Is Africa’s Meteoric Rise to Riches Sustainable?

Robert Rotberg, Christian Science Monitor, June 19, 2014

Sub-Saharan Africa is indeed rising. Thanks to Chinese demand for raw materials, especially petroleum and iron ore, much of Africa is growing (as measured by GDP per capita) at nearly 6 per cent per annum.

Many of the globe’s fastest advancing countries are in Africa.

But is this meteoric economic rise sustainable? Will African economies expand fast enough to deliver jobs, education and health services as their populations surge relentlessly?

If China’s own appetite for metals, minerals, natural gas and petroleum falters, African earnings will inevitably suffer.

African growth is commodity driven. Manufacturing for overseas markets, even in South Africa and Nigeria, is still limited. The export beyond Africa of high valued crops, as in the shipment of Brazilian soy beans to China, is in its infancy.

Tourism, remittances and call centres provide some financial benefit in a few countries, but the recent rise of Africa depends too dramatically on its largely unprocessed raw materials.

China could be transferring skills and technology to its African partners, but mostly it is not. Moreover, on many Chinese construction projects, the managers and many of the unskilled employees are Chinese. Africans are employed and involved only at the margins. Indigenous skills therefore are rarely nurtured, thanks in many cases to special bargains between Chinese enterprises and authoritarian African rulers.

With the great expansion of North American gas and oil supplies, major markets for African energy exports have vanished. That means that Africa’s commodity sales depend more and more on Asia and, occasionally, Europe.

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Moreover, Africa’s continued rise must overcome a series of difficult consummate challenges over the next several decades. Most severe is the demographic dilemma.

Sub-Saharan Africa is about to explode numerically.

It’s one billion population will double by 2050 and more than triple by the end of the 21st century. Nigeria, with 173 million people now, will swell to 730 million in 85 years, becoming the third-largest state in the world.

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How will Africa feed, house and secure such an unexpected population explosion?

Africa could have a demographic dividend, based on its massive population growth and the resulting preponderance of working-age adults. But it is not clear where the jobs will come from.

When Southeast Asia benefited in the twentieth century from its demographic dividend, job creation kept pace with population growth and the new–largely–industrial workers became avid consumers. Good governance and good management made this major growth acceleration possible.

At the heart of these important changes in Asia–as now in China–was a critical expansion of educational opportunity and quality. Africa’s continued rise is greatly handicapped by it weak educational outcomes. A few sub-Saharan African countries provide primary education for all eligible children, and many others do well.

But secondary enrollments, especially for girls, are less than robust. Completion rates are only middling. Even in South Africa, only half of those who begin secondary school finish, and of those who finally sit the school-leaving examination (“matriculation”), less than 50 per cent pass and only 12 per cent achieve results that qualify them for university entrance. {snip}

{snip} Sub-Saharan Africa will find it hard to enjoy a demographic dividend if proposed high-tech and other modern industries cannot be staffed locally.

Among other challenges threatening the sustainability of Africa’s rise is its widespread energy shortfall. Even major countries such as South Africa and Nigeria lack sufficient electrical power. Spain’s electrical power capacity is the equal of sub-Saharan Africa’s total, although new Chinese-constructed hydroelectric facilities may end power shortages by 2025.

Corruption also hampers growth and detracts from the kind of improved governance that is needed to move Africa forward. Except for Botswana, Rwanda and Mauritius, corruption is everywhere–not least in the petroleum producing polities. South Africa, Angola, Nigeria and Sudan are all wildly corrupt, deterring foreign and even domestic investors.

{snip} Better schooling, more and better jobs, new foreign investment, reduced corruption and other essentials depend on improved leadership–on the rise of Mandela-like politicians.

If the middle class in Africa fails to demand or develop such leaders, Africa could easily collapse under the weight of its coming population burden. The demographic dividend could instead become a demographic disaster, with more civil wars, more criminalized cities, more despots and fewer democrats.

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