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Why is Africa falling behind?
Africa’s economy is in trouble. The numbers don’t look good. Despite almost two decades of world-leading growth rates, developing countries – most of which are in Africa – aren’t catching up with their developed peers.
If anything, they are falling behind. The continent’s GDP per capita is growing too slowly to keep up with the developed world, leave alone to meaningfully raise the prosperity of its people in the foreseeable future. And that’s without even taking inequality within the countries themselves into account.
As Jostein Hauge, an assistant professor at the University of Cambridge, put it in a post on X in July, “we are witnessing divergence between the South and North rather than convergence.” His post was accompanied with a graph depicting the widening gap between the two broad regions; Sub-Saharan Africa was dead last.
Just your regular reminder that the Global South is NOT catching up with the Global North in terms of GDP/income.
— Jostein Hauge (@haugejostein) July 26, 2024
In fact, with the exception of China, we are witnessing divergence between the South and North rather than convergence. pic.twitter.com/OBbeGe8uX9
Policy failures
There are many ways to put lipstick on this pig. After all, developing countries’ share of the global economy has risen significantly over the last few decades (in large part due to China’s expansion); GDP figures adjusted for purchasing power parity (PPP) paint a rosier picture; and African countries still have the fastest growth rates.
Ultimately, however, there is no way to hide the fact that Africa has been, still is, and will remain, for the lifetime of most living Africans, the poorest part of the world. The chickens are coming home to roost. The optimism of the late 2000s and early 2010s, when it seemed as if the continent’s fast-growing economies were finally on a path to catching up with the rest of the world, is giving way to a realistic pessimism.
And it’s not just Prof Hauge who has noticed this dismal trend. In September, The Economist ran a special report highlighting the fact that economic growth in poor countries has been largely stagnant since 2015, mainly on account of failures of governance and, most damagingly, restrictive economic policies.
Earlier, in April, a report from the World Bank stated that the “75 poorest and most vulnerable economies”, which include nearly every African country, are “in the midst of a historic economic reversal even as the near-term outlook brightens elsewhere.” In its own report the same month, the IMF said exactly the same thing.
And then, this month, as if to put the final nail in this coffin, the Nobel Committee awarded its prestigious economics prize to James A. Robinson, Simon Johnson and Daron Acemoglu, a trio of economic researchers whom the committee credited with helping the world “understand differences in prosperity between nations.”
For those of us bent on trafficking in optimistic stories about Africa, this cavalcade of news about its undeniably dire economic prospects is alarming. What’s the use of highlighting good stories if the mega-trend is a tragedy? What does it matter that Africans are happy people if they’ll be poor for the rest of their lives?
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The Economist, as we’ve already seen, blames illiberal economic environments across the continent. The World Bank, in its April report, points its fingers at “pre-pandemic vulnerabilities, recent overlapping crises, and wider problems – including the effects of climate change and increases in violence and conflict.”
Malthusian-minded commentators will no doubt pile on with a reminder that Africa’s demography is the main culprit. All that rapid economic growth is being cancelled by the continent’s rapidly expanding population. The pie is not growing fast enough to keep up with the number of mouths.
To all of which, for an inveterate afro-optimist like yours truly, the only sane response should be to unleash fresh dollops of lipstick. For though, in the grand scheme of the global economy, Africans are currently falling behind, there is plenty of room for nuance, and plenty of reason to not give up on the continent.
Reasons for hope
For one, the situation is not equally dire across the continent. The numbers are dragged down by a specific set of grossly underperforming economies. Bundling stable economies like Ghana into the same group as the flailing conflict-ridden ones like Mali into one set will always produce a flawed picture. Of course, that some countries are worse off than others isn’t exactly cause for celebration; but it must nevertheless be taken into account.
Second, the unalloyed optimism of the past was always misled. It should have been tempered by the obvious fact that, although many African economies were growing rapidly, almost all of them were starting from a very low base. That growth must be sustained for several decades to produce meaningful change. The best illustration of this is China, the economic champion of the global south which, despite over three decades of rapid growth, is still far from reaching America’s GDP per capita.
Third, there is still ongoing improvement in specific metrics that have an impact on the real-world standards of living of Africans. For instance, life expectancy has been trending up for decades; it is now 64.38 years on average. And the impact of major infectious diseases, which make people miserable and are a drag on economic growth, is gradually being stanched.
And fourth, if this dead horse may admit of a few more floggings, GDP per capita, though it’s a very graphic metric, really doesn’t tell the whole story. America’s US$85,373 per capita GDP (assuming it were evenly spread to every American), would be sufficient for a decent life there. In most African countries, it would constitute obscene wealth.
Across the continent, what’s needed for a decent life is a pretty minimal amount of money. In Kenya, for instance, by my rudimentary calculations, an annual household income of US$ 10,000 would suffice for most urban families to live rather well; rural families need even less. Sure, very few Africans make even that amount. But having it as a standard, rather than America’s equivalent (over US$ 80,000, for a single person, in much of the country), paints a very different picture.
All this is to say that there is a bigger picture. Yes, Africa has started falling behind, and the alarm over this dismal trend is definitely warranted. Economists and leaders across the continent need to respond with common-sense, people-centred reforms to resuscitate growth.
But they shouldn’t do it merely to increase GDP per capita; rather, they should do it to make the lives of Africans better.
What do you think of this analysis of Africa? Leave your comments below.
Mathew Otieno is a Kenyan writer, blogger and dilettante farmer. Until 2022, he was a research communications coordinator at a university in Nairobi, Kenya. He now lives in rural western Kenya, near the shores of Lake Victoria, from where he's pursuing a career as a full-time writer while concluding his dissertation for a master's degree. His first novel is due out this year.
Image credit: Pexels
Have your say!
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Rob McKilliam commented 2024-10-23 16:02:46 +1100“What does it matter that Africans are happy people if they’ll be poor for the rest of their lives?”
That is a very telling question. I’m not sure if the author was being ironic. Nevertheless it shows how obsessed our western culture is with material stuff.
Perhaps we should ask each other the (more important?) question: “What does it matter how poor you are if you’ll be happy for the rest of your life?"
Steven: I have only just read the article. I have lots of other things to do to keep me occupied and happy :-) -
mrscracker commented 2024-10-23 01:13:43 +1100Mr. Steven, you know readers here are on different global time zones? Who comments first might be affected by that time difference.
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mrscracker commented 2024-10-23 01:11:27 +1100I’d take anything coming from The Economist with a large grain of salt.
Thank you Mr. Mathew for all the articles you share here & God bless you. -
Michael Cook followed this page 2024-10-22 21:18:31 +1100
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Paul Bunyan commented 2024-10-22 19:31:02 +1100I think the reason for Africa’s problems is very simple, yet hard to rectify.
They spend too much time having children and trying to survive. They don’t spend enough time making life better for everyone. Little time and few resources is spent on education, healthcare and crime prevention.
The first step to crime prevention is the alleviation of poverty. Countries with solid social safety nets like Sweden and Denmark have very little crime, particularly violent crime.
They also tax their billionaires fairly.
https://www.investopedia.com/incometax/which-countries-have-highest-taxes-high-incomes-0/
https://taxfoundation.org/data/all/eu/wealth-taxes-europe-2024/ -
Steven Meyer commented 2024-10-22 15:14:37 +1100I saw this piece. To test a theory I refrained from commenting. I wanted to see who, if anyone, would be the first to comment.
No comments.
Theory verified.
With the exception of a few countries on the Mediterranean littoral, nobody gives a damn about Africa and its travails.
Sad but so it goes. You’re on your own guys. -