Africa economic renaissance!?

When I signed up to study economics of innovation, I never knew how emotionally draining the process would be. I really didn’t appreciate before how much more African countries need to do to ‘develop’. I didn’t even really understand what it meant to ‘raise living standards’. We know the usual rundown: dilapidated transport infrastructure, over crowded classrooms, a broken healthcare system, inefficient in energy systems, unreliable water and sanitation systems, etc. And everyone agrees that it needs to be fixed. But now as I begin to appreciate the magnitude of these problems from an economist’s perspective, and the mammoth effort required to pull us out of the mess, I find myself vacillating between hope and despair every single day.

A big hope/despair moment came last night when I read the Africa Competitiveness Report 2013–a joint publication of the African Development Bank, the World Bank Group and the World Economic Forum. Small sections of the report got me excited, e.g. a somewhat steady 5% growth rate, increasing productivity in some African countries (Ethiopia, Kenya, Mozambique, Tanzania), a slowly improving investment climate, a growing customer base,  relatively low sovereign debt levels, and ICT infrastructure development and related innovations. But majority of the report paints a bleak picture: the fact that the high growth rates do not necessarily translate to improved living standards for all, the ‘deep and persistent’ infrastructural underdevelopment, the small and underdeveloped manufacturing sector, regulatory problems, and unemployment, among others.

What was most saddening for me was the knowledge that Africa is no longer homogeneous with Asia and Latin America. Looking at the differences in GDP per capita (PPP) among the three regions, it’s obvious that there’s a gap slowly widening between Africa and the rest of the developing world. The graph below captures this scary phenomenon… know that ‘left behind’ feeling?

GDP PPP

But still, amid this choking darkness, there’s a flicker of light. Speaking as a Kenyan, I still see reason to be wildly optimistic. There’s tangible evidence that we’re taking steps to improve infrastructure: energy, roads, railways, airports; investments that will ease the cost of doing business and increase our competitiveness globally. There’s structural transformation towards manufacturing and services. The local financial market is developing, and new jobs are being created as Kenyans become more entrepreneurial. Although chaotic, there’s effort to improve health care, education, and general government efficiency. The young Kenyan population is becoming less apathetic about issues. And most exciting for me, there’s more innovative activity, evident in the way firms are investing more in R&D, flourishing tech-hubs and incubation centres, and increased university-industry collaboration.  I think these show signs of economic renaissance.

As an African student of economics, and innovation in particular, I have realised that I have to balance facts, reality, hard-core economic arguments with wild optimism… otherwise the risk of plunging into despair are high.

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3 thoughts on “Africa economic renaissance!?

  1. wakathenya, I completely agree. In fact all of these indicators of economic development (infrastructure, healthcare, education levels, employment, etc) are directly influenced by political leadership. Low indicators usually point to poor leadership. We have a long way to go.

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