It may perhaps appear ironic that in the wake of the 2008
global financial collapse, we entered an era of long overdue afro-optimism. In
2010, McKinsey released a report entitled, “Lions on the Move: The Progress and
Potential of African Economies[i].
This was followed by a range of similarly optimistic projections for the future
of the continent, and from a wide range of sources; from the African
Development Bank in 2011[ii],
to global multinational corporations, who were looking for new markets to
access in a stagnant post-collapse global economy. Let me read you a quote from
UN-Habitat’s State of the African Cities Report in 2014 [iii] (full disclosure: I was one of the authors):
“In recent years,
Africa’s economic growth has seen real gross domestic product (GDP) increasing
at a rate twice that of the 1980s and 1990s. The spread of growth over economic
sectors has been relatively uniform. By 2020, 128 million African households
are projected to have transited to “middle class”, boosting consumption and
spending potentials; and by 2030 Africa’s highest-performing 18 cities might
reach a combined purchasing power of USD 1.3 trillion. Projections over the
longer term include growth of the middle class from 355 million people in 2010
(34 per cent of the total population) to 1.1 billion (42 per cent) in 2060,
exceeding that of China today.”
UN-Habitat State of the
African Cities Report, 2014
This optimistic turn quickly came to be reflected in the
media as well, as can still be evidenced today from the ‘good news’ media
stories that we are exposed to about the continent on international news
channels such as CNN and the BBC. Everybody, it seems, was queuing up in the
wake of the 2008 financial collapse (i.e. from the US, to Europe to India and
China); in a ‘new scramble for Africa’. To be sure, on a continent such as
this, that has undergone such drastic exploitation over centuries, strong
warnings also emerged. Many on the continent were not quite sure whether to
trust this new version of their continent that was doing the rounds in the
global media discourse. As the State of the African Cities Report of 2014 went
on to warn, a more cautious optimism was necessary. After all, at the time;
“… despite ten years of
high economic growth continent-wide, around 50 per cent of Africans today
remain at incomes below USD 1.25 per day, while only four per cent receive more
than USD 10 per day. Using the range of USD 10 to USD 100 per day, Africa
constitutes a mere two per cent of the global middle class and has only one per
cent of its purchasing power.”
There is more to this picture, and I will address some of the
dimensions that require serious attention if we are to understand; (1) how
future fit the continent is, and (2) what needs to be done in order to secure an
affirmative future for the continent. And to be sure, we face difficult and
complex challenges; not least because it is difficult to speak of such a large,
diverse continent in singular terms. Context matters and generalizations often
do injustice to our understanding of the developmental challenges we face, as
well as to the solutions we adopt. So it is a difficult task that I am faced
with tonight, and I must beg your indulgence. In problematising the ‘African
condition’ I may be omitting some of the nuances of it. However, we have a
short amount of time, and despite the difficulty of the task I have been set,
we need to ask some basic questions.
And the very first question is, “what do we mean by
‘future-fit’?” In simple terms, we can think of future fitness in terms of
resilience, sustainability, equity and prosperity. There is perhaps more to add
to this, but for now this broad characterization will have to suffice.
Additionally, the question of how ‘future-fit’ the continent
is; is linked to the questions such as:
1. Is the continent undergoing a
transition in the first place?
2. If it is,
a. What kind of transition is it?
b. Who are the protagonists?
c. Where is it leading?
3. And most importantly, what can we
begin to do now to secure a more equitable and sustainable future for the
people who live on the continent? What elements, seeded now, can grow a more
sustainable, resilient and prosperous future for the continent and all those
who live within it?
The short answer to the question of whether the continent is
undergoing a transition or not is, “yes”, most certainly! That does not mean
that historical inequalities and negative trends are not being reproduced in this transition. What it means is that it
is undeniable that some fundamental changes are unfolding on the continent. So
let’s take a look at some of the dimensions of change that are unfolding on the
continent:
One of the key dimensions of change on the continent today is
urbanization:
·
African
cities are exhibiting the highest growth rates in the world, even though
national urbanization levels remain low, especially in Eastern and Southern
Africa.
·
Over
a quarter of the 100 fastest growing cities are in Africa.
·
The
number of African urban dwellers is projected to increase from 400 million to
1.26 billion by 2050.
·
The
global share of African urban dwellers is projected to rise from 11.3 per cent
in 2010 to a 20.2 per cent by 2050.
·
A
critically important factor in the urbanization trends in Africa is the
dominant growth of smaller, intermediate and secondary cities (75% of urban
growth is being absorbed in small to intermediate cities).
·
Another
critically important factor is that this urbanization is taking place without
significant industrialization.
When it comes to population
growth:
·
The
African population is projected to double from 1Bn in 2010 to 2Bn in 2020 and
may surpass 3Bn by 2070 (SOAC, 2014)
·
Average
densities will increase from 34 to 79 persons per km2 in the period between
2010 and 2050.
·
Africa’s
labour force is projected to reach 1.1Bn by 2040, when continent will be more
than 50% urbanised.
Another critical feature of the transition that is underway on the continent is the ‘youth bulge’:
·
In
2012, Africa was recognized as having the youngest population in the world,
with around 200 million of the population between the ages of 15 and 24 (i.e.
20%). This is projected to double by 2045 if growth trends persist.
·
To
put this into perspective over 40% are under the age of 15, and 20% are between
the ages of 15 and 24.
·
According
to the World Bank, African youth constitute about 60% of the unemployed on the
continent. The upshot of this is that most youth are absorbed into the informal
sector, or into insecure work. Lastly, it is important to mention that this
youth unemployment is also drastically gendered.
It is also very important to account for the emerging African
middle class, as it is a complex phenomenon, not to be compared to the middle
classes of the developed world:
·
By
2020, 128 million households will be middle class.; from 355 million people in
2010 to 1.1 billion in 2060 (i.e higher than that in China today).
·
This
middle class is defined as those living on between USD 2-20 per day, and
constitutes around 34% of population.
·
Floating
middle class: USD 2-4 per day (60% of the aforementioned 34%)
·
To
put this into perspective, as mentioned earlier; only 4% of Africans living on
incomes higher than USD 10 per day, and 50% live on less than USD 1.25 per day.
·
If
we compare Africa to the ‘global middle class’ (i.e. those living on incomes
that range between USD 10-100 per day) then Africa constitutes only 2% of global
middle class.
Yet the transition that is underway on the continent is a
fraught one, primarily because of the predominant and pre-existing conditions that
plague the socio-economics of the continent. The majority of African cities are
constituted of slums and informal settlements (between 60-80% from West to
Central to East Africa). Poverty remains the majority condition of most people
on the continent. Infrastructures such as road, rail and air are severely
lacking in many parts of the continent. So are service provisions such as
electricity, clean water, sanitation, healthcare and internet access. Food
insecurity continues to plague many Africans.
Moreover, there are severe institutional challenges – whether
in government or the private sector – that need to be confronted across the
continent. The dominance of national and local elites – who are typically
connected across public and private sectors – serves to deepen entrenched,
inherited inequalities on the continent.
Maintaining political stability is also a critical challenge,
as political turbulence and insecurity wreaks havoc on developmental agenda’s,
and serves only to thwart the kind of stable investment that is required for
long term growth. It may be that political models – in particular democratic
political models – may have to evolve to fit the African context more
appropriately. That is, African countries may have to negotiate what democracy
means for them on their own terms, rather than simply importing democratic
ideals and practices.
…
So where does this leave us in terms of our options? How can
we make decisions today to secure a ‘future-fit’ trajectory for the continent?
One of the most critical factors to consider when formulating
strategies is “where are we now?”, and “where to from here?” What is emerging,
that can be leveraged to bring about the kind of outcomes we desire. In this
respect, it is – in my view – great folly to overlook the vast potential that
sustainable solutions, green technologies and infrastructure, as well as the
emerging innovations of the fourth industrial revolution; have to offer the
African continent.
The African continent is – in general terms – largely characterised
by a lack of adequate bulk infrastructures and the high pre-existing levels of
unplanned slums and informal settlements (particularly in cities). These negate
the easy introduction of these bulk infrastructures and commensurate service
provisions. Green technologies and systems, however, are largely decentralised
or semi-decentralised, and can therefore function in the absence of bulk
infrastructure provisions, or link into existing bulk infrastructures.
Moreover, from a developmental perspective, the absorption of
green and sustainable technologies can help seed small to medium scale
enterprises on a large scale, driving economic growth and circulation of cash
flow at the levels where it is needed most. This can also help absorb unskilled
and semi-skilled workers into the workforce, that is, at precisely the levels
that employment creation is desperately needed.
Employment can be significantly boosted through the
introduction of technologies such as solar panels, solar water heaters, grey-
and black-water recycling systems, biogas digesters, energy savings devices,
energy savings companies, renewable energy micro-grids, small-scale wind and
hydro energy technologies, urban agriculture and permaculture operations,
agro-industrial processing, public transit systems, waste recycling systems,
and so forth.
The introduction of semi-decentralised and decentralised
green technology solutions and systems can also help lower costs and buffer
producers and households from exogenous shocks. Fifty to seventy percent of the
household budgets of poor African households are spent on food, water, energy
and transport, rendering them vulnerable to external shocks. Buffering poor
households from these shocks can go a long way towards making these households
– and local authorities (who will then be able to collect local revenues and
decrease their dependence on central governments) – more viable.
This is not just healthy for households and governance, it is
also healthy in the sense that it will help stabilise and promote the emergence
of an African middle class. Stabilising this middle class in genuine terms, and
enabling them to be able to afford assets, have disposable income and grow into
a consumer class, requires more than a conventional industrialisation
programme. It requires a transformative programme of industrialisation; one
that purposively seeks to innovate in service of the future sustainability of
the African continent.
The opportunities afforded by the fourth industrial
revolution – for leapfrogging Africa’s development onto a more equitable and
sustainable trajectory – are vast. For example, the fourth industrial
revolution can facilitate the roll-out of green infrastructures and
technologies through: financing, insurance, micro-credit and banking services; advanced
revenue collection systems; sharing economy offerings; education and skills
development; real-time data and information synthesis and analytics;
coordination of resource and other material flows; automation, mechanisation
and robotification; logistics, transportation, planning and spatial
development; as well as capabilities that are yet to emerge or be
innovated.
As mentioned earlier; in Africa, unprecedented urban growth
is proceeding in the absence of any significant industrialisation. The fourth
industrial revolution presents a massive opportunity to leapfrog African
productive economies into a wholly new space; one where its internal markets
grow and its external markets are other
developing world economies (preferably their neighbours).
Since the end of WWII the mantra proposition for the African
Renaissance has been to beneficiate its resources by following the traditional
industrialization trajectory that was undertaken by the global North. In the 21st
Century, however, new opportunities are presenting themselves; opportunities
that could be leveraged for a wholly different industrialization and
diversification trajectory for the continent.
In this talk, I have primarily dealt with the question of
what kind of developmental and economic diversification trajectories are
available to us to actualize a ‘future-fit’ continent. There are of course, a
broader range of factors to consider, and we do not have the time to go into
all of them here today.
Suffice to say that a future fit continent is something we
have to begin building now; and what is clear is that it requires that the
choices that African countries make are characterized by; (1) ensuring the
sustainable and equitable use of its resources, (2) leapfrogging the
technological and infrastructural developmental trajectories that were adopted
in the Global North in the 20th Century, (3) building robust
institutions that can deliver on their mandates in the interests of all who
constitute society, and (4) embracing the potential for innovation and mobility
on the continent, which in large part resides in its large youthful population,
and (5) engendering political stability through leadership that is transparent,
accountable and responsible, as well as bold in respect of the decision-making
that is required to navigate towards the desired long-term horizons for the
continent.
[i]
McKinsey (2010). Lions on the Move: The Progress and Potential of African
Economies, McKinsey Global Institute, McKinsey and Company.
[ii]
AfDB (2011). Africa in 50 Years Time. The Road Towards Inclusive Growth,
African Development Bank (ADB) (Tunisia, Tunis), September 2011.
