Africa Rising: when will the West join Africa? – By Eliot Pence & Bright Simons
Discussions about Africa’s evolution tend to measure the continent’s “˜gradual’ assimilation into the global mainstream. This may have been understandable in the mid-1980s when by every indicator African economies were seen as hopelessly distorted and needed to be salvaged with what became known as “˜structural adjustment’. But African countries today appear more aligned with the Washington Consensus and Globalization’s “˜best practices’ than the West. On many of the macroeconomic indicators used to judge conformity with the mainstream – debt to GDP ratio, current account balance, fiscal balance, inflation – Africa is situated closer to the mainstream, while key OECD countries drift away. Data tracking other kinds of flows – in cultural, innovation, and labour flows – point to a continent becoming a key player in the Global South – not just assimilating into the global mainstream, but helping to shape it.
- Population flows – Stories of African migrants struggling to find a route to Europe contrast with recent reports that Europeans are struggling to find working permits in Africa. According to NYU’s Development Research Institute, between 2006 and 2009 the number of visas issued for Portuguese entering Angola increased from 156 to 23,000. In 2012, there were nearly 100,000 Portuguese living in Angola, more than triple the number of Angolans living in Portugal. Spaniards, too, have fled high unemployment looking for work in Algeria, where many Spanish companies have relocated. No longer seeing the US as their best opportunity for professional development, waves of Nigerian-Americans (the most educated Diaspora group in the country), vie for top spots in the new Lagos offices of JPMorgan, McKinsey and Blackrock.
- Innovation and information flows – Reverse innovation, a concept describing inventions that are adopted first in the developing world, is creeping into western corporate board rooms (and publishing houses). Plans to develop a ‘Silicon Savannah‘ in East Africa build on widely successful innovations emerging out of the banking and telecom sectors and now being rolled out in US and European markets. Images of Joseph Conrad’s Dark Continent are receding as the broadband industry turns to Africa for global growth and sustained demand. African policy innovations, too, offer lessons to Europe’s troubled economic union. A recent review of the health of the West African Economic Union by the IMF suggested Europe might learn something from how Africa’s economic unions have faired.
- Financial flows – Though largely still the recipient of foreign direct investment, Africa is gobbling up distressed assets in the West. Gatwick, the United Kingdom’s second largest airport, was recently purchased by a Nigerian and Africa’s richest woman, Isabel dos Santos (daughter of Angolan President Jose Eduardo dos Santos), is the new majority shareholder in Portugal’s leading pay-TV and Internet provider Zon Multimedia. More traditional financial flows, such as remittances from Africans working abroad, are also changing. Already larger than official development assistance by a substantial margin, reports suggest remittances are now flowing to Europe from Africa. Underscoring these trends is reduced dependency on multilaterals (China alone lends more to Africa than the World Bank) and research by Standard Bank estimates that BRIC-Africa trade increased from $20bn to more than $250bn in the past 10 years.
- Cultural flows – A Financial Times editorial recently warned that the West would lose out on Africa’s “˜wave of creativity’ if it doesn’t reorient itself. To be sure, Africa’s cultural place in the larger world has always been evident, even if its recent recognition suggests it hasn’t. Nollywood, Nigeria’s answer to Hollywood, is a half billion dollar a year business and, according to UNESCO, puts out twice as many movies as Hollywood. Its growth also belies assumptions about the importance of intellectual property rights “” something it largely exists without “” in development. The continent’s cinematic creativity is paralleled by the emergence of its fashion industry, which is increasing in vogue “” literally; an entire issue of the magazine was devoted to the continent recently. African-inspired cuisine also stands at the cusp. The “African Food Inevitability Thesis,” a phrase coined by a recent Wall St. Journal article, called Africa the foodies’ frontier and predicted a thriving commercial future for continental cuisine.
Even as a major western newspaper openly wonders how Africa will “˜join the larger world on its own terms,’ across virtually all indicators, evidence suggests it’s doing so largely on its own terms. If the West is stuck in low-growth and political paralysis, while Africa enjoys an economic renaissance, a more pressing question for Western observers might be: When will the West join Africa?
Eliot Pence is a director at the Whitaker Group, a corporate strategy firm focused on sub-Saharan Africa. Bright Simons is the founder of the mPedigree Network (www.mPedigree.Net), and a Senior Fellow at think tank, IMANI.
Profound! Things have changed around while the world slept. Who has unsustainable now? Jubilee 2000 hello? Amazing….more of such, AA!
*Who has unsustainable debt now
Nicely put. Africa’s resurgence is inspiring – and, critically, taking place on its own terms. Though it remains a challenge that much of the new prosperity being generated is unequally distributed. I think we need to start measuring economic and social progress in tandem. Meanwhile, to truly unleash the creativity outlined so well above, we need to find new and innovative ways to finance and empower Africa’s youth.
The next few decades will be quite interesting to observe as far as Africa is concerned and it’s position in world affairs particularly economically
Yes, Africa has arrived. No more a sleeping giant!
This issue will only get sharper in the next decade as Africa reaps its demographic dividend and can, hopefully, provide dignified and decent-paid work for a growing number of its 500M+ young people. An Africa that can fully tap into its talent as well as its natural resources will be something to behold.
This really is quite appalling.
Get the director of a European firm that helps foreigners invest in African commodity extraction and the founder of a group trying to enforce western pharmaceutical company patents in Africa to write a piece that equates investments in African resources with the implementation of World Bank and IMF neo-liberal economics.
Then use this as a stick to beat Europeans suffering through austerity driven, unregulated banking practice triggered crises.
If only France now would implement the 1980s Structural Adjustment Policies that worked so well in Cote d’Ivoire, then they’d have more successful trade relations with China. Cause god knows, China got where it is now by listening to World Bank economists.
Oh wait, that’s all wrong.
I welcome good news about Africa’s rise, but wonder which Africa we are talking about. Of the 55 countries, it seems optimistic investors consistently talk about a small handful, mostly in East and Southern Africa, plus Nigeria.
We have the BRICs, the PIGS, is it not time to have some groupings in Africa that distinguish between those who are ‘rising’ to others not doing so well?
[…] Eliot Pence and Bright Simons: On many of the macroeconomic indicators used to judge conformity with the mainstream â€“ debt to GDP ratio, current account balance, fiscal balance, inflation â€“ Africa is situated closer to the mainstream, while key OECD countries drift away. Data tracking other kinds of flows â€“ in cultural, innovation, and labour flows â€“ point to a continent becoming a key player in the Global South â€“ not just assimilating into the global mainstream, but helping to shape it. […]
[…] and 2009 the number of visas issued for Portuguese entering Angola increased from 156 to 23,000. In 2012, there were nearly 100,000 Portuguese living in Angola, more than triple the number of Angolans living in Portugal. Spaniards, too, have fled high […]
A site like AA does well to host though-provoking posts: after all, it is hard to generate an argument through sober, balanced analysis, or to give one’s argument momentum while still accounting for the many caveats that are typically required when discussing contemporary Africa.
While it evinces some research and an optimism that has some appeal, to my mind this piece has a number of significant conceptual and other problems. I’ll just mention two: the authors appear to find nothing worth remarking upon in terms of the origins of the family capital used for buying certain European assets; nor do they find it interesting that so many in Africa who find themselves with capital are spending a great deal of time trying to find off-shore places to put it: Paris, London, etc. If such persons believe that Africa is a haven of investor stability, would they not be re-investing there? Someone should write a blog on how such persons tend, as before, to vote with their feet when it comes to the crunch. That is not to be Afro-pessimistic, just a call for inputs that are less about advocacy and more about analysis.
Note from the editor:
Thanks for comments. Just a quick note, African Arguments is a blog site which encourages ‘argument’ – hence the name. We don’t necessarily agree/endorse all the views we publish, but rather are seeking to provide a place where people can put forward such views in an open forum. Whilst some pieces are more obviously analytical, this piece is quite clearly opinion. We may seek to categorise this distinction more clearly in future.
A note on the above piece:
We didn’t ask the authors to write this piece, we were asked by the authors to publish it. We felt it represented a particular strand of thought prevalent in the Africa-business community at present, and consequently warranted publication.
Post-script: the editor is quite right (and has editor’s prerogative in any event!), and my comment was indeed intended to join issue with the piece and so generate / sustain argument. The site is devoted to argument, not analysis — but the authors’ argument begs for analysis on any number of fronts.
One more example, please editor? The authors are disingenuous in suggesting that the purchase of (non-distressed) Gatwick airport by a US-based fund which happens to be headed by an expat Nigerian represents Africa buying up distressed Western assets … all readers will no doubt welcome an argument, even if its just about facts.
Jo, Thanks for your comments. Youâ€™ve raised important issues. Let me try to address some of them.
We do not comment on the origins of Isabel dos Santosâ€™ wealth because it seems obvious and because the focus of the piece is not on evaluating the legitimacy of her wealth. The focus of the piece was to explore how Africa, and Africans, are influencing the global mainstream â€” be that through ownership or (in the case of the Nigerian) management of assets. The extent to which that is being done in Ms. dos Santosâ€™ case, via ownership of a western media asset, we thought worth mentioning.
We do not state in the piece, nor do we believe, that Africa is a haven of investor stability.
To your point that Africans spend a great deal of time finding things to invest in outside of Africa, I would direct you to a recent E&Y report which complicates that analysis: intra-African investment on the continent increased by an average of 23% every year between 2003 and 2011; since 2007 this rate has accelerated to an average of 42% a year. Three of the top five investing countries in Africa over the past five years have been African (Kenya, Nigeria and South Africa).
The West will only join Africa when it comes out of the riding on Africa approach.Even if you want to,do it with dignity please.We are tired!
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This is music after doom from Africa for the past 50 years.Good
journalism. Thank you for telling it as it is, Pence and Eliot.
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