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THE 2011 Ernst & Young’s Africa attractiveness survey had a very interesting title - “It's time for Africa...”
Even the year before that, just before the 2010 Soccer World Cup, singer and songwriter Shakira brought out a song entitled “This time for Africa”. The lyrics to the song carried a familiar theme talked about by economists, venture capitalists, investors, analysts and anyone who cared to discuss Africa.
Shakira sang: “People are raising expectations, go on and feed them. This is your moment, no hesitations.” This might have been a theme song for a football tournament, but the words had a deeper meaning. People were really raising expectations about Africa - and the continent literally had it all to feed them. From many fronts, it really looked like Africa’s time had indeed come.
The World Bank, in a 2011 report entitled "Africa’s Future and the World Bank’s Support to it", shared the same view. It said Africa could be on the brink of an economic takeoff, much like China 30 years ago and India 20 years ago.
African economies looked the part, even during the global financial crisis, growing by 5% in 2010, 5.5% in 2011 and 6% in 2012 according to International Monetary Fund (IMF) forecasts.
While some African countries are still on a growth trajectory, there is a feeling that the tide has long gone out and Africa has found itself swimming naked. Several countries touted as Africa's growth frontiers have since lost that momentum and are struggling for a new lease of life.
Take for example countries such as Angola and Nigeria, whose growth depends to a great extent on oil revenues. With the oil price above $100 a barrel, the two countries among others made observers from business, political and institutional communities believe that Africa’s time had arrived.
However, the price of oil has since fallen below $50 per barrel, leaving many to question Africa’s growth potential. Sub-saharan Africa’s oil exporters, which account for nearly half of the region’s aggregate output, have been hit hard by the sharp oil price decline. Budgets have since been revised and spending, especially capital expenditures, have been cut. This trend is radically altering the narrative of the Africa growth story.
The commodity price boom also raised belief that Africa’s time had indeed come. Increasing demand for natural resources by China saw most commodity prices reach record highs around 2011 and 2012. Several African countries blessed with abundant natural resources recorded tremendous growth in both investments and revenue. Jobs were created and investments in capital expenditure were increased, with everything pointing to an economic boom.
Lofty dreams dashed by external shocks
The lofty dreams of economic transformation were, however, abruptly halted by external shocks from volatile global commodity markets. A slowdown in the Chinese economy, the expected hike in the US interest rate and falling export commodity prices have changed sub-Saharan Africa’s economic fortunes, damaging some economies to a meltdown.
The IMF has already downgraded the 2015 growth forecast of South Africa, Zimbabwe, Angola, Malawi, South Sudan, Nigeria, Ghana, Burkina Faso and Uganda. These countries had the biggest downgrade margin, as they rely mostly on commodities for their export earnings. Zambia is one of the hardest hit, with its main export earner, copper, now facing a bleak future because of a price slump.
It is against this background that I found myself asking: “When will Africa’s time come?" We have heard that Africa’s time will come because of the growing middle class supported by a young population. Investor and philanthropist George Soros even described Africa as 'one of the few bright spots on the gloomy global economic horizon'. The African Development Bank would throw in the statistics and say 13% of Africa’s population already falls within the middle class.
But looking deeper into Africa one would see that Africans are mainly rich or poor, and not middle class.
We have also heard that Africa has the arable land to feed the world. Experts say 70% of the world’s uncultivated arable land is on the continent. But chances of this helping Africa fulfil its potential are also fast disappearing, if a report published by the Montpellier Panel is to be believed.
According to the panel - an eminent group of agriculture, ecology and trade experts from Africa and Europe – about 65% of Africa’s arable land is too damaged to sustain viable food production.
Add to that the issue of climate change, and you are left wondering when Africa’s time will really come. According to the most recent estimates from the International Panel on Climate Change, Africa is becoming the most exposed region in the world to the impacts of climate change. In sub-Saharan Africa extreme weather will cause dry areas to become drier and wet areas wetter, and agricultural yields will suffer from crop failures.
According to Idah Pswarayi-Riddihough, the World Bank’s lead environmental and natural resources specialist for Africa, the environmental effects of climate change will have a direct impact on the economic development of many African countries. As much as 9% to 20% of sub-Saharan Africa’s arable land will become much less suitable for farming by 2080.
After all has been said and done, you also feel that Africa's problems are exacerbated through mismanagement by weak bureaucracies, corruption and often, predatory dictatorships.
Nene sacking progressive or retrogressive?
Take the sacking of South Africa’s finance minister Nhlanhla Nene, for example: is this progressive or retrogressive? We are told the move was met with scorn from all corners of SA, and that tells you a story. If nature and external forces cannot damage Africa's growth potential, the continent's leadership will do the job.
Given this background, it's really hard to see when Africa’s time will come, but as Shakira puts it in song: “The pressure is on. You feel it. But you've got it all. Believe it.”
* Malcom Sharara is Fin24’s correspondent in Zimbabwe. Views expressed are his own.
