While the rise of the BRICs and the crisis in the West provided the main narrative of the first decade of the century, Africa’s continued economic boom could become the dominant phenomenon of the second. Strengthening ties with the continent should thus remain a key element of Brazil’s foreign policy.
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Africa has traditionally been associated with large-scale human suffering. Yet the last decade has seen unprecedented growth, turning the continent into one of the world’s last attractive economic frontiers. During the past ten years, six of the world’s 10 fastest growing economies were in Africa. Real income has increased by 30% during that period. No global company today can afford not to be present in Africa’s markets. Foreign direct investment has gone from $15 billion in 2002 to $37 billion in 2006 and $46 billion in 2012.
Some impressive data makes this clear. Today, almost 70% of Africans own a cellphone or smartphone (650 million). There are thus more mobile-phone users in Africa than in North America. Africa possesses 40% of the world’s raw materials and 60% of its uncultivated arable land. No other continent has developed as rapidly in the last decade as Africa, where real economic growth was between 5% and 10% per year. When the Cold War ended, just three out of 53 African nations had halfway functional democracies. Today, that figure is 25 out of 54. 60 million Africans have an income of $3,000 a year, and 100 million will in 2015. More than 300 million Africans are now part of the middle class, roughly the population of the United States. Demography is favorable, too: With fertility rates decreasing in Asia and Latin America, 50% of the increase in the world’s population over the next 40 years will be in Africa. Within 30 years, the continent’s working-age population will be larger than one billion people, providing businesses with a larger labor pool than even China or India. Whereas currently not even half of Africa’s countries are what the World Bank calls “middle income” (defined as at least $1,000 per person a year), by 2025 the bank expects most African countries to have reached that stage. While the rise of the BRICs and the crisis in the West provided the main narrative of the first decade of the century, Africa’s rise could become the key phenomenon of the second.
Take Nigeria. This year, it will overtake South Africa and turn into Africa’s largest economy. Over the past decade, the country has grown at 7% a year, and growth in 2013 is expected to be 6.8% at least – far higher than South Africa’s meagre 2.5%. In addition, Nigeria’s currency is relatively stable, and inflation fell to a new low last month. Despite problems with theft and corruption in the oil sector, Nigeria was able to grow so fast this year largely due to a strong performance in the agriculture, hotels, construction and telecoms sectors. Finally, Nigeria’s debt-to-GDP ratio is very low, at around 20 per cent, particularly compared to many Western countries. This is partly attributed to Nigeria’s respected Finance minister Ngozi Okonjo-Iweala, whose candidacy as World Bank director received ample support in the Global South in 2012.
Of course, complex challenges remain. Around a fourth of Africa’s nations are still plagued by political instability or armed conflict, severely undermining growth prospects. Infrastructure across the continent remains abysmal, making African products too expensive to compete globally. Government failure, mismanagement, and corruption remain problematic. Unless governments invest more in infrastructure and education, and unless they approve economic reforms that create a more transparent investment legislation, recent success might be just another unsustainable boom fueled primarily by high raw-material prices, improving life for only a thin layer of the upper class. If these problems can be addressed Africa could break into the global market for light manufacturing and services such as call centers. There are many hopeful signs. For example, secondary-school enrolment grew by 48% between 2000 and 2008 after many states expanded their education programs.
While many have commented on Africa’s economic rise, very little has been said about the global political implications. Africa remains vastly underrepresented in international institutions such as the World Bank and the International Monetary Fund (IMF). The latest IMF quota reform included better representation for all emerging powers except South Africa, whose share is actually set to decline. Africa only fields one G20 member. South Africa is also a BRICS member. Paradoxically, the continent’s foremost diplomatic power is one of its least dynamic, raising questions about its continued capacity to represent the African continent. The large number of territorially relatively small countries on the continent (compared to Brazil, India or China) complicates efforts to rally around one large actor that could be included in UN Security Council reform proposals, such as the G4.
And yet, any debate about reforming global governance should increasingly include considerations about how to assure that emerging Africa is adequately represented in international institutions.
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Photo credit: AP
