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ECONOMY: “Sub-Saharan Africa Is Speeding Towards Affluence”

Julio Godoy

PARIS, Aug 25 2010 (IPS) - Africa is heading towards a bright economic future, according to a new book co-authored by the former director of the French state agency for economic cooperation and released recently in Paris.

In the book “Le temps de l’Afrique” (“The African Age”), Jean-Michel Severino, until last April director of the French state agency for economic cooperation, and his co-author Olivier Ray argue that sub-Saharan Africa has started the new millennium under far better economic and social circumstances than generally assumed.

To support their thesis that “Africa is rushing towards affluence”, as Severino put it in an interview, the authors use the most recent economic and social data, showing rapid economic growth, high investment and sinking poverty.

“The vision that we in Europe have of Africa — of a continent frozen in poverty and disease — is simply wrong,” Severino declared. “On the contrary, today’s sub-Saharan Africa is a region of high economic growth, with numerous business opportunities. Sub-Saharan Africa is now a high speed train rushing towards affluence and prosperity.”

Severino recalled that since the beginning of the century, the sub-Saharan African economy “has grown by a yearly average rate of 5.5 percent, against only 1.35 percent in the euro zone”.

Severino quoted a recent study by the U.S. National Bureau of Economic Research (NBER), which shows that African poverty “is falling rapidly”.

The NBER paper, by economist Xavier Sala-i-Martin and his research assistant Maxim Pinkovskiy, predicts that if “the present trends continue, the millennium development goal of halving the proportion of people with incomes less than one dollar a day will be achieved” by 2015.

“We are not nursing dangerous illusions about Africa,” Severino told IPS.

All regional indicators, from demographic growth to foreign investments, from urbanisation to participation in international trade, aided by political stability, support the thesis that Africa is steadily moving towards prosperity.

Severino explained that the demographic evolution in the region is now marked by a simultaneous fall in the birth rate and a more moderate population growth.

“By the year 2050, Africa will count some two billion inhabitants, with 60 percent of them living in cities,” Severino said. “Such a conjunction of urbanisation and demographic growth has historically always led to development, by improving productivity, by creating large markets, by stimulating domestic demand, with positive spill-over effects for the countryside.”

Severino calls this “the demographic dividend” and adds it to the considerable improvement in African state finances, due to the massive writing off of foreign debts and to increases in tax revenues.

Investment too, both state and private, has been steadily growing since the mid-1990s. High prices of commodities and raw materials further help to consolidate this strongly growing collective African economy.

In addition, Africa possesses a significant energy potential. “Africa exploits less than seven percent of its hydroelectric potential. The continent also disposes of a large energy potential in wind, sun, biomass and other renewable resources, practically untouched,” he said.

Severino also considered the People’s Republic of China’s growing economic investments and links with sub-Saharan Africa as another indicator substantiating the thesis of the region’s economic take-off.

At the same time, Severino noticed no single African economic model, strictly speaking. “But there are several common factors, such as political stability, sound public finances, investments in infrastructure and relatively high rates of savings and investments.”

Severino cautioned that climate change constitutes a major threat for Africa: “The inter-tropical zones are going to be the most affected by climate change. Because the region is very poor, its vulnerability to climate change is even higher.”

Rain patterns have already changed, leading to people remarking that “there is no rainy season anymore”. Such changes damage agriculture. In addition, climate change can increase deforestation, with skyrocketing mitigation costs, Severino added.

Some French commentators and economic analysts have praised “Le temps de l’Afrique” as “the most passionate book on Africa published (in France) in recent years” and as “offering an innovating view on Africa”.

Other analysts adopt a more critical stance on the book’s optimistic diagnosis.

Bakary Traoré, researcher at the Development Centre of the Organisation for Economic Cooperation and Development, regretted that the book “does not refer to the consequences of the global economic crisis on African development, or to the challenge of bewildered youth that continues to suffer educational deficits and the consequences of atomised societies.”

Similarly, Traoré regretted that the “absence of a welfare state and the inadequacy of political debate allow religion to take on a crucial role in public questions beyond its pure confessional function”. Such subjects, Traoré said, are not discussed in “Le temps de l’Afrique”.

Traoré underlined that Severino’s analysis offers an “updated reading of the changes taking place in Africa at the moment, and points to the powerful endogenous factors contributing to economic growth.

“However, Severino and Ray ignore essential questions shaping Africa’s future: The permanent crisis in education; the management of Africa’s strategic market of agriculture; the use of the fiscal and savings resources of the region; and the quality of social protection and assistance.”

All these factors, Traoré said, must be analysed in depth to conceive “sound public policies that could transform the present momentum in the region into a steady force to drive African development”.