Why Africa is Rising at the Slowest Possible Pace

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Africa is rising. Many Economists, Market Analysts, Governments and International Banks agree that on many levels, the continent is better off today than it was 50 years ago. However, the pace at which Africa is shifting away from widespread poverty is too slow.

Some may argue that you shouldn’t rush perfection. But the truth of the matter is, Africa’s people are not looking for perfection. They are looking for progress and they will take it whenever they can find it.

Africa is indeed rising but the growth is slow in some countries and rapid in others.

The World Bank, a global lender with vested interests in Africa and developing nations across the globe, estimates that the share of Africans who are poor fell from 56% in 1990 to 43% in 2012.

A 2016 report from the Bank argues that Africa’s poverty rate may have declined even more if the quality and comparability of the underlying data are taken into consideration. However, because of population growth, many more people are poor.

“The most optimistic scenario shows about 330 million poor in 2012, up from about 280 million in 1990,” the lender explained.

The Bank describes poverty as the lack or insufficiency of money to meet basic needs, including food, clothing and shelter.

“However, poverty is much more than the mere lack of money. It is also about deprivation in other important areas of wellbeing such as education, health, water, and housing,” the Bank explained.

In 2012, 501 million people, or 47% of the population of sub-Saharan Africa, lived on $1.90 a day or less. As of April 2018, that number had fallen to 401 million people, based on a global poverty update from the World Bank. Strangely enough, the number was lower during the same period in 2017 (390 million people), implying that the rate of poverty reduction is in flux.

So why say Africa rising when millions still live in abject poverty? Why is the pace of socio-economic development so slow?

Neocolonialism

Neocolonialism is possibly one of the biggest hurdles, slowing down the continent’s development. It is the practice of using capitalism, globalization and cultural imperialism to influence a developing country. The term was coined by Ghanaian revolutionary, Kwame Nkrumah in the context of African countries undergoing decolonization in the 1960s.

Neocolonialism can also be described as the continuation of the economic model of colonialism after a colonized territory has achieved formal political independence.

“Colonization distorted and retarded the pace and tempo of cultural growth and the trend of civilisation in Africa,” says Tony Stone a leading Development Economist and Policy Analyst.

While Africa a continent of more than 50 separate countries, has a lot of problems, there are in fact thriving cities, modern societies, rapid development, new and revolutionary technologies in many of its clusters.

Yes, poverty, and corruption are major problems across parts of the continent but these are systemic problems. Colonization did a lot of damage that many sometimes seem to disregard.

Corruption

Many of Africa’s governments are notorious for their greed and disregard for human suffering. It is not surprising that economic development has been slow in a country like Zimbabwe where the nation’s last President was dethroned after an estimated 30 years in power. He left the country’s economy in shambles having lived extravagantly at the expense of his people.

Other countries may not be as hard hit as Zimbabwe but they have suffered nonetheless. Kenya is struggling to recover from decades of corruption as new and existing leaders continue to misappropriate the people’s hard-earned taxes. The country’s President, Uhuru Kenyatta has been on a campaign to weed out thieves in government. However, with less than four years left in his last term, it is imperative that he institutes iron-clad anti-corruption policies if his campaign against graft is expected to last.

The same can be said of all African leaders looking to speed up development in their respective countries.

Poor Economic Policies

Many African governments make their citizens victims of their ill-conceived machinations. Poor economic policies are to blame for countless financial crises currently hammering the continent to dust. From increased taxes on the poor to exemptions on the wealthy, Africa is a smorgasbord of contradictions when it comes to policy.

Other policies may include investing in education while neglecting infrastructure development. After all, what good is a school if the children attending it have to walk 20 kilometers to get there through rocky pathways and dense bush-ridden forests?

Kenya’s government, for instance, recently increased Value Added Tax on fuel by as much as 16% before the country’s President moved to cut it to 8%. The directive has been met with resistance since a lot of the tax collected by the government hardly goes to good use. An increase in taxes only works if the money is spent to the benefit of the people.

Possible solutions

The first step to solving any problem is admitting that a problem exists in the first place. Africa is known primarily for its poverty and rampant corruption.

The second step in solving any problem is addressing its underlying causes. In this regard, Africa suffers from poverty and corruption because of its mismanaged resources, combined with a culture of greed and selfishness.

In light of these ‘revelations’ some States have seen fit to tackle the problem head on.

Rwanda has made headlines in recent months as the country’s President, Paul Kagame cracks down on corruption.

Uganda, the tiny nation’s immediate neighbor, has made headlines in recent months for different reasons. Uganda’s heavily-criticized Head of State, Yoweri Museveni has seen the country through various levels of development but his government’s efforts are not as effective as they could be. Following a number of economic squabbles with Kenya, delayed development projects and slow responses to the country’s immediate needs, Museveni’s government cannot be described as a shining example of good leadership.

Nevertheless, according to a new poverty assessment conducted by the renowned lender, the number of people in extreme poverty in Uganda (those living on less than $1.90 a day) has fallen from 53.2% in 2006, to 34.6% in 2013.

The report, titled the ‘Uganda Poverty Assessment 2016: Fact Sheet’, states that this reduction of 2.7% per year is higher than the regional average of 0.74 over the course of the same period, making it one of the fastest percentage point reductions in extreme poverty in Sub-Saharan Africa and the developing world.

Much of Uganda’s progress has been due to agricultural income growth, peace and stability, education, urbanization, as well as sustained economic growth averaging 7% annually. The World Bank found that poverty reduction among households working in agriculture accounts for 79% of the national poverty reduction observed between 2006 and 2013

Ethiopia, on the other hand, is making moves to become the last development frontier.

According to Africa-based Market Analyst, John Aglionby, the country’s government is building low-cost manufacturing hubs but must also deal with social and political challenges. Regardless of these efforts, Ethiopia is still considered a ‘developing economy’.

Such rankings are categorized into four levels, which include a developing market, an emerging market, a frontier market and a developed market.

A frontier market is a type of developing country which is more developed than the least developing countries, but too small to be generally considered an emerging market.

An emerging market is a country that has some characteristics of a developed market but does not satisfy standards to be termed a developed market.

A developed market is a country that is most developed in terms of its economy and capital markets. The country must be high income, but this also includes openness to foreign ownership, ease of capital movement, and efficiency of market institutions.

Sweden, for instance, is described as a developed market. The Scandinavian nation is considered to be one of the most highly developed post-industrial societies in the world. According to the IMF, Sweden has a gross domestic product (GDP) per capita of $46,420 as of 2016. It is ranked number 17 in the world in terms of GDP per capita.

While Ethiopia is inching towards becoming an emerging market, the country’s progress is not as fast as some would have the rest of the world believe. The country’s GDP per capita is $706.76, or 1.5% of Sweden’s GDP per capita.

Regardless of this dismal numbers, Ethiopia is slowly moving forward.

“Helped by significant foreign investment, mostly from China, which has poured resources into dams, roads and railways, Ethiopia has produced a China-style boom,” explained Aglionby in a previous report. He noted that for 10 years from 2005, Ethiopia’s annual economic growth has averaged 10%.

The East African nation, which happens to be the continent’s second-most populous country has overtaken Kenya to become the largest economy in east Africa, according to International Monetary Fund data.

However, its infrastructure is still lacking. While its roads and railways are ever-expanding, it has yet to reach the same level of critical acclaim as Kenya, Nigeria, and South Africa. And while these three powerhouses are better of (on some levels) than Ethiopia, they, are also lacking in others. All three suffer from rampant corruption, a plague on development that has haunted the entire African continent for decades.

And while many other African nations have similar problems, others have found a way to navigate these dark waters.

It’s no wonder that the top three richest counties in Africa are known for their attraction towards foreign and domestic investment. They include Seychelles with GDP $1.438 billion, Nigeria with a GDP of $594.257 billion, and South Africa with a GDP of $312.798 billion.

With regard to these statistics, it is evident that innovation is possibly one of the best possible solutions to Africa’s problems

“African countries need to make technology and innovation a strategic priority from the standpoint of a world-view that Africa can invent and innovate and must do so in order to liberate itself from the oppressive dominance of globalization,” says Kingsley Moghalu is deputy governor of the Central Bank of Nigeria and author of Emerging Africa.

Policies alone will not shift the paradigm. Creativity will therefore have to play a major role as well as innovators seek African solutions for African problems. It can be done. Some people just need a slight push in the right direction.

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