There’s been a lot of talk these past few months about Africa Rising, for whom and what for. But it’s kind of difficult for the average person to look beyond the sentiment and “promising statistics” to put that in some sort of perspective.
To my mind, we need to be thinking about Africa’s prospects in far more pragmatic terms. If you consider that Apple had bigger cash reserves than the United States Federal Reserve in 2011, and that many Fortune 500 firms are bigger than entire countries and enjoy better rates of growth, it becomes apparent that the scale and nature of the issues within the global economy should be situated in an entirely different rubric – with the caveat that GDP is a rather poor measure of economic growth.
If Walmart were a country, its GDP (US$443.9bn) would be greater than that of South Africa’s ($422bn). Visa would be bigger than Zimbabwe, Wells Fargo dwarfs Angola, and eBay, Amazon, Costco, Proctor & Gamble would swamp Madagascar, Kenya, Sudan and Libya respectively.
And if Africa were indeed a country, as Sean Jacobs would have it, its GDP (US$1.184 trillion) would be only around a fifteenth of the United States’ ($15.776 trillion). That’s a whole continent – the world’s second largest – and a continent where around 15 percent of the world’s population share 1.5 percent of the planet’s total gross domestic product of $78.95 trillion.
This is less astounding if it is considered that the top 10 poorest countries in the world are all in Africa, and moreover, if we consider the continuing dependency of the continent on development finance, its most important shareholders are its foreign investors and aid donors. Hopefully Chinese demand and the increasing role of the African Development Bank will change this. Therefore while Africa is rising, in reality, we’re talking about a fractional component of the global economy, and for growth to be meaningful for Africans, development and infrastructure spend needs to be extremely aggressive, an added difficulty with very few investment grade-rated sovereign bonds and economic aid expected to slow.
Inequality as measured by Gini co-efficients doesn’t tell a good story across the continent either – the pressing question for Africans is how to prevent this from becoming durable inequality? South Africa, its largest economy, not only contributes almost half of the continent’s GDP, but the rest of the continent has a long way to go to catch up with it. The point of the ‘Africa Rising’ narrative of course, is that there is a lot of opportunity in Africa because it’s starting from a low base. But if you put these statistics into context, growth rates need to be at least more than 10 percent consistently for another 10 to 20 years to have meaningful impact on human development and pull people out of poverty.