Share

African growth 'based on quicksand'

The Hague - African countries’ economic growth, on average about 5% since the start of the century, looks good only on paper. In reality, it is based on quicksand.

This was said by British Africa expert Martin Meredith in an interview with the Dutch economic daily Financieele Dagblad. Meredith has written extensively about African affairs, most recently in a book entitled The State of Africa: A History of the Continent since Independence.

Meredith says African economic growth is mostly raw material-driven. “Filter out the income from oil, natural gas, bauxite, diamonds and iron ore, and barely anything remains. Of course, there is nothing wrong with earning money from raw materials, but mining and the oil and gas sectors employ less than 1% of the African population.”

Besides, corruption is endemic. The governing elites demand their cut. In Nigeria, for instance, corrupt officials have siphoned off about $220bn of oil money into their own pockets. And in Angola income from oil is even a state secret.

“Of course, corruption is not exclusive to Africa. It is also deeply entrenched in Asia. But an important difference is that Asian ‘corruption income’ is being more invested domestically. In Africa you try to get the money as fast as possible out of the continent, because the governing elite doesn’t know how soon they will have to make place for the next faction.”

Economic elite too strong to threaten

According to the World Bank, Meredith says, about 40% of private wealth is being kept outside Africa.

Meredith is doubtful about an African spring, because the economic elite is too strong to be threatened without dire consequences.

For instance, about 60 people control Angolan politics and the economy, and they simply buy the police and bureaucracy. Critics are murdered or banished.

“It is more lucrative to buy someone high up in the hierarchy than to challenge the whole system.”

Meredith says a race for Africa’s raw materials is developing, driven by Chinese growth. “The Chinese are particularly relentless and thus successful ... It is simple: If you cannot bribe a minister, you stand behind in the queue.”

In ex-French territories he does not foresee an “Isis scenario”, as the French simply intervene, as they did in Mali and Ivory Coast. “Nigeria is another story. It is certainly not a client state. The Islamic north has been neglected for decades and has become a feeding ground for Boko Haram. This movement is just as pitiless as Isis and has momentum.”

Meredith is not entirely without hope for Africa. He calls South Africa “a success in spite of the growing corruption”, while Ghana, Senegal and Botswana are “stable democracies”.

 - Fin24
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.02
-0.6%
Rand - Pound
23.97
-0.3%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,196.05
+0.1%
Silver
24.45
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,848
+0.3%
All Share
74,067
+0.2%
Resource 10
56,251
+1.1%
Industrial 25
103,518
+0.2%
Financial 15
16,466
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders