Not a flash in the pan

The plight of sub-Saharan Africa has been used sometimes correctly to underscore the need for global assistance, particularly in the struggle to contain pandemic diseases, but oftentimes less than correctly to pillory the ongoing integration of the economies of the world ? a process better know as globalisation. Even today, it is not uncommon for opponents of modern-day capitalism, a.k.a. globalisation, to lament how maybe China has gained, maybe India too (or at least the few Indians who watch the TV programmes on which the anguished opponents of ?heartless? globalisation appear), but that has not been the case with Africa where dirt-poor cotton farmers are being crushed into the ground by farm subsidies in western economies. Many reformers have been put on the defensive on Africa, and have tried to trace reasons for why the benefits of trade and investment elude the continent?s countries to sub-Saharan Africa?s pandemic diseases, widespread civil and military conflicts, or this shadowy thing called ?governance?.

The facts, however, are quite otherwise. The economic boom that lit up in the closing decades of the last century is truly worldwide in its reach. It is of course still possible to miss the opportunity, but you have to try very hard. All the countries of Africa showed the same rather depressing pattern till 2000. No growth, or inconsistent and weak growth. However, everything changed after the turn of the century.

For the continent, GDP is estimated to have grown by 5.2% in 2006, little below the 5.8% of 2005. In 2007, the forecast growth is higher still at 6.3%. In the two decades up to 2000, however, no matter how you sliced and diced the period, average economic growth for the continent as a whole ranged between 2.2 and 2.4%. Up to 2000, most African countries had experienced little of the economic resurgence that had swept through East, South East and South Asia over two decades.

The consequences of what was seen as an exclusion of the continent from the economic high table, compounded by an enormous burden of poverty and pandemic diseases, played a role in the theatres of politics, media and social activism. The few success stories of the 1980s, such as Cameroon, faced reversal in the next decade, and the only success seemed to be at the southern tip: South Africa, Botswana and Swaziland. There were some visible improvement in the 1990s in Ghana, Nigeria and Uganda, and in a few small economies were oil had been found – Equatorial Guinea and Cape Verde – but it was too limited to be viewed as anything other than exceptions to the rule.

Yet, during the period 2000-2006, very little of the great continent has been left untouched by growth. The Maghreb in the north, the Francophone nations to the west, southern Africa, the nations on the eastern coast and those in the heart of Africa such as Congo and Zambia, are all doing well. Only Zimbabwe and the Central African Republic are lagging behind. The rising tide of globalisation and world demand for oil, metal-bearing ores, lumber and other primary commodities, have brought about a prosperity that decades of aid had not.

Some examples will help fill the picture in. New oil discoveries have catapulted Angola to spectacular growth in excess of 20%. But economies such as Mozambique that have not been so blessed, has seen growth move up from an average of 3% in the 1990s to 7-8% in the current decade. Kenya, which managed 3% growth in the 1990s, is in the 5-6% range today. Ethiopia has moved from a sub-3% level to over 8% in 2005 and a medium-term average of 5-6%. Uganda, Zambia and Congo have all moved up from 4% and less, rates to rates of over 6% today.

Western African nations have seen economic improvement, in some cases spectacular – such as in Equatorial Guinea, Chad and Mauritania – and in all cases fairly convincing. Almost every economy in sub-Saharan Africa today finds itself elevated to a growth path close to 5%, if not significantly higher.

The remarkable pick-up in economic growth in sub-Saharan Africa is forecast to continue into 2007 and is viewed as a process that will ride the global boom in the near- to medium-term. For the constituent countries of Africa that are set on this resurgent path of economic expansion, the data on investment, incomes, savings and so on that throw light on the structural economic indicators are not readily available. However, from what data is available, it is clear that structural economic indicators have also improved significantly.

The question that commonly arises is whether this is a passing phase reflecting the boom in commodity prices. The extensive nature of this boom, its persistent character and longevity (and the demand for primary commodities that it implies), improvement in structural economic indicators and the willingness of foreign investors to pour treasure, technology, and organisation into Africa, all suggest that this time it is not a flash in the pan.

China has been a big player in all of this, both as a source of the demand and also as an investor. The order of the political engagement that China has embarked upon in Africa was highlighted by the summit of nearly 50 leaders from the continent in Beijing organised in November 2006, putting on notice all other players who might have real or imagined economic and other interests in Africa.

?Saumitra Chaudhuri is economic advisor, Icra