By the year 2050, Africa will have the largest workforce in the world. By then, one in every four people in the world will be from Africa. Its population will surpass India and China, and will play a major role in the global economy, both in terms of production and consumption. In simple terms, Africa will simply be too big to ignore.
Yet, the continent is not industrialised and its demographic bulge could either be a huge boom or disaster depending on which way one looks at it. And despite its size and scale, Africa is constantly referred to as having “vast potential,” whilst being excluded from meaningful discussions and debates around global affairs. However, with the right polices and there is an opportunity to reshape this.
Three major policy conundrums need to be resolved if the continent is to prosper: the tension between democracy and development, globalism versus protectionism, and whether technology will enable Africa to leapfrog or lag.
In the context of Africa’s most urgent priority — inclusive growth — how it reconciles these tensions will be crucial in shaping the continent’s fortunes.
There is much conjecture around the system that will best solve the “politics of the stomach.” Critics argue the western concept of democracy is not fit for purpose in Africa — especially since African countries are being asked to do what no other continent has ever done — industrialise and democratise simultaneously.
The developmental authoritarianism model has therefore been advocated. Critics also argue that despite greater political stability, regular and peaceful elections, and a lack of military influence in political life over the past two decades — Africa’s “democratic dividend” has not translated into meaningful economic gains.
Instead, it is said that democracy is incongruent with development — particularly looking at the successes of Rwanda and Ethiopia — who have delivered meaningful improvements in their people’s lives outside the democratic framework.
Experts cite Singapore, South Korea, China, Indonesia and Taiwan as examples of countries that modernised under a system of rigid political control.
Renowned economist Amartya Sen termed this the “Lee thesis.” Lee’s thesis argues that democracy and human rights are “luxury goods” that should only be attained once a certain level of development is reached. As proponents of this school of thought say: People do not eat votes, or elections or freedom of speech, and would easily sacrifice political pluralism if it meant there was a material improvement in the quality of life.
However, the major constraint to effective functioning of such a system is the quality of leadership. This depends almost entirely on an altruistic and enlightened autocrat to ensure continued progress. However, because such a system hinges on diluting institutional strength and political dissent, the risk inherent in it is that the sustainability of this economic model and its gains remain fragile. If less skilled, corrupt tyrants, rather than a highly-skilled, benevolent technocrat come to power the countries in question easily risk spiral into becoming failed states.
Trends in Africa are also diverging. While East Africa shows growing signs of authoritarianism and suppression of dissent, in Southern Africa — countries such as South Africa, Botswana, Angola and Zimbabwe — liberation movements have embraced reform agendas. Meanwhile, West Africa is consolidating democratic gains with frequent changes of power, enhanced judicial independence and respect for presidential term limits across countries like Gambia, Sierra Leone and Liberia.
It has become increasingly clear — regardless of the system or political construct a country adopts — what matters most is effective governance. The manner in which such issues are tackled is therefore less important than the end result. Leadership is the critical ingredient in this equation.
Traditional economic policy has been turned on its head in recent years amid a changing geopolitical landscape. The ‘protectionism versus globalism’ discourse is currently on top of Africa’s policy agenda. Will the continent adopt a more insular route towards an outward looking agenda like that of the US or China? Will funding and investment be secured in yuan or dollar?
Initial signs suggest that the continent’s policymakers will pursue both avenues — to various degrees and in different forms. It looks as if pragmatism, not ideology, is emerging as the central guiding factor in policy formulation.
On a macro level, as the rest of the world looks inward, Africa is looking to buck this isolationist trend via regional integration and increased cooperation. Indeed, Africa is in a unique position in that it has the chance to trade with an untapped market — i.e. itself. Regional trade is shockingly low at a mere 12%. The adoption of the African Continental Free Trade Agreement (AfCFTA) in Kigali was therefore an encouraging step in the right direction and demonstrated a willingness for leaders to craft African solutions to African problems.
Other initiatives such as the launch of the African Union Agenda 2063 (a shared road map for the integration and socioeconomic transformation of Africa by 2063), the promised African Union passport, the new Single African Air Transport Market, point to significant efforts by African leaders to take ownership of its destiny — rather than being bystanders — as has been the case in the past when foreign powers have jostled for influence.
However, despite the increasingly liberal orientation adopted on a pan-African level, there is also increasing clamour for protectionism. The notion of “highly selective” trade policies to stimulate certain key sectors has been put forward as a method of achieving “catch up growth.”
Rather than crude protectionism, this would be selective, smart and targeted — justified by the overall need to advance national development goals. The head of the UN Economic Commission for Africa, Carlos Lopes, advocates this kind of “smart protectionism” — where government industrial policy is meant to mediate rather than displace market forces.
The goal would be targeting sectors which can catalyse growth and employment based on a country’s comparative advantage. Chief among these sectors, would be agriculture, which could then see countries build and consolidate nascent industries which have the potential to transform economies, In doing so, the cycle of dependency on imports from foreign markets can be reduced.
Given the nature and scale of the developmental challenges Africa faces, digitisation and technology offer opportunities to overcome many traditional barriers to entry. There are limitations of many governments in providing necessary services, including healthcare and education, to the young population.
The example of M-Pesa, which saw Kenya move from zero mobile telephony to becoming a global leader in mobile banking, illustrates the transformative power of such technology.
But while AI, robotics and machine learning have the potential to be a game changer for Africa — this needs to be contextualised. Many countries in Africa are still struggling to name streets, fix potholes, provide functioning wifi and solve basic sanitation needs.
Despite these positives, new technologies also involve pronounced risks. Globally, they are causing the loss of many low-skilled routine jobs, of which Africa has a disproportionate share. It is estimated that up to 66% of all jobs in developing countries are at risk. This creates a conundrum for African countries: how to industrialise while not leaving anyone behind.
Amid these challenges, policymakers must attempt to deliver winning strategies in an increasingly integrated yet marginalising global economy. The focus therefore needs to be on factors within their control rather than aren’t. So, what should the priorities be?
First, leadership- We are in the midst of a “geopolitical recession” where global governance is backsliding. But given how far behind Africa is to the rest of the world, following this trend is simply not an option. Indeed, there is now an opportunity for the continent’s leaders to exploit the global leadership shakeup, if they can ensure their own houses are in order. But Africa’s leadership needs to recognise that relevance will only be achieved as a ‘collective’. Using the power of the ‘collective’ adds both scale and gravitas to Africa’s global voice and will allow the continent to adopt a more muscular approach to international affairs. When viewed on a continental level, features such as its population and market size, favourable demographic, rapidly urbanizing and rising middle class, and technological advances, become too big to ignore.
Second, greater integration would enable the continent to develop larger regional markets and build capacity to initiate African solutions to Africa’s economic and political problems. But for this to happen, it will take much more than political rhetoric. It will require practical steps and political will to move from policy to action. Third, economic diplomacy must be prioritised. Strategic competition between the rivals in the East and West should be exploited, with pragmatic rather than ideological levers of economic diplomacy prioritised to maximise a country’s economic interests. Rather than adopting an either-or approach to strategic allies, or picking one side over the other, African policymakers should exploit all interest based on their economic value.
What is clear is that policymakers on the continent will need to adapt to the changing geopolitical landscape with more creative and innovative strategies than in the past. Navigating these ambiguous conundrums will require skill, and dexterity and pragmatism. It will be tough, but getting it right is essential to successfully reshaping the continent’s future and moving it from the back burner to the forefront of the global agenda.