in order to maximise its booming population dividend, the continent will need to produce an average of 18 million high-productivity jobs per year until 2035. The surge in young people will necessitate an extremely rapid, possibly unprecedented, rate of job creation. The IMF also notes that over this period policies are required to gradually transition jobs from the informal sector, which accounts for about 90 per cent of the 400 million jobs in low-income sub-Saharan African countries, to the formal sector.24

To date, Africa’s job creation has not kept up with existing birth rates. The African Economic Outlook 2015, for example, reports that only 7 per cent of the continental population aged 15 to 24 in low-income countries had a ‘decent’ job. In African middle-income countries, this figure increased marginally, to 10 per cent.25 Underlining the challenge, the World Bank has forecast that, by 2030, despite major efforts, some 19 per cent of Africa’s population will still live in poverty. Those 300 million people will then represent 80 per cent of the global population living on less than the (2005 equivalent of) $1.25 a day.26

The risks stemming from large numbers of digitally connected youths without jobs are high.27 They are unlikely to sit idly by waiting for change: they will demand it. In the future, increasingly, the political focus will shift to the cities, the youth and to the technologies that they employ.

At the same time, where people live and work in Africa is changing. The countries south of the Sahara, are projected to constitute the most rapidly urbanising region on the planet. The percentage of people living in this region’s cities will rise by 16 per cent to reach a level of 56 per cent by 2050.28 Over this period, some 2.5 billion people will be added to the urban population worldwide, with almost 90 per cent of the increase occurring in Asia and Africa.29 For example, Lagos – which had a population of 1.4 million in 1970, and 5 million in 1991 – will increase to 25 million by 2020, rivalling Cairo as the continent’s most populous city. Africa’s urban growth will far outpace the historical rate of developed and developing regions. While the population of London grew at 2 per cent annually from 1800 to 1910, doubling every 35 years, some African cities’ populations are doubling every 10 years, with growth rates at over 7 per cent annually.30

So far, as will be seen, African urbanisation has not correlated with economic growth on a similar scale to that experienced elsewhere. As the World Bank has put it, African cities ‘cannot be characterised as economically dense, connected, and liveable. Instead, they are crowded, disconnected, and costly.’31 Urban migrants have largely moved from low-productivity jobs in rural communities to equally inefficient jobs in lower-income urban areas. Neither the migrants nor African economies have enjoyed the economic benefits of urban agglomerations, concentrations of labour, or economies of scale.

The inevitability of a fast-growing population increasingly concentrated in the cities is a game changer for Africa one way or the other.

The old policies that featured to varying degrees across the continent – state interference in the economy, corruption and a failure to concentrate on growth – will not only fail to serve the population but, worse still, if these policies remain unchanged, will condemn leaders to an increasingly restive citizenry. These conditions have the potential to destabilise governments and end the tenure of low-performing rulers. In a more crowded and urbanised Africa, the fate of leaders will, in the future, be much more directly tied to economic performance.

Commodities: Dealing with the bust

During the commodity boom there was considerable optimism that African economies were changing and that they were no longer dependent on exports of raw materials. In 2010, the McKinsey Global Institute claimed that the ‘commodity boom explains only part of Africa’s growth story. Natural resources directly accounted for just 24 per cent of Africa’s GDP growth from 2000 to 2008.’ McKinsey argued that ‘the key reasons behind Africa’s growth surge were improved political and macroeconomic stability and microeconomic reforms.’ However, hedging its bets, McKinsey believed that the continent would continue to benefit from ‘rising global demand for oil, natural gas, minerals, food, arable land, and other natural resources’.32

This analysis informed McKinsey’s upbeat 2010 Lions on the Move report about Africa.33 This report states: ‘We find that Africa’s economic growth surge was widespread across countries and sectors and that its roots extend far beyond the global commodity boom’, noting ‘Africa’s business opportunities are potentially very large, particularly for companies in consumer-facing industries (such as retail, telecommunications and banking); infrastructure-related industries; across the agriculture-related value chain; and in resource-related industries’. The report declares: ‘Global executives and investors cannot afford to ignore the continent’s immense potential.’

As China’s demand has slowed, however, it is clear that the argument about Africa’s minimal dependence on commodities as a driver of growth was wrong. McKinsey underestimated the influence that raw material exports had on the domestic economy as a whole. It is also clear that the report was off the mark about the pace and extent of improving governance and the appetite of African governments to pursue policy change. Six years later, McKinsey revisited its African thesis in Lions on the Move 2.34 The second iteration acknowledged Africa’s slowing growth and the divergent paths of its countries. ‘Some countries have continued to grow fast while others have experienced a marked slowdown as a result of lower resource prices and higher socio-political instability,’ concedes the report. Progress requires governments and ‘Africa’s companies to step up their performance’.

Whatever the value and accuracy of such bold predictions, it is clear that African economic growth cannot continue to rely on commodities, not only because the continued demand is questionable, but also because commodities do not provide the jobs that Africa needs. The price upswing was driven primarily by demand from China, which grew its share of worldwide metals consumption from 6.4 per cent in 1990 to 43.9 per cent in 2015. However, China’s annual increase in metals consumption has slowed from 10.3 per cent during the period 1995 to 2008, to 3.2 per cent during 2010 to 2014.35 China’s growth rates are expected to continue to decline as it transitions from a manufacturing economy to one focused on services and consumption.

The end of the commodity super-cycle has been followed by the drying up of other funding sources. In the decade from 2005, 17 African countries issued dollar denominated bonds to foreign investors as investors looked to Africa for higher yields. Ghana’s debut dollar bond was four times oversubscribed. Zambia’s 10-year bond, issued in 2012, was 24 times oversubscribed, selling at a yield of 5.6 per cent.

Debt cancellation for 30 African countries brought down external debt in the region from a peak of 76 per cent of GDP in 1994 to 25 per cent by 2008, enabling African governments to take on fresh loans. While nearly $14 billion in debt was issued during 2014 and 2015, the market has slowed as a result of lower commodity prices and weakening African currencies, and as rising interest rates elsewhere took root.36 Although the continent’s median debt-to-GDP level is only 42 per cent, in some of the previous boom economies, including Zambia, it had risen through the 50 per cent levels and in Ghana to over 70 per cent. Unless things change, African liquidity is likely to worsen as the repayment date of these bonds, mostly after 2020, arrives.37

Furthermore, it does not appear that many African countries took advantage of the ‘fat’ years of high commodity prices to fundamentally change their institutions, policies and politics. The Heritage Foundation’s Index of Economic Freedom is a comprehensive rating scheme that evaluates countries based on rule of law, fiscal performance, regulation and openness of markets. The index is not perfect – no system that seeks to rate all countries is – but it does allow for consistent comparisons across nations and across eras.

Between 2010 and 2015, according to this index, Africa did not make much progress. The average ranking of countries in the region increased from 54.07 to 54.95 (the highest, Hong Kong, is 89.6). In the rankings, the African continent moved from a position that would have been (in the 2015 table) more or less tied with Surinam, at number 129, to being about equal to Egypt at number 124.38

Africa’s unimpressive improvement in governance is confirmed in other rankings. The 2016 Ibrahim Index of African Governance,39 the 10th produced by the Mo Ibrahim Foundation, recorded a slight improvement in overall governance of one point over the previous decade. But underneath this headline sit some disturbing trends. In 2015 almost two-thirds of African citizens lived in a country where safety and rule of law had deteriorated over the previous 10 years. The continental average score for the corruption and bureaucracy indicator has also declined over the last decade, with 33 countries registering deterioration, 24 of them falling to their worst ever score in 2015. And two-thirds of the countries on the continent, representing 67 per cent of the African population, have shown deterioration in freedom of expression over the past 10 years.40

Regulatory and administrative processes are critical determinants in ensuring decent growth and providing jobs, as other regions illustrate. In fact, as Paul Collier has commented, when commodity prices are low is the ideal time to reset the rules because all actors will understand that they cannot just ride the tide of high prices, and that governance will therefore be critical to promoting growth.

Though no one can predict the future course of commodity prices, and many who have tried have ended up looking foolish, it seems that prices have returned to the ‘old normal’. It would be reckless to believe that the high prices of the last decade will return any time soon, if ever.

Better practice: What development looks like

Despite the challenges Africa faces, we are still hopeful about the continent, because other countries have managed to overcome what seemed to be similarly insurmountable barriers. Poverty is not inevitable. An enormous amount is now known, worldwide, about how to grow economies and improve standards of living.

By the end of 2015, less than 10 per cent of the world’s population lived in extreme poverty, despite the use of a new daily income figure of $1.90 to define this category, up from $1.25.41 In fact, despite protestations about rising inequality between rich and poor, the last few decades have seen the largest reduction in poverty in world history. In the 20 years from 1990, the number of people living in extreme poverty fell by half as a share of the total population in developing countries to 21 per cent, a reduction of nearly 1 billion people.

Much of the reduction in poverty is due to developments in East Asia. China’s economic progress has been responsible for three-quarters of this effect, by lifting 680 million people out of misery in the 30 years from 1980. It has reduced its extreme-poverty rate from 84 per cent to just 10 per cent in 33 years.42

Poverty rates have declined during the last 30 years, in large part, because growth in developing countries rose from an average annual rate of 4.3 per cent from 1960 until 2000 to 6 per cent between 2000 and 2010. It is estimated that around two-thirds of poverty reduction has been a result of growth.

But there is also widespread international recognition and support for the need to go much further, as highlighted by the adoption, on 25 September 2015, by the UN General Assembly of 17 ‘aspirational’ Sustainable Development Goals, the successors to the Millennium Development Goals.43 The extent of poverty in Africa is brought into sharper focus, too, as is noted above, by increasing urbanisation across the continent, where dearth and excess exist in close proximity, and by concerns about the rising inequality worldwide between generations. Whereas, in the past, subsequent generations had an expectation of higher incomes than those born earlier, this may no longer be the case.

Indeed, we do not for one moment underestimate the challenges that African governments face in promoting growth and reducing poverty. The book will, in some detail, describe the very hard choices that African leaders will need to make to change many of the standard operating practices that have developed during the half century or since the independence of most African countries.

At the same time, studies of developing countries worldwide illustrate the need for sustained efforts at promoting governance for extraordinary economic change. In the 1950s, for example, economic development in East Asia was thought to be a difficult, perhaps impossible, task, not least because of so-called ‘cultural’ aspects, including Confucianism. China for many years was similarly seen as hopeless.

Although no country or region is a complete analogue to any other, the East Asian experience does illustrate the astonishing results that a determined government can deliver.

Singapore, which obtained its independence in 1965, a year after Zambia, illustrates a tale of two countries and continents. Zambia’s per capita income in 2016 was, at $1 000, just over three times greater than at independence in 1964; Singapore’s GDP per capita at $56 284 was over 50 times more than it was in 1965. It is difficult to think of contemporary Singapore as a fragile, poor backwater. Yet it was born in crisis out of the separation of the Malay Federation, amid the konfrontasi44 with Indonesia, and riven with multiracial, ethnic and religious sensitivities and differences. While the state under Lee Kuan Yew was at the helm of this transformation, its actions were always guided by commercial principles, and balanced by a devolution of power and shared responsibility among fellow ‘founding fathers’.45

Much can be learnt about Africa’s prospects from what Singapore has accomplished. Despite many opportunities, however, the lessons from this and similar transformations have not been grasped.

Ironically, Africa appeared to go in the opposite direction. ‘In 1968,’ recalls the former prime minister of Kenya Raila Odinga, ‘a team of Singaporeans came to Kenya to learn our lessons, since we were then a more developed country than they were.’ Forty years later, Odinga says, ‘As prime minister, I took a study trip to Singapore with six ministers. That was the latest in many trips taken by the Kenyan government, about which no report was ever written, and where the participants kept everything to themselves. I said that this trip had to be different, that we had to translate our findings into actions. On our return, I asked for a plan of action from each minister on the basis of what they had learnt from Singapore, since there was no point in reinventing the wheel. Each minister was tasked to prepare their action plan against our Vision 2030.’ But after he left government in 2013, Odinga depressingly observes, ‘nothing further happened’.46

Figure 4: East Asia and Africa compared: 50 years of per capita income (in 2005 $), 1960–2013

Source: World Bank national accounts data and OECD national accounts data files, http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators&preview=on#

Yet East Asia seemed to have few advantages over Africa at the point of decolonisation. Traditional East Asian societies were often characterised by ethnic disunity, frail institutions and limited governance outside of the capital, weak democracy, subsistence agriculture, fragmentary external trade linkages and acute social stratification. These conditions were prevalent, too, in many African states.47 Both continents shared a history of colonial (and commodity) exploitation, where the conquerors were sharply divided from the conquered by race, though there was a tendency on the part of the colonial rulers to favour some local groups over others. And in both continents settlers were imposed on the local groups, arousing intense hostility.48 This left them not only with unnatural borders and poor terms of trade, but their people were also left with a devalued sense of their own worth, angry with outsiders yet lacking confidence in their own abilities and suspicious of their fellow country people.

Yet the East Asia region has prospered. As Barack Obama observed during his first visit to the African continent as American president in July 2009,49 colonialism alone does not explain the tribalism, patronage, nepotism, corruption and self-destructive policies that have caused the continent’s development to slip so far behind its people’s needs and its peers in other regions.

While most East Asian countries had to accept a complex ethnic make-up as a result of colonial involvement, as with Africa, this has not in most cases resulted in endemic instability. East Asia, too, has had to cope with underdeveloped human capital, yet its states have, by and large, quickly turned their people into an asset through investment in education. While Africa’s institutional capacity is cited as a structural developmental impediment, some countries in South East Asia have grown economically with institutions at independence far worse resourced than those in African countries.

In fact, in some respects, African countries were better off than their Asian counterparts at independence. Few African countries, after all, can claim the bitter cost and devastation wrought by the scale of conflict in Vietnam, Laos and Cambodia.

Despite the contemporary fad to bash aid as the explanation for all of Africa’s problems,50 Asian countries have also received comparatively large amounts of donor assistance. During the 1960s, aid per capita received by both regions was similar. Whereas some Asian countries enjoyed especially large aid flows (such as South Korea and Taiwan), and continue to do so (Vietnam), they did not allow themselves to become dependent on this single source of income. Asian countries have put aid to good use, because of improved governance, sound polices, effective planning and clearer, firmer local ownership of projects.51

East Asian states that attempted top-down, centrally planned economic control and development were a disaster, just as the model has, too, proven a disaster in those African and other nations that have tried to take this path, no matter how intellectually coherent and tempting it might have been to the postcolonial leadership. Both regions suffered from characteristic problems of socialist gigantism and exploitation. However, those Asian countries – China, Cambodia and Vietnam, for example – that moved off this system immediately prospered.

A better policy environment also helps to explain why some East Asian countries have used their significant natural-resource endowment to their advantage (Vietnam, again, or Malaysia, for example) without becoming overly locked into natural-resource production and hence vulnerable to price fluctuations.

The difference in development results between East Asia and Africa does not originate either in political systems, even though, for some, East Asia’s development success has been used to justify authoritarianism, given that the region’s economies have managed high economic growth rates without conferring full political rights on its citizens.

Democracy and development

Given Africa’s historical, postcolonial experience, we suggest that democracy and development go hand in hand. It is not one or the other, democracy or growth, but these aspects are mutually reinforcing, however attractive African leaders (and some outsiders) might find authoritarianism as a system of government that ‘gets things done’.

As described in Chapter 2, many African leaders have responded to the overwhelming wishes of their citizens by changing from autocratic regimes – the preferred system of government from the 1960s to the 1980s – to electoral democracies. There has been backsliding, inevitably, and many of the institutions and elections that have undergirded them have been imperfect. There are other very good reasons for maintaining these democracies over an anecdotal preference for a ‘benevolent dictator’. For one, as is examined later, such benign autocrats committed to popular welfare, as in the East Asian model, have been few and far between in Africa. Moreover, the empirical evidence is clear: Africa’s democracies develop faster, are safer for the incumbents and are richer than the alternatives.

So far, it has proven difficult to duplicate East Asia’s model of soft authoritarianism in Africa. Because Singapore, for example, is a small and compact island, its leaders could argue that the population had to make sacrifices given the realistic challenges that Malaysia and Indonesia would pose if Singapore remained a poor country. Further, few African countries, given the challenges they face, have seen or can realistically expect the ‘legitimacy through performance’ that was central to gaining and maintaining the confidence that the island’s citizens had in its impressive leaders.

There are many other aspects of East Asia’s relative economic success that have been similarly overlooked by advocates for autocracies. These include high spending on education, bureaucratic responsiveness, creating an attractive policy for business investment, low wages, high productivity, investment in infrastructure, raised agricultural outputs as an initial spur to growth and an overwhelming focus on competitiveness.

Overall, the most notable differentiating factor between Africa and East Asia is, as highlighted in this volume, the relationship between government and the private sector. Private-sector growth in Africa has largely been an anathema, and not just in the period after independence. The colonialists – be they British, French, Portuguese or Belgian – whatever their ideologies in Europe, established highly interventionist states that actively prevented indigenous African economic enrichment, while protecting white settlers, colonial companies and monopoly capital.

By and large, the African leaders that emerged after independence were comfortable with the economic systems they inherited (once stripped of racism), especially as state intervention offered many patronage opportunities. Expanding state control and intervention was one of the few levers open to them in the context of overall state weakness. This pattern was exaggerated by the failure of such liberators to have a plan beyond redistribution to their preferred constituents.52 Subsequently, African elites have remained largely uninterested in major reform and liberalisation, apart from ‘opening up’ the system in piecemeal fashion (from cellphone companies to infrastructure investments), and in a way that has reduced any threat to the status quo.

Therefore, investment growth that diversifies the economies and creates jobs in Africa, notably in industry, has remained very low.

Instilling a sense of urgency and ownership

Beggars work the traffic lights in the city of Fes. They are sub-Saharans, our Moroccan colleague tells us. ‘They are working their way through the country to get to Europe.’ There were, in 2016, an estimated 1 million sub-Saharan African migrants waiting along the North African coast – mostly in Morocco, Algeria and Libya – intent on making their way to mainland Europe. In the Sahel, the city of Agadez in Niger (since the 15th century a gateway between West and North Africa) had become an epicentre in migrant smuggling, with more than 20 000 passing through monthly in 2016, most from West Africa, and Nigeria in particular.53

Given the continent’s projected population increase, without economic growth Africa’s poverty threatens to overwhelm Europe. While Europe will work to secure its borders, and to find and fund the means to keep Africans in Africa, Europeans cannot be expected to be more successful at encouraging and improving African economic growth than Africans themselves, or more committed to this task.

Yet, compared to East Asia, in Africa there has not been the same sense of urgency or the need to introduce reforms in response to this looming crisis, particularly those reforms aimed at radically increasing economic growth and numbers of jobs. In part, this reflects hostility to foreign capital. It also relates to lack of capacity and poor leadership. And it reflects a failure to learn from the experience of others.

The continent’s ambitions should not be to duplicate the Asian path, but to learn from Asia and other fast-growing regions to create a vision to ensure that leaders and citizens can flourish together. Having a ‘good’ crisis – that is, using the opportunity crisis brings to usher in difficult and heretofore politically unpalatable changes – has been a key element in catalysing reform in Asia and Latin America, including, among others Colombia, Chile, El Salvador and Costa Rica.

While identifying and using a sense of crisis, African leaders will have to strive to escape the ‘tyranny of the emergency’ and instead create a common vision of how their countries will progress. We were reminded by one colleague that ‘a disciplined nationalism is the secret sauce of development’. This can be interpreted as the deep commitment to popular welfare exhibited by East Asian leaders, whatever the system of formal government. Failure to develop a common vision by which societies as a whole can advance will mean that leaders will not be able to explain the actions in a wider context, critical constituencies will not understand why they are being asked to make sacrifices, and political stability will inevitably be endangered.

Just as the arguments for addressing this crisis go beyond statistics to a human story of hope and fear, so do the methods. Colonialism and racial exclusion left a deep scar of injustice and rivalry. This has left a legacy of suspicion towards business, and, in particular, foreign enterprises. In this environment, emotion is as important in appreciating the policy options as empiricism.

Leaders will need therefore, at the outset, to develop a ‘growth ideology’ beyond the vacuous vision documents that litter the policy landscape. Rather than employing more consultants, governments and ruling parties will need to drop their animosity towards business. Such an approach calls for government to come to an understanding with business, and to remedy stultifying attitudes that vary from benign neglect to ostentatious antagonism. Business, for its part, needs to clearly understand and deliver on its wider social responsibilities in an open and transparent fashion, designed to build and maintain trust. A failure to achieve this amid a rapid population increase brings the risk of accelerating a social and political crisis, and, ultimately, state failure and, thereby, widespread human tragedy.

The chapters that follow address the critical sectors that make up the economies of Africa’s countries, and illustrate modes of reform and best practice.