Making Africa a Future-Fit Continent

An address delivered by A. Prof Camaren Peter of the Allan Gray Centre for Values-Based Leadership of the Graduate School of Business at the University of Cape Town; to the participants of the Leadership in Extractives and African Development Programme (LEAD).

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 21^st 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 20^th 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.

        

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[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.

[iii] UN Habitat (2014). State of the African Cities Report 2014: Reimagining Sustainable Urban Transitions, United Nations Human Settlements Programme (UN Habitat), Nairobi: Kenya.

Obsessing Over Day Zero

"Merely thinking about what the world wants gets you nowhere: you have to think about what the world ought to want, and just doesn’t know yet that it can’t live without."

Theodore Gray 

After three years of drought, Cape Town’s taps are set to run dry within the next few months. “Day zero”, as it has been termed, is ostensibly approaching unless some kind of “miracle” occurs. It is with great curiosity that I have been observing the prevailing obsession with “day zero”, which has quickly become the centre-piece of social media, news media and social conversations.  The only other topic that is receiving as much airtime is the ‘who is to blame?’ brigade, that has gradually grown in chorus as middle class outrage has grown.

Cape Town’s middle classes are used to living in a relatively well-run city, and apart from electrical blackouts and load-shedding that occurred years ago, and the avalanche of summer fires that spark up every summer, there has been little that directly affects their lives in a debilitating way. Of course, the same is not true for the poor and working classes, who struggle with service delivery, affordability and access to infrastructures. The lives of those living in informal and semi-informal settlements are undoubtedly worlds apart from their middle class counterparts; temporary outdoor sanitation, shared water standpipes, illegal electricity connections, shack-fires and un-managed waste, pollution and drainage plague their daily lives. You won’t hear much about that however. Instead, as journalist Chris Bateman put it (somewhat hyperbolically),

“The indigent, who’ve always collected water from communal taps – might finally have something we don’t – running water”.

Yet while the plight of the poor evokes sympathy from the middle classes, it rarely evokes the same levels of outrage that have unfolded at the imaginary of day zero as it quickly approaches. Images of Armageddon scale end-of-days disaster scenarios unfolding are heatedly aired and rapidly amplified on social media. Everything will grind to a halt, we are told. The city’s economy will implode. Do we know what we are in for?

Well prepare for long-queues of outraged residents jostling, fighting and spitting bile, an unholy urban mess requiring martial law style intervention by the military to contain. Prepare for the death of tourism, agriculture, industry, schooling and the closure of all official local government offices and businesses. Prepare for serious damage that will be done to bulk water infrastructures as water pressure and regular supply are denied, destabilising infrastructure due to irregular flows passing through the system (this concern is entirely valid and foreseeable).

Cape Town’s middle classes, who are typically unschooled and inexperienced in undertaking efforts that necessitate collective action are falling over themselves, spluttering with prescient rage  at the denial of their ‘basic human rights’. There is even a petition to the United Nations that has done the rounds on social media; a truly ironic and self-centred undertaking given the patent invisibility of the plight of the poor and marginal in the city. In a spectacular act of real-time revisionism of history in the making, we are reminded, more than anything, of the particular middle class predisposition to render themselves ‘more equal than others’. First among equals so to speak.

In my daydreams I picture the middle classes rising up, appropriating Ses'khona’s “poo-protests” and laying waste to City Government buildings with mountains of portaloo poo that has gone uncollected for too long. Perhaps the DA will move Herman Mashaba down to run Cape Town in the wake of Mayor Patricia de Lille’s soon-to-be departure. Anything’s possible it seems, when a city runs out of water.

I am labouring the point, but it is particularly bizarre to observe how the discourse over day zero has emerged. Day zero is being treated as an end-point, an insurmountable eventuality that will cripple all the key functions of life, work and service provision in the city.

The reality, however, is that this drought has been three years in the making, and for many years now, those who understand that the climate is changing, and that the Western half of the country is steadily drying, have been making the case for adaptation. For over a decade many of us have been actively engaged in educating and informing leaders, policy-makers and planners that there is a pressing need to begin preparing for water-scarcity conditions to unfold in the city (i.e. whether they occur gradually or abruptly). The need to adapt to the new reality has been made abundantly clear, not just to those in power, but also to the very same middle class citizenry who now appear to be caught totally unawares in the cross-fire of the impacts of a severe, long-term drought.

The issue that should be provoking outrage is the slow progress of efforts towards adaptation. We know what is happening with the climate in the Western Cape. Why have we been so slow to prepare for it? And yes, the bulk of the blame should be going towards local and provincial government for their lack of preparation and their inadequate communication and planning for adaptation. However, middle class ignorance must also be taken to task in this respect, as an active, educated citizenry who are themselves pushing for adaptation and embracing behavioural change would go a long way towards speeding up the transition to a more water resilient city and province. This is a fact, it is not speculative. We’ve been slow to act and we’re paying the price.

I for one am glad that day zero has sparked up the fears and imaginations of the city’s middle class residents (as well as businesses and industries they own and/or work in). This is simply because the greatest difference in potable water consumption and sanitation can be made through their actions and forward-looking investment in water efficiency measures. It is they who – with the support of local and provincial government – can make the largest difference in ensuring the long-term sustainability and resilience of the city and provinces water supply. Yes it is true that industry and agriculture are the largest consumers of water overall, but there is a lot that can be done simply by adapting middle class households and residential properties, as well as businesses, to the realities of water scarcity.

If day zero is the tipping point that will help catalyse this transition then it would have served a good purpose. However, if it turns out that day zero comes and goes within a month or two - and private sector water providers spring up and take the gap (which is a high likelihood) - then it is likely that all the hype around it would have proven largely ineffective, as the middle class citizenry return to ‘business as usual’ yielding little long-term behavioural, infrastructural and systemic changes to speak of. It would all have merely been another storm in a teacup and it might even result in a push-back and distrust of ‘disaster narratives’ that emerge in the future. The upshot of ‘crying wolf’ may be an even more disengaged and apathetic citizenry, who have many other pressing concerns in their daily lives to attend to.

We have the attention of the broader citizenry right now. It is worth making strategic and visionary use of it to seed and catalyse the transition to a new understanding of climate change, resource scarcity and the need for adaptation in the city and province. It is worth capitalising on the attention that is being drawn to the issue to stimulate broader engagement and involvement of the citizenry, business, industry and agriculture in the processes of planning and development in the city and province.

This is a key moment for the city. It can unlock a wholly new, constructive trajectory for the city and its residents. It is an opportunity to increase mutual understanding and dialogue, and forge unity in the citizenry and the various sectors of society in the Western Cape. We can begin learning how to work together, and to actively take control of the processes of preparing for the future. We can become more engaged and socially cohesive at the local level, and learn to work together to safeguard our communities and work-places from the eventualities of the 21^st Century. Ultimately, we can strengthen local democratic practises through this crisis.

The problem with how the day zero narrative has been unfolding is that it has been bereft of stabilising, visionary leadership. Rather, the city and province miscommunicated the extent of the crisis for a few years in the run-up to day zero in order not to ‘panic’ the citizenry and the various sectors of the economy. Moreover, there were some industry and business actors who simply refused to believe local government’s projections, relying instead on their own internal experts who made false assumptions and made incorrect calculations as a result. I recently spoke to a senior official in government who was exasperated at having to wade through bogus calculations and correct them. There are even industry players that decided to escalate production, in a ‘tragedy of the commons’ styled set of logics. There is little doubt that strong, concerted leadership could have diminished these challenges and helped to forge a broader consensus on how to mitigate water scarcity.

While the proverbial glass may not be half-full in reality, it is worth considering what can be gained through this crisis. It may well not last much longer, but it will undoubtedly revisit us because we live in a province that is extremely sensitive to climate change impacts. 

The Western Cape Premier’s Helen Zille’s very latest piece was all scare tactics and alarmist bluster, sounding the alarm about the great emergency that has descended upon the city as if we didn’t know it was coming for ages. It was absolute guff, and for more reasons than I can deal with here! The fact is that these ‘crises’ and ‘anarchy is on the horizon’ narratives are part of the problem. Calm down, plan and do your job. Moreover, do what you should have been doing ages ago when you learned that climate change would ultimately impact the Western Cape severely, even if there wasn’t a clear idea of when exactly each crisis would take place. It is not only disingenuous; it is blatant lies to suggest that this crisis somehow ‘crept up’ on officials (as she puts it “Suddenly, after months of coaxing”). The truth is that there have been very many studies and documents that have warned of the eventuality of drought and water scarcity in the Western Cape. And all this has been written about and communicated many years ago when Helen Zille herself was Mayor of Cape Town.

Yet for all the 'coaxing' (and now the turn towards punitive measures), the average citizen has precious little at their disposal to meet the city’s new 50 litres per person per day limit (i.e. now reduced from 87 litres), simply because the tools to monitor, adapt and limit usage have not been put in place. Indeed, how does an average citizen actually know how much water they are using, and simply at the household level at that? Many are already making courageous efforts to save water, but what enables them to know how much they are using? How much does a dishwasher use? How much does a washing machine use? How much water does a shower or a bath use up? What about cooking, making tea and coffee? How do you calculate your usage; does it include the flushes at work, or the teas and coffees you purchase. How much double accounting is going on? How much is being left out that should be counted? Is there an app that one can use to get an estimate at the very least? If these tools exist, why are they not widely publicised?

Placing the blame on a confused citizenry that has been misled about the real nature of this crisis in the run-up to the crunch point is – simply put – ridiculously poor leadership. It appears that even when we are deep in substantive crisis, our politicians are more likely to think about how it affects their votes, and as befits them, put their effort into scripting a narrative that conveniently casts them in heroic terms. The average citizen should, at this point, feel fully justified in telling them to take a hike. They screwed it up; they should rather be honest about it, humbly beg forgiveness and get on with the job of fixing things. And to be sure, the fixes need to be constituted of more than just short-term disaster risk management planning and implementation; it needs to be constituted of a clear set of actions that will help build resilience of the city and province into the long term.

Failure to take actions, implement plans and put the tools in place to reduce water usage, have more accurate monitoring and evaluation, and significantly transition our bulk and local water infrastructures to high-efficiency recycling and reuse will – in short – be a charade of leadership designed to cope with short-term crises and not addressing long term systemic vulnerability. This failure would essentially mean that while the middle classes invest in boosting their resilience (and as private sector water services expand), the real crisis that is building – where the poor and marginal are increasingly squeezed by higher tariffs and service delivery failures, ultimately leading to outbreaks of disease, deaths and unconscionable and inhuman living conditions – will largely remain unaddressed. In the end, a lack of long-term planning may mean that “let them drink wine!” might well end up being the only recourse the middle class takes in respect of the poor and marginal in this city, as has been the historical tradition in the Western Cape. 




P.S. After posting this blog on 26/1/2018 the City of Cape Town has put out a guideline to how to achieve 50 litres per person per day in the form of the infographic below. Better late than never they say, but this piece argues otherwise ... nonetheless, please share it widely, even if you're not in Cape Town!

Radical Economic Transformation in South Africa: How Radical Are You Prepared to Be?

South Africa has reached a tipping point, and change beckons. Anathema to some, in particular the upper middle classes, this change goes by the name “radical economic transformation”. Until now, the full weight of the sentiment underlying the push for more radical intervention in the South African economy was not taken as seriously. It was the language of the ultra-left Economic Freedom Fighters, who pursued a radical agenda that they had once sought to reintroduce to the centre of ANC politics when they were still members of the ANC Youth League (i.e. before they were expelled from the ANC). After they were kicked out they took the fight to the ANC, eating significantly enough into the ANC’s vote to help the ANC’s main opposition – the Democratic Alliance – to victory in three of the country’s major metropoles (the opposition took four, but relied on their support to take three i.e. Johannesburg, Pretoria and Nelson Mandela Bay).

Yet the reason why radical economic transformation is now being talked about in every home across the country is that it is the stated new policy direction of the ANC. In a bid to survive its disastrous presidency, the ANC has opted to take the wind out of the EFF’s sails and present themselves as prepared to make a return to their core values as a movement. They have recognised the widespread societal discontent with the lack of adequate transformation, economic upliftment, access to services, social mobility and the conditions of poverty and near-poverty that the black working classes have been relegated to in the new South Africa, and have now decided to do something about it. There is no doubt that there is a sincerity behind this push for a new set of economic policies, yet the question regarding what radical economic transformation entails in practical terms remains a matter of debate.

For this reason, many commentators have been quick to dismiss it as yet another amorphous term that has been deployed to fool the masses into casting their votes for the ANC at the next presidential elections in 2019. With a steadily decreasing portion of the national vote under Jacob Zuma – a presidency that took a wrecking ball to the tripartite ruling alliance, as well as to the state and state owned enterprises and companies, leaving the country wracked with uncertainty, economic decline, unemployment, rampant corruption, the highest inequality in the world and widespread discontent – it is reasonable to make the conclusion that the new rhetoric is simply political spin that has been designed to ensure that power remains within the hands of the ruling party. Indeed, some have referred to this new turn of events as the “Zanufication” of the ANC, in reference to neighbouring Zimbabwe.

On closer analysis, however, it is easy to see that what is actually transpiring is that a new debate has been initiated, a debate wherein significant contestation around what kind of (radical) economic transformation is required to restore faith in the role of government and the state, as well as the kind of economy and society that South Africa aspires towards being. Simply put, South Africa has entered a moment in which a new reformation of sorts is in the offing. It is potentially the most significant turn that the country has taken since it became a democracy in 1994 and proceeded to deregulate and liberalise its economy in 1996.

The public debate on what kind of radical economic transformation trajectory to adopt has only just begun, but it is worth tracking what is central to the nature of the key arguments that have emerged. And with the push for radical economic change being an idea that has long resided with the South African left, in one form or another, it should come as no surprise that the majority of initial contributions have emerged from left thinkers and commentators. The centre-left are also weighing in, but their contributions have yet to emerge in the same numbers as the traditional and far-left have.

Yet there is one key observation that can be made about all of the currently floated ideas of what radical economic transformation should be, that is; they are all largely redistributive in nature.

The far left – such as the EFF – propose nationalising the mines, banks and the South African Reserve Bank; notions that send tsunami level shock waves through the private sector, as well as speculative international investors and global markets. It proposes using the country’s key resources and assets, in addition to taxes, directly – through government – for the good of the people. It smacks of the socialist politics of Latin American leaders such as Evo Morales and Hugo Chavez, which aimed to nationalise land and resource bases in service of social equality imperatives.

The traditional and centre left propose using the large South African state as a vehicle to create a new class of black industrialists who will be able to obtain a more significant share of the ‘pie’ (i.e. the South African productive economy) i.e. through allocating state-led projects mainly to black business. This remains a redistributive trajectory as it is not entirely certain that businesses that are nurtured through state funds will be able to transition into competitive markets within the private sector with ease. Indeed it may well prove to be the case that they end up fighting each other off in the quest to establish monopolies over state projects and tenders instead.

Even the traditionally liberal politics and conservative economics of the official opposition – the Democratic Alliance – has swung towards the left and reinvented itself as a more social democratic party. Recently on television I saw the leader of the opposition – Mmusi Maimane – speaking from a podium that had a message attached to it, one that ensured the public that the DA would protect its social grants. This while its now embattled ex-leader – Helen Zille – was waxing lyrical about the supposed ‘benefits’ of colonialism and the need for a meritocratic economy in South Africa.

There is no doubt that there is a need for significant redistributive reforms to the South African economy. Given South Africa’s historical injustices, as well as its current high levels of socio-economic inequality – an inequality that clearly delineates primarily along racial lines – it is no doubt that the colonial, postcolonial and post-Apartheid era dispensations share common fundamentals at the systemic level. Inequality is so deeply rooted within our very systems of governance, that relying purely on markets and trickle-down economics, with mild social democratic reforms, is bound to result in disappointment.

Yet it is not enough merely to discuss radical economic transformation in the context of redistribution alone. It is entirely unavoidable to talk about the radical economic transformation of an economy without asking what is going to drive the engine of the economy i.e. its productive capacity. Simply put, what kind of production will grow (i.e. I am not referring to growth here in the sense of GDP growth, but in terms of the productive economy), and who will be buying what we produce?

In a sense, a redistributive set of reforms assumes that the engine of the economy is okay the way it is. Metaphorically speaking, a redistributive agenda only addresses the ‘power’ coming from the ‘engine’ of the economy. It redistributes the ‘power’ but does not ask whether the engine requires an overhaul. In doing so, it is doomed to difficulty, frustration and failure. An economy needs to produce competitively and usefully in order to remain relevant within regional and global markets. It needs to be thinking about the engine that drives it as much as what that engine produces.

And real economic engines are ones that not only produce, but innovate. They innovate new offerings and capture and grow their markets. They do not simply capture the state and grow on the basis of its offerings alone (i.e. such as large state-led procurement and infrastructure deals). It is in this sense that I pose the question that is the title of this piece, namely, “How Radical Are You Prepared to Be?”

The use of the word radical implies a complete break from the norm, and not a mere perpetuation of it; something that changes the fundamental nature of the existing system. With this in mind, it is clear that if we are not addressing the question of what kind of economic engine our country is transitioning towards, then we are not being radical about economics; we are merely being radical about social equality i.e. we are using the economy to achieve social equality as an end in itself; we are not attempting to change the fundamental structure and of the economy in a significant way.

Industrialisation, which is desperately needed in the current South African economy – primarily to alleviate high levels of unemployment – will not happen by itself. It needs the help of government and the state to help shape it. Whether in capitalist, social democratic or socialist and communist regimes, governments and the state play a key role in shaping the economy in general, and the productive economy in particular. Ensuring that the work force are employed, is always a top government priority.

For example, in all the emerging positions on radical economic transformation, we have heard very little being said about the criticality of the proposed nuclear power deal – the largest in the world at 9,6 GW – that is estimated at one trillion rand, but which will likely triple or quadruple over the course of the project. Some comments are made here and there about the potentially crippling effects of the debt that the deal may incur on current and future generations, and potential to significantly weaken sovereignty as a consequence of issuing ill-advised guarantees for foreign loans, but the key danger that the deal presents to the economy has largely gone un-mentioned.

That is, the danger that the nuclear deal presents to the capacity of the engine of the economy to significantly innovate and evolve has gone un-mentioned. Simply put, if such large amounts of funding are guaranteed by the state for large-scale bulk infrastructure nuclear builds – which have extremely high upfront capital costs – then the nuclear deal will effectively crowd out other significant investment opportunities in the energy sector in South Africa.

In particular, South Africa will likely not feature as a participant in the growth of the renewable energies sector in particular, a sector that has unprecedented growth, speculative investment and employment creation profiles. For example, according to Fortune Magazine solar and wind energies are creating jobs 12 times faster than other industries[1]. Speculative investment into the renewable energies sectors has now long been 4-5 times as much as that going into fossil fuel technologies, indicating that should we make the choice to diversify the energy sector through a renewable energies trajectory, we would likely attract much needed foreign investment as well.

With such a large African market on our doorstep, one that desperately requires small to medium scale energy solutions to meet the needs of its most vulnerable and poor – many of whom live in slum and informal settlements that lack access to bulk infrastructures and service provisions – it makes eminent sense to be putting significant effort into growing renewable energies solutions in South Africa and innovating offerings of its own to take out to the rest of the continent. Moreover, we have the economic base – i.e. reputable service and manufacturing sectors – through which to catalyse expansion into new, emerging African markets.

Renewable energies can be implemented at small and medium scales, create orders of magnitude more employment than conventional bulk energy infrastructures, and can stimulate a range of value-chain related industries such as energy savings management companies, small scale maintenance and installation entrepreneurships, and skills development and training agencies. They are the natural starting point for the radical transformation of the productive economy in South Africa i.e. the heart of the engine itself, its energy sector. 

Historically, the South African economy has been understood as clustering around a ‘minerals energy complex’, off which its manufacturing base was later established (most of which was strongly linked to the mining sector, as well as the availability of cheap energy). My contention would be that a truly radical approach would seek to diversify the energy sector and open it up to a broader range of entrepreneurs, organisations and agencies within South African society itself. 

Research and studies suggest that South Africa only need consider the need for nuclear energy between 2025 and 2035. It makes no sense to be desperately attempting to tie up a nuclear deal with; (1) guaranteed escalating costs and possible national bankruptcy, (2) a Russian company that has overcommitted and under-delivered/faltered entirely on a number of smaller scale projects around the world, (3) a potential to tie South African consumers and producers into potentially higher future energy costs (especially if the Russians absorb most of the upfront capital costs) than would otherwise be the case if a competitive, evolving energy market were in place (i.e. some renewables have reached parity with conventional energy sources and will likely become more cost effective as they go to scale and new innovations emerge), and lastly that it would crowd out the space for innovating new systems, product and service offerings that can be leveraged to open up markets on the continent and play a critical developmental role at the same time.

The energy sector is the most sensible entry point to seed the transition of the South African economy i.e. by drawing on both offerings within the information and green technology sectors to establish the foundations and capacities to establish a competitive production and innovation base within the South African economy i.e. to upgrade its ‘engine’ so to speak, so that it can access new markets, most of which lie on its doorstep. With a well-established tertiary sector in place (i.e. services), South Africa has the distinct advantage over others on the continent, and can use this to its advantage in making inroads into markets across the continent.

Moreover, from a developmental perspective, it can help seed a developmental transition that could well eventually underlie an “African Renaissance” in the process. By addressing the four main sectors that affect African household budgets, that is; the costs of water, transport, energy and food, it can help stabilise household budgets in the medium to long terms by decreasing their vulnerability to exogenous factors (e.g. scarcity/cost of fossil fuels), as well as dampening monopolisation and rent-seeking through ensuring diverse competition in the sector.

In this vision of radical economic transformation, a revolution in renewable energies will be followed by the full suite of available green and sustainable technology options, systems and built infrastructures. From mass public transit systems, to waste and water recycling, reviving old industrial zones, to permaculture and agro-ecological sector offerings, the potential for seeding new growth is indisputable.  And the next new market for these offerings, according to most global corporates and agencies, is right on our doorstep. And given the challenges we face in our country, it is likely that the innovations we produce will prove useful across the rest of the continent.

If our industrialisation strategy is to compete on the same terms as China or India, the large ‘factories’ of the world, or with North America and Europe i.e. the developed nations, then we will likely succeed in achieving only marginal growth, if any. We simply cannot compete with them at what they do. We need to compete with them by linking into the new offerings that have emerged and growing our capacity to innovate solutions that fit the African context more suitably i.e. for example, offerings that are decentralised, low tech, easily maintained, cost effective (i.e. low cost, innovative financing schemes), reliable, robust and so forth.

While it goes without mention that a redistributive agenda is entirely necessary when we talk of radical economic transformation in South Africa, it is also critical to recognise that without taking aim at the engines of production in the South African economy, we will not achieve any significant restructuring of the actual economy.

It also goes without saying that the rampant and deep corruption that has come to characterise the South African state and government has to be addressed before any kind of future can be reasonably entertained, but other authors have addressed this comprehensively and I have chosen not to focus my energies on reiterating the obvious. Rather, my goal with this piece is to raise the question of what a truly radical new vision of the South African economy would be, and how central and critical the role of the productive economy is in achieving that vision.

We will remain doomed to a future of ‘second-rung’ economic activities should we not take this opportunity to go beyond mere redistributive reforms and seed the potential for economic diversification through harnessing new growth offerings. For decades there has been a consistent mantra; that significant industrialisation is required to take the South African economy forward, and that it would need to diversify significantly to achieve this. That opportunity is now on our doorstep, should we approach it in a half-baked manner, and fail to conceive of a truly radical vision – one that is not only socially radical, but is radical in terms of economic transition – then we would have failed to leapfrog ourselves into the most significant emerging economies, ones that will increasingly dictate how the 21^st Century unfolds. It will be a ‘revolution without a renaissance’, and that, in effect, is a revolution that is incomplete.

If there is to be upheaval, uncertainty and radical change, then let that change be constructive and productive, let it be change that brings us closer to being the kind of society that we aspire to being, the kind that is set out in the constitution, and reflects a deeply held set of shared beliefs about what kind of society we should be. Let that change result in tangible benefits for those in society who need it most, and in a manner that the whole of society can celebrate the improvements in quality of life that result from it. Let this opportunity not be squandered by short-sightedness, dogmatism and ignorance of the vast changes that the globe is going through; we need to work with both what is out there, and what we have, in order to bravely forge a new future for the generations to come. Let that be the guiding principle around which radical economic transformation is conceived of and put into practise, lest we end up doing more of the same and end up with nothing new.

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[1] See: http://fortune.com/2017/01/27/solar-wind-renewable-jobs/

Globalisation and Dislocation: The Marginal, Youthful Majorities of Urban Africa

Urban growth has exploded in African cities. While the national levels of urbanisation in Africa are relatively low in comparison to the rest of the world, city growth rates in Africa are the highest in the world. The vast majority of African cities are characterised by poverty, inequality and extensive slums and informal settlements which sprawl outward from the inner cities to the peripheries. These ‘peripheral’ low income and informal settlements, as well as inner city slums, host the marginalised majorities of African cities. On average, 62 per cent of Africans live in slums. According to the Global Urban Indicators Database[i], in East, Central and West Africa, urban slum populations can be well over 80 per cent. In Southern Africa it is generally lower - at around 20-30 per cent in the case of South African cities, but with the exception of the urban populations of both Angola and Mozambique which are constituted of around 80 per cent slums.

The rapid growth of African cities is by and large occurring in slums and informal settlements, as African cities are inadequately prepared for what this African wave of urbanisation has ‘landed’ upon its urban shores. It is a movement of gargantuan proportions; a tsunami of people who seek out urban life in order to escape conflict and natural disasters such as floods and drought,  as well as people seeking out opportunities for employment, trade, skills development and improved access to services. As deeply fraught with problems as African cities are, they offer disproportionately better levels of access to services than most rural municipalities are capable of. Moreover, the city hosts potentials that give hope to Africans. In the cities opportunities exist purely because of their high urban populations; a large market exists and these needs have to be met, whether it involves the provision of produce, goods or services. There is always a niche to fill in the city.

UN-Habitat’s “State of the World Cities Report 2010/11: The Urban Divide”, drew attention to the global prevalence of the ‘urban divide’ within cities; whether ethnic, religious, wealth and class driven, or otherwise, the fragmentation of urban society and increased potential for conflict and contestation – both overt and covert – results in the urban socio-political fabric. The vastly sprawled cities of Africa are fuelled by informal expansion of slums and informal settlements towards the peripheries; as they absorb the lion’s share of the growth of these cities.

The large majority of urban Africans are employed in the informal sector, and acquire land and housing through informal and customary arrangements, often settling on land that is uninhabitable; in low lying coastal, estuarine and wetland systems for example; which are vulnerable to flooding from riparian systems (examples of this can be found in Central Africa, where the vast majority of cities are located within the flood plains of the vast river systems such as the Congo River that dominate the regions geography). Moreover, low-lying coastal settlements are particularly vulnerable to storm surges, coastal erosion and sea-level rise. In West Africa, it has been estimated that up to 75 000 people may perish in a single storm surge event in densely populated coastal informal settlements. If one considers the effects of the recent ‘super-storm’ on New York – a city that has arguably one of the best disaster preparedness and response capabilities – the gravity of the vulnerability of these dislocated  and marginal urban settlements becomes apparent.

Yet these ‘forgotten zones’ have severe and entrenched social vulnerabilities, which although not as evident and direct as natural disasters, constitute a deeper malignance; a turbulence that ignored, is likely to grow and build amongst the populous youth of the continent, until it erupts into social disorder, or finds focus and becomes a driving force for change. There is nothing romantic about the conditions under which the peripherals and the marginal’s live. They are cut off from opportunities to grow and develop at the same pace as the urban elites and they do not participate in the world of the wealthy and globalised except as labourers and menial workers. The peripheral slums and informal settlements of African cities often host the most turbulent and potentially destructive elements of African urban society, as they exist largely outside of formal systems of urban management and governance, often developing their own systems of regulation and control. Consequently, they are referred to as “autonomous zones”; self governing zones that are constituted by customary, consensus and ad-hoc arrangements over self-governance. They can also be highly organised, and well-regulated, in cooperation with local authorities in the city, and can vary considerably in age of settlement (such as the oldest ‘musseques’ in Luanda).

Informality does not automatically mean disorder; informal systems largely ensure the day to day survival of African urban societies, and they must be credited in that sense. However, where the rules break down, the outcomes can be devastating. This is especially the case when urban youth disengage entirely from traditional and cultural identities, and develop complex multi-layered identities that assimilate trans-national identities – whether religious, as in the case of transnational Christianity and Islam, or as manifested in the clothing, music and values of youth gangs in Africa. All over Africa, youth gangs display a keenness for Western values and clothing, adopting old-school gangster hip-hop as a proxy ‘voice’ for their social condition and most often the music of rap artists such as Tupac Shakur;  whose articulation of the social condition of marginalised urban dwellers in the United States of America has found global appeal in ghettoes all over the world; from the USA to Latin America, Africa, Europe and Asia and the Far East. To youthful RUF rebels in Sierra Leone, Tupac’s influence took on cult-like proportions, who scrawled lyrics across their vehicles and donned Tupac paraphernalia before going into battle, and blaring his music during breaks in the fighting[ii].

This transnational adoption of artistic expression and cultural narratives is not new in Africa. African jazz of the 1950s was already appropriating and remaking American sub-culture, and especially into African urban contexts. A glance through drum magazine hints at this past in the South African ghettoes of Sophiatown; which was well known for both its nightlife and its American styled gangsters. What is new, however, is that while there is still an appropriation of Western sub-culture at work in the popular culture of African urban youth, there is also a significant dislocation unfolding; resulting from the breakdown of long-standing community, extended family and nuclear family structures that has accompanied the rapid growth of cities in Africa.

In a sense, there is a vacuum of values, and it is being filled with what the youth can grasp hold and make sense of in a rapidly changing global world, and a stagnant local condition. That is, they are making it up as they go along, and are not nearly as coordinated and organised, in a broader sense, to find appropriate representation within governance; either at municipal, city or national levels. They are cut off, and make up their own reality in the absence of any avenues for growth within the city. They cease to be participants in the city proper, and lapse into self-generated modes of survival and self-governance. Where conflict and war has ravaged African countries, they have often ravaged the youth with them. Child soldiers, in particular, are indoctrinated into destructive and anti-social modes of behaviour, often from a young age. Re-entering post conflict society is very difficult for them, whether as children or adults, and they are rendered fundamentally marginal as a result.

The malaise and decay of the marginal can take on particularly disturbing forms where the African ‘youth bulge’ proliferates. In Central Africa, around 40 per cent of the population are under the age of 15, while only about three per cent of the population are over the age of 65. With majority populations under the age of 35, and the proliferation of youth unemployment and lack of access to opportunities, youth are left with two choices; either to migrate, or to embed oneself within their dysfunctional socio-economic contexts and eke out a living from opportunities that are opened up through multi-layered networks of kinship, community, religious networks and so forth; in order to access opportunities in the informal sector. Partial employment, partial skills development and partial survival are the outcomes of existing within informal systems, where exploitation is rife, and where international criminal networks have taken hold in order to facilitate the trafficking of human beings, drugs, contraband and so forth. Curiously, the Somali extremist group “El-Shabaab” translates into “the boys”, indicating the youthful nature of this identity transition and generational break from previous generations and traditional (often ethnic) identities.

Urban development responses in Africa largely do not cater for the marginal ‘majorities’. They cater for the wealthy urban dwellers, who increasingly hive themselves off from the realities of their cities within gentrified enclaves that emulate the ‘world class cities’ to which their occupants aspire. However, that aspiration is not limited to the wealth. As De Boeck points out in “The Modern Titanic: Urban Planning and Everyday Life in Kinshasa” even the displaced and marginal poor aspire to the grand visions of urban life that are enjoyed in ‘world class’ cities in the developed world. The aspiration is to be ‘just like them’. 

Yet the transition towards this new urban African reality is fraught with fragmented and often dysfunctional movements within the process of urbanisation that is unfolding in African cities. The skewed and exclusive growth and development patterns that are unfolding within African cities are producing, on its fringes; a marginal majority that remains largely ignored and un-included in the ‘great period of African economic growth’ that is unfolding in spite of the financial crisis. Perhaps, their centrality will ultimately come to the centre of life in urban Africa, one way or another, and broader social change will come about, but until then, the majority remain behind a looking glass, for the privileged to peer at and consider for a while, until its discomfort, it’s jilting, forces it back out of view, and into invisibility, scattered on the peripheries.

***Note: This piece was originally written in December 2012, was lost and consequently recovered. Nonetheless it remains a relevant perspective.

   

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[i] Global Urban Indicators (GUI) (2009). Global Urban Indicators – Selected Statistics: Monitoring the Habitat Agenda and the Millennium Development Goals, Global Urban Observatory, November 2009.

[ii] Source: Sommers, M. (2003). “Urbanization, War and Africa’s Youth at Risk. Towards Understanding and Addressing Future Challenges”, Basic Education and Policy Support (BEPS), United States Agency for International Development.