There are times when a quick round up of a topic with some guidance on further reading is useful.
I read ‘Counterparties’ created by Felix Salmon of Reuters, and in future will exert parts of this for you.
Here’s a good simple round up of the current state of the African Economy- not something you read about everyday, but useful nonetheless. The links are for a greater exposition of each topic.
It’s become quite popular in the last few years to declare that Africa will be the next great economic success story. Two years after an Economist cover story declared that Africa is rising, the continent’s still putting up strong growth. The IMF expects sub-Saharan Africa to grow at 6.1% this year, the second-highest growth rate of any major region in the world. As Brookings’ Amadou Sy says, “there is a consensus in African policy circles that we are witnessing Africa’s moment.” So this is the case for a success story.
Dani Rodrik, however, isn’t so sure. Africa’s growth may not be sustainable, he writes, because it hasn’t made enough progress in creating the type of manufacturing jobs that can transform the continent’s economies:
Fewer than 10% of African workers find jobs in manufacturing, and among those only a tiny fraction – as low as one-tenth – are employed in modern, formal firms with adequate technology. Distressingly, there has been very little improvement in this regard, despite high growth rates. In fact, Sub-Saharan Africa is less industrialized today than it was in the 1980s.
The Economist agrees: “buoyed by commodity income,” it says, Africa’s governments “have neglected industry’s needs, especially for roads and electricity”, thereby depressing the manufacturing sector. Ntsakisi Maswanganyi spells out the consequences for South Africa in particular.
African firms have another problem, according to a new paper by Leonardo Iacovone and Vijaya Ramachandran: they have trouble growing. African companies are roughly 20% smaller than their counterparties in other nations, and they don’t necessarily get more productive as they grow larger. The culprit could be the difficulty of dealing with African governments.
In July, Max Fisher broke down Africa’s coming population boom. The continent’s population is expected to grow by a factor of 5 over the next 100 years; Nigeria, its most populous nation, could see its population grow by a factor of eight. The country, the size of Texas, could have a population rivaling China’s by 2100.
With its youth population soaring, Africa may very well be nearing a “demographic dividend” that could push its growth even higher. That theory, says Francisco Toro, underlies the approach to development favored by the Bill and Melinda Gates Foundation. Last month, in his foundation’s annual letter, Bill Gates predicted that by 2035 there will be almost no poor countries left in the world. Chris Blattman thinks that is a bit optimistic. To catch China’s levels of per capita income by 2035, he writes, Kenya and Ethiopia will “have to grow as fast and unfettered as some of the fastest-growing nations in human history. Impossible? No. Likely? Almost certainly not.”
In summary here’s a fantastic infographic on Africa
So there you have it, an interesting review of the pros and cons of future development in Africa… could this be your next career option?