We hear contradictory discourses about Africa: one is optimistic and announces the emergence of a continent where anything is possible; the other, often made by people in the field, is more doubtful about this development. Where do you put the cursor?
Everyone is right to some extent. The real and unquestionable fact is that African growth rates have been significantly higher since the early 2000s. They have been driven by structural phenomena, some of which are macroeconomic, such as debt reduction and the recovery of public finances, but more fundamentally by very deep-rooted dynamics, in terms of demography, with the gradual onset of a demographic dividend, but also in terms of urbanization and the densification of territories. This has all contributed to the emergence of an African middle class, which transforms the economic and social situation of the continent.
However, it must be recognized that this growth does not sufficiently benefit the vast majority of Africans. This can be seen with the widening inequalities, and the far too slow improvement in social indicators and infrastructures, which remain too few in number and fragile. In addition, the continent still has a number of failed States, such as DRC, the Great Lakes region, the Horn of Africa and the Central African Republic… and which are unfortunately home to a significant proportion of the African population. But all these very real weaknesses cannot mask an economic and social reality that is very different from in the 1980s and 1990s.
The question now is this: “What is going to happen over the next twenty and thirty years?”. This raises assumptions over the diversification of African growth patterns which forge a landscape that is increasingly contrasting, increasingly diverse in terms of what we see happening in the field. At least three economic models can be seen on the continent. The first is the historical model of countries whose growth is related to mineral or oil exports, such as Niger or Angola. These countries experienced an upturn in the 2000s and 2010s, before suffering from the impact of the decline in prices. This year, their performance is recovering due to the increase in oil prices.
The second model comprises countries whose domestic market is the cornerstone of growth. This group includes most of the landlocked countries and a few coastal countries that are experiencing a significant development of entrepreneurship and almost continuous growth rates of 6 to 7%, which have shown no signs of slowing down since the mid-2000s. However, these countries are today the focus of attention for those who believe that the pace of public debt is moving too quickly or that birth rates are too high for this growth to be disseminated and benefit all. This is in particular the case with Sahelian countries.
Finally, a new intriguing model has emerged over the past five to ten years. It concerns countries which could be said to be part of the area of Chinese co-prosperity, countries in the Belt and Road zone, which are countries where Chinese manufacturing activities are relocated. We do not know at what pace these countries will continue on their growth path. If they continue down this route, in a sustainable manner, which will depend on both their domestic policy and the Chinese policy, they could experience a development similar to Southeast Asia. Ethiopia epitomizes all these countries which everyone is talking about.
What are the consequences of China’s presence in Africa?
China has greatly developed its position over the past three decades. It first became a massive buyer of African commodities to meet the needs of its domestic market. It is also this expansion which drove the expansion of certain African oil and mining countries. China subsequently became a seller of consumer goods for Africa, then of equipment. Today, without the Chinese machine tool, no industrialization would be possible in the African manufacturing and agro-industrial sector. China, now an investor, in the sense of being a relocator and provider of capital, has become one of the main funders of African development and one of its main debt holders. This means a new role and a new responsibility for China, which is a source of tension with the other donors. In short, China’s presence in Africa is multifaceted, some aspects are entirely positive, others are questionable and others clearly pose more of a problem. While the continent was completely debt-free, the Chinese are repeating what the Europeans and Americans did in the 1970s, which caused Africa’s over-indebtedness.
Can Africa sustainably draw on Asian development models?
It is not easy to replicate the Asian model, or at any rate the Chinese model, in Africa for objective reasons: there is much less production to relocate from Europe and the USA to Africa as the Chinese have already “taken everything”. The potential for relocation is today to be found between China and Africa, but the phenomenon of robotization steps in here, and China’s move towards a technological upgrading rather than a production based on cheap labor costs. Furthermore, the sociopolitical dimension of the Asian development model consists of a strong regime, which may in some respects be questionable, but is otherwise extremely efficient in the implementation of infrastructure and an appropriate business environment. Very few African countries are in a position to create these sociopolitical conditions today, in particular in terms of the quality of the state apparatus.
In the book Entreprenante Afrique (Enterprising Africa), you mention abundant entrepreneurial dynamism on the continent. What drives this dynamism? Do African startuppers have things to teach Westerners?
Africans have a lot of things to say to startuppers all over the world. Their specific virtues are shaped by a context that is not found anywhere else. African entrepreneurs benefit from a vast scope of creative opportunities, as everything is lacking and everything needs to be invented. But they face an unparalleled amount of material and administrative difficulties in accomplishing their projects. Their success requires rare qualities of resilience, imagination and strength of character in the way they go about it.
This entrepreneurship is firstly promoted by the creation of a market. Twenty or thirty years ago, there was no market and therefore very few opportunities of entrepreneurship. Demand has been creating its supply for a few years now. The emergence of an African middle class in particular contributes significantly to generating entrepreneurial projects. And the projects themselves fuel the growth in this middle class. The rise in the level of qualifications also plays a major role. This is one of the common features of these entrepreneurs, who are often engineers and technicians and graduated from major international schools or from their own education system. The third factor is the opening up of a macroeconomic space. In a socializing economy, everything used to be forbidden. Access to credit remains difficult and there is still massive corruption, but entrepreneurial freedom is recognized everywhere.
Given the unprecedented challenges facing Africa, are we not today in an intellectual impasse to define what would be “right” for its development?
Africa’s development pattern is changing so much that we no longer know what to say to Africans, insofar as our historical experience of development and the lessons on which we have built our own patterns do not correspond to the current historical situation of the continent. There is a form of impasse in economic policy advice and the need, for both African governments and private actors, to build their own path.
However, there are still sectors, such as technologies or knowledge, where transfers of know-how, adapted and geared towards what Africans really need, are still possible. But here again, we come up against limits, because as Africa has itself become a land of innovation, African development is no longer about exclusively being a consumer of transfers. Today, we even see situations of retro-innovation, with innovations going from the Mediterranean in the other direction. We have seen it in the financial sector, with experiences of mobile payments, and we will be seeing it in the energy sector, where the development of decentralized solutions, which are for the time being adapted to African contexts, will be increasingly replicated in our countries. In the field, Africa is more in a position to teach us a number of lessons! We need to adapt to this. Capital is what we can still provide: the continent has a massive need for investors.
With 4 billion inhabitants and African GDP higher than European GDP by the end of the 21st century, Africa is going to become a core issue for the balance of the planet. What role can development policies play in this respect?
This process of demographic and economic growth provides a range of both risks and opportunities. There are, of course, migratory risks, but also security and political risks, which are likely to fuel major crises. Nigeria may have 800 million inhabitants by the end of the century. One day, African countries will be nuclear powers. But this African growth also provides an opportunity for expansion for Europe’s entire productive fabric, in particular for the French economy. Africa has experienced continuous growth in imports, from 14 to 20% since the start of the century, and it will continue to increase. This is also an opportunity for a country like France, which has substantial savings, to go and seek its profitability on a rapidly expanding continent. Furthermore, the development of a group of 500 million French-speaking people is also a factor for cultural and linguistic renewal. Cultural industries need to invest in Africa.
The keyword for development policies is from now on to move from a situation of aid donor to a situation of partner, in a win-win relationship, aiming at a convergence of interests. This is the only reasonable basis for the construction of an uninhibited relationship. Donors need to stop using aid language and start using investor language. They also need to find their position in a system which is much more global, with a whole host of actors. I believe that there is also a need to reinject research, know-how and knowledge, at a time where we have lost our capacity to consider the relationship with this continent. However, there is still some way to go to make this vision a reality because Africa is heterogeneous, because our system is gradually adapting, and because the past weighs heavily on both sides.
You have said that African democracy is ailing due to the lack of taxation and you call on Africans to introduce taxation. How can this be implemented?
The capacity of Africans to raise external resources to finance their development depends on their capacity to increase their level of taxation. This taxation is the basis of our democracies. But the subject is complex, as African GDP is largely generated by the non-monetized informal sector. This problem cannot be resolved without showing creativity in taxation, by coming up with simple forms of taxes, spread out, shared by everyone and easily managed. This new taxation will not happen overnight.
You have been travelling around Africa for over 60 years, driven by an apparently unshakeable conviction and optimism. What nurtures this mindset?
I try to view Africa as clear-sightedly as possible, understand both its potential and its problems. I was born and grew up in Africa. Apart from a few moments of unfaithfulness when I worked at the World Bank where I handled Asian issues, my destiny is linked to this continent. While, in conducting public policies, there are always questions over the modalities, it is the first time, in my current activities at Investisseurs & Partenaires, that I have no doubt over the sense and modalities of our action, despite the fact that errors are always possible. We are at the “center”, with African entrepreneurs who are building their domestic market. We do this in the context of a Franco-African partnership, both in our team and in the ecosystem of investors.
With 2 billion inhabitants by 2050 and 3 to 4 billion by the end of the century, Africa will have a domestic market without historical parallel. No continent has ever experienced population growth on such a scale. When you ask an African entrepreneur what his priority is, the first thing he answers you is his domestic market, his city, his region.
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