Africa is expected to reverse an economic contraction linked to the coronavirus crisis next year after containment measures are eased, the International Monetary Fund said, but the impact will be felt for years to come.
Sub-Saharan Africa’s gross domestic product is on track to shrink this year by 1.6% — its worst performance on record — because of the combined effects of the disease and plummeting oil and commodities prices. That is around 5.2% lower than the IMF’s pre-pandemic forecast.
Growth of around 4% should follow in 2021, according to the IMF’s regional economic outlook for Africa, released on Wednesday.
But the Fund warned that firm forecasts are currently hard to make. If the coronavirus outbreak is more protracted than currently expected and causes a deeper global recession, it sees Africa’s economy shrinking an additional 2.5% this year.
“I don’t think we’ve ever had as difficult a time trying to do projections in the institution, certainly in my 25 years,” Abebe Aemro Selassie, head of the IMF’s Africa department, told Reuters in an interview.
The Fund’s baseline scenario assumes that measures aimed at containing the disease, including lockdowns, will be concentrated in this year’s second quarter.
“We hope to see a rebound after that, with some recovery into next year. In some sectors such as construction or services, there will be pent-up demand and there could be a bounce back in those sectors,” Selassie said.
The pandemic will cause persistent, large losses of output “with the level of real per capita GDP expected to be about 4.5% lower by 2024 compared with the pre-COVID-19 projections,” the report stated.
African oil exporters can expect a 2.8% contraction this year, according to the IMF report. Other resource-intensive economies will shrink 2.7%.
Non-resource-intensive countries are expected to see growth decline to 2.0% from 6.2% last year. Within this group, however, tourism-dependent countries, including Cape Verde, Comoros, Gambia, Mauritius, São Tomé and Príncipe, and Seychelles, are projected to see a 5.1% contraction.
To fight the pandemic, the IMF is advising countries to ramp up health spending, release fiscal support to mitigate its economic impact and ease monetary policy stances to support growth.
International support is also essential, it said.
The Fund is set to provide some $11 billion to 32 sub-Saharan countries that have requested help in recent weeks.
To give countries breathing room during the crisis, the IMF and World Bank have proposed suspending debt service this year for the world’s poorest countries. Wealthy nations are expected to answer the call during a meeting of the Group of 20 (G20) major economies on Wednesday.
The IMF is not at this stage endorsing the kind of broader relief and debt cancellation African finance ministers are calling for.
“Debt sustainability is country‑specific and a medium‑ to long-term issue. Much will depend on how countries recover from this shock. My sense is they will do so at varied speeds,” Selassie said.
Africa’s creditor landscape has grown increasingly complex over the past two decades. Debt is held not only by Paris Club members and multilaterals, but also China, commercial banks and Eurobond holders.
“Quite a lot of thinking and work is needed to make sure that we understand and have modalities through which we can do debt relief operations,” he said.
“That’s really been kick-started with a vengeance as a result of the challenges countries are facing right now ... a new architecture is needed.”
Many African countries have been recording high economic growth rates for years. However, a recent study showed that poverty on the continent has increased again. How can this be?
When it is about poverty in Africa, there are many misunderstandings. According to surveys, a large proportion of people in Europe and North America are convinced that little or nothing has been done in recent decades to combat extreme poverty on the continent. This is no surprise: stereotypes from the colonial era, memories of the terrible famines of the 1980s and current reporting on refugees easily obstruct a clear view of the living conditions of people in African countries.
In fact, the figures even suggest the opposite: there is progress - at least in the number of people who have to live on less than $1.90 (€1.76) a day. "Overall, the proportion of people in Africa living in monetary poverty has clearly declined, from 54% in 1990 to 41% in 2015," World Bank economist Luc Christiaensen said in the DW interview. The main contributors to this development were the expansion of infrastructure in rural areas, increased agricultural productivity and years of robust economic growth in most African countries.
So the trend is positive, but the whole truth is that rapid population growth has actually increased the absolute number of poor people in Africa, from 278 million to 413 million. The most important project of the UN's Sustainable Development Goals (SDGs) - the end of all kinds of poverty by the year 2030 - will therefore most likely be missed by Africa. According to World Bank estimates, 20% of all people in sub-Saharan Africa will still be living in poverty in 2030 unless the governments of Africa significantly step up their poverty reduction efforts.
But it doesn't look like that at the moment. At least this is what a recent, representative study by the pan-African research institute Afrobarometer, which is regularly questions people in more than 30 African countries about the provision of their basic needs, suggests How often did you not have enough to eat last year? How often did you not have access to clean water? The researchers summarize the results in the so-called Lived Poverty Index (LPI).
The results of the study published this month are disillusioning. According to the study, between 2014 and 2018, lived poverty rose slightly in Africa for the first time in more than a decade. In some countries - including South Africa, Niger and Uganda - it even rose considerably. Although people are still better off on average than they were some ten years ago, the figures indicate that there are deeper-seated difficulties in the fight against poverty.
For study author Robert Mattes, a political scientist at the University of Strathclyde in Scotland, the recent rise has one main reason: "Africa's democratization, which has been going on for decades, has come to a standstill," Mattes told DW. Even one well-functioning multi-party systems, such as in Zambia, Tanzania or Benin, have now come under pressure from authoritarian leaders. "This decline in democracy leads to a neglect of the needs of the rural population in particular. There are fewer incentives to take care of the things that reduce poverty," said Mattes.
Data from the study show that lived poverty is lowest where electricity networks, sewerage systems, roads and mobile phones are relatively well developed. Governments should therefore invest primarily in public infrastructure, Mattes said.
Inequality as a driver of poverty
Although the results of the Afrobarometer study match the assessments of other organizations on poverty in Africa, they also raise an apparent paradox. For years, Africa's economies have been recording some of the highest growth rates in the world, with the African average GDP rising by 4.7% per year between 2000 and 2018. Although the figures have fallen slightly in recent years, the question remains: shouldn't Africa's economic growth also be reflected in the development of poverty?
Henry Ushie of Oxfam Nigeria has an explanation for the sometimes huge discrepancy: "If we want to fight poverty, we must first fight inequality. Inequality is the biggest driver of poverty in the world." Economic growth, largely due to the sale of commodities, simply does not reach ordinary people. Inequality is particularly high in Nigeria, Africa's largest economy.
Oxfam therefore uses the so-called Commitment to Reduce Inequality Index to evaluate the efforts of governments in the fight against inequality. Among other things, it examines tax justice, investment in education and health, and gender equality. The results of a recent survey in several West African countries are sobering. "Governments in the region are not particularly committed, and unfortunately Nigeria is even ranked at the very bottom," said Ushie.
In the near future, African governments are likely to face another problem: The coronavirus, which could not only pose challenges to the health systems of African countries but is already slowing down the global economy. "The prices of oil and other commodities will fall and countries that live on the export of these commodities will have to go further into debt," said Luc Christiaensen from the World Bank. It remains to be seen whether countries that are less dependent on exports will also be affected. "In the fight against poverty, the coronavirus has thrown another obstacle in the way of African governments."
Culled from Deutsche Welle
Narratives are essential. Humans are, after all, “helpless story junkies”. Business and economic success depend much more than is commonly acknowledged on getting the narrative right. And if there is a narrative where getting it right or wrong matters hugely, it is the narrative about Africa’s industrial development.
Therefore, African industrialisation is essential. Unfortunately, the dominant narrative is that Africa has been de-industrialising, even prematurely. In this narrative, it is also questioned whether Africa can ever industrialise. African countries have even been advised not to try. The World Bank’s “Trouble in the Making” report concludes that manufacturing is becoming less relevant for low-income countries.
Fortunately, a very different narrative is possible. In a recent paper, I argue that Africa can industrialise because of three factors. These are “brilliant” new technologies enabling digitisation, smart materials and 3D-printing; a more vibrant entrepreneurship scene; and Africa’s growing middle class (as measured by the share of households that earn between $11 and $110 per person per day), which supports the continent’s first generation of indigenous tech-entrepreneurs.
Consider therefore the following narrative: More than 300 digital platforms, mostly indigenous, are operating across the continent. There are also more than 400 high-tech hubs, and more are being added. In addition, venture capital funding into African tech start-ups increased ten-fold between 2012 and 2018.
Moreover, manufacturing has more than doubled in size in real terms since 1980. And since 2000, manufacturing value added has grown at more than 4% a year. That is double the average between 1980 and 2000 (numbers from the Expanded African Sector Database).
As a result, total employment in manufacturing in 18 of the largest African economies (for which there is data) grew from roughly 9 million in 2004 to more than 17 million by 2014. That is an 83% increase in ten years. The proportion of labour in manufacturing for Africa as a region grew from roughly 5% in the 1970s to almost 10% by 2008.
So, how will these trends shape the future? I argue that they will result in three varieties of industrialisation.
The first variety can be labelled “acquiring traditional manufacturing capabilities”. This variety is implied by Overseas Development Institute researchers Karishma Banga and Dirk Willem te Velde. It will be experienced by countries and sectors where technological change is too fast and complex to benefit immediately. These countries and sectors will need time to first put complementary investments in place, while at the same time continuing to promote traditional labour-intensive manufacturing.
The second variety, “fostering sectors with the characteristics of manufacturing”, is elaborated in a recent UNU-WIDER book. Here it is argued that service sectors can take up “the role held by manufacturing in the past”. In many countries, services such as ICT and telecoms, tourism and transport, financial and farming services can lead to productive development.
The third variety, “resurgent entrepreneurship-led industrialisation” is based on my earlier work. I point to the growing list of achievements of African countries in terms of high-tech manufacturing. For example South Africa leads in advanced manufacturing in having one of the world’s largest 3D-printers, used to manufacture parts for the aviation industry.
Different combinations of these varieties will dominate in different countries. For example, Kenya is already experiencing the simultaneous development of high-tech financial services alongside growth in traditional manufacturing, such as food processing and textiles, as well as clusters of advanced manufacturing. While every country’s pathway will be a unique combination of these varieties, what they will have in common is that progress will require that they deal with the impact of new technology, especially digitisation, on manufacturing.
To ensure momentum is maintained, the narrative about industrialisation has to change. As Israeli historian Yuval Noah Harari pointed out, neither land – the core resource of feudalism – nor physical capital – the core resource of 20th-century capitalism – will be decisive for competitiveness in the future. Instead, data and data science, free information flows, ICT (data) skills, and decentralisation of decision-making will be the decisive factors.
What needs to be done
With an outdated story that gives up on manufacturing, Africa will fail to close the huge digital gap it still faces. The gap is reflected in the fact the continent contributes less than 1% of world’s digital knowledge production. To reduce this gap, African countries will have to start by expanding internet access and use. If internet use across the continent can be expanded to the same rate as in high-income countries, 140 million new jobs and US$2,2 trillion could be added to GDP.
What must be done to change the narrative? What do African governments need to do? The first is that its leaders need to start telling more stories about the future than about the past. Perhaps, like China’s leaders, they can even be inspired by science fiction. British best-selling author Neil Gaiman relates how China started to embrace science fiction after sending a delegation to
“the US, to Apple, to Microsoft, to Google, and they asked the people there who were inventing the future about themselves. And they found that all of them had read science fiction when they were boys or girls.”
Helping to imagine the future of African industrialisation, South African President Cyril Ramaphosa recently stressed that fact that Africa is one of the early adopters of mobile telephony and moreover that the continent needs to aspire to more:
We need to focus on the new technologies that are going to revolutionise the world, and we need to be ahead of the curve.
This is the right narrative. It is necessary, although not sufficient for African industrialisation. For this, words need to lead to actions. And some consistent actions, at least for a start, would be for African governments to refrain from creating stumbling blocks for their brave new tech-entrepreneurs, such as curbing access to the internet, restricting digital information flows, under-investing in science, technology, engineering and mathematics education, neglecting data-privacy legislation, and restricting the rights of women to work in manufacturing.
The number of people in Africa without access to electricity remain staggering and unchanging with every report—around 640 million people don’t have access to a grid. And even when some of people do have access the electricity supply is unreliable and unstable.
It’s a problem across the continent. The most consistent and promising approach to tackling this huge obstacle to development has come with the off-grid pay-as-you-go solar power model, now called PayGo. The sector started out in East Africa built around combining the improving and increasingly cost-effective solar technology with the region’s mobile money advantage, thanks to the successful reach of Safaricom’s M-Pesa in Kenya.
Companies like Nairobi-based M-Kopa, who we spoke with recently at the Collision conference in Toronto, have signed up 750,000 homes in the region on the back of that payment platform which has been key for also enabling users to obtain credit and manage their payments. “The energy is kind of the easy part,” acknowledged chief executive Jesse Moore.
Also on the panel with Moore in Toronto was the musician Akon, who has famously been building a solar power business for a few years in several African countries. His latest initiative to to develop a crypto-currency to get round the difficulties with payments and boosting financial inclusion.
PayGo solar isn’t just reliant on classic mobile money solutions. In some countries it’s being used with local bank partnerships such as in Nigeria or with credit bureaus in India, for example.
The rise and challenges of PayGo are covered in the World Bank-backed Lighting Global report which analyzes the market attractiveness of the model around the developing world. Globally, the sales volume of PayGo products grew by 30% last year with revenues growing even faster at 50% driven by customers upgrading to solar home systems beyond basic products like solar lamps. According to the global off-grid solar market report, PayGo companies represented just 24% of the sales volume in the last six months of 2018, but accounted for 62% of revenues.
When it comes to demand Kenya and Uganda score high particularly when it comes to users’ “willingness to pay”, while Kenya also does well on the supply side along with Indonesia, driven by the availability of finance to support the sector.
While the report covers 24 countries across sub Saharan Africa and Asia, it’s clear East Africa is the star of the show with more than 70% of the global PayGo market’s revenues.
In Lighting Global’s country focus on Nigeria, Africa’s largest economy, the demand for PayGo services is the highest of country’s covered because of the unreliability of the country’s existing grid and low electrification rates especially in rural areas. The PayGo market has seen rapid growth in recent years with over 1.7 million households now using off grid solar products. But Nigeria’s current market penetration is still low, at just 4% of the potential market.
Nigeria’s complex regulatory environment is identified as one hurdle to enabling better supply with opportunities such as supporting mobile money more widely. But on the plus side the country offers innovative business models, including partnerships with mobile operators for airtime credit enabled PAYGo products and retail banks to leverage agent networks have helped some solar operators overcome barriers to market.
In the last week, Israeli media has been awash with news of the controversial visit of Nigerian cleric T.B. Joshua to Nazareth.
Initial news of the visit ignited a furore among apprehensive religious leaders from both the Muslim and Orthodox Christian sector but the tone among locals has emphatically shifted in the aftermath of the successful event.
Dele Momodu, the larger-than-life owner of Ovation Magazine and erstwhile presidential candidate in Nigeria, was among the visitors in Israel to attend the much-publicised Christian event in Jesus’ hometown.
Whilst traversing the ‘Holy Land’, he sampled opinions regarding the controversial cleric and was surprised at the warm response of Israeli’s.
“Joshua-mania hits Israel… It is incredible how T.B. Joshua is wowing the people of Israel,” wrote Momodu to his 500,000 followers on Instagram, subsequently sharing short video clips of taxi drivers speaking glowingly of the cleric.
“Joshua is a good man,” a Nazarene driver named Alosh ecstatically remarked to Momodu. “He is always welcome to Israel. Everyone knows him here and we love him!”
Buttressing Momodu’s assertion, the Mayor of Nazareth, Ali Sallam, touted the economic benefit derived by Joshua’s visit in an interview with local Arabic media, stating the region of Nazareth would accrue up to $1,000,000 as a result of the influx of tourists.
A Nigerian living in Israel named Kennedy stated that Israeli reactions towards him – and his fellow Africans living in the nation – had significantly brightened after Joshua’s two-day event.
“Many of us Africans who work here in Israel are treated with suspicion and we sometimes feel marginalised,” the Tel-Aviv based electrician originally from Imo State said in a video posted online.
“But after TB Joshua’s visit, I have observed a notable difference. Many people have approached to ask me more about Nigeria; they are responding far more positively to me and black people in general,” he stated. “I can testify that T.B. Joshua’s meeting in Nazareth is rebranding Africa’s image abroad.”
Writing on Facebook, Julian H – a pilgrim from UK who attended the event – recounted the experience of how an Arabian seller at a local market gave him free fruit after learning he had attended the meeting with Joshua.
“He told me he watched the event live on a local station and was amazed that miracles can still happen today in Nazareth,” the Brit explained.
“Whether you hate this man or like him, the fact remains that T.B Joshua is Nigeria’s biggest export to the world at the moment,” penned Chukwudi Iwuchukwu, a lawyer and social media influencer, on Facebook.
“No other Nigerian – dead or alive – has the capacity to attract such global media attention except him, which makes him one of Africa’s biggest ever icons,” he bluntly wrote.
Opinion among the local Muslim community in Nazareth – which was significantly divisive before the event – has also swung heavily in the pastor’s favour in the aftermath.
“I thought Joshua was coming to try and force us to convert,” an Arabic clothes vendor named Habib stated.
“But I realise he is just a good man with a message of love for all. Also, I sold more in this last week than in the last four months combined because of the tourists he brought to our town – so he’s definitely welcome back!”
A young group of Arabic men admitted they actually attended the event to mock it. “I went with my friends for a joke. I thought they were all a bunch of actors but when I saw someone whom I personally knew receive healing, I started taking it seriously,” wrote Ahmed Dahar in Arabic on Facebook.
The two-day meeting, which has been viewed 500,000 times on Emmanuel TV’s YouTube channel since its broadcast, also received coverage from international media such as The New York Times and Reuters.
Joshua founded and leads an evangelical ministry called The Synagogue, Church of All Nations. His Christian television network, Emmanuel TV, says it is Youtube's most subscribed to ministry channel with well over one million followers.
Evangelicals made up roughly half of the more than 2 million Christian pilgrims who visited Israel in 2018, according to the International Christian Embassy in Jerusalem, which oversees evangelical outreach to Israel.
Africa and Russia must harness their immense resources to foster a greater economic future for their people, the chairman of the Government of the Russian Federation, Dimitri Medvedev said in Moscow, Russia.
Medvedev, who was speaking during the Annual General Meeting of Shareholders of the African Export-Import Bank (Afreximbank), held as part of the Bank’s 2019 Annual Meetings, said Africa and Russia accounted for half the world’s resources.
He said although Russia’s presence in Africa had weakened in the 1990’s, the country had since then done a great deal of groundwork on joint projects in geology and mining, energy, industry, agriculture, fishing and telecommunications.
“We are promoting humanitarian ties, both as part of international assistance to Africa’s comprehensive development and on a bilateral basis,” Medvedev said. “In this new era of Russia-African cooperation, the Government of the Russian Federation will do everything in our power to make our partnership a success”.
He said globalisation had shifted growth to developing countries, making Africa a more important partner for Russia, adding that Africa could tap into Russia’s decades-old business and industrial expertise to boost domestic capacity and exploit opportunities.
Prof. Benedict Oramah, President of Afreximbank, called on partners from all corners of the world who shared the vision of a progressive African continent and of Afreximbank to “join forces with us to push forward a new agenda for Africa”.
“The Russian Federation represents one of such partners that Africa looks up to,” said President Oramah. Russia could be a source of investment goods that Africa needed to develop its infrastructure and could transfer critical technology in digitization and in mining and processing of raw materials. It could also be a source of non-debt creating investments in key areas, such as rail, aviation, healthcare, and petrochemicals.
“The traditional international relationships of the African continent are changing rapidly as we forge ever closer links with emerging partners who are eager to assist the economic development of Africa through sectoral and infrastructure investments across the continent and embrace ever stronger trading links,” he said.
“Russia, in particular, is forging a new relationship with Africa, as are other South-South emerging partners, which, in tandem with the African Continental Free Trade Agreement, gives me great confidence that Africa is well positioned to ride this era of global trade tensions that threaten to damage other continental economies.”
He said “A resurgent Africa is on a transformative journey of industrialisation and diversification to ensure that we are not over-dependent on our commodities and vast reserves of natural resources. We are heralding a new era of intra-African trade and global trade and investment relationships which will overturn the historic constraints curtailing the past growth and development of Africa’s economies”.
Closer links between Africa and Russia are evidenced by the partnership between Afreximbank and the Russian Export Centre, agreed in December 2017, which established a successful Africa-Russia institutional platform.
That platform is already delivering on its promise with such successes as the provision of vital fertilizer to Zambia and Zimbabwe, the implementation of mining projects with added-value processing capacity in Sierra Leone, participation in Africa’s rail infrastructure and the establishment of petrochemical plants in Angola and Nigeria.
Amb. Albert Muchanga, Commissioner for Trade and Industry of the African Union Commission, delivered a goodwill message on behalf of the Chairman of the Commission.
More than 100 speakers, including ministers, central bank governors, subject matter experts, business leaders, representatives of international trade organisations, export credit agencies, African and global trade development experts, and academics, spoke during the three days of the meetings, which opened on 20 June. The Annual Meetings focused on the theme ‘Harnessing Emerging Partnerships in an Era of Rising Protectionism’.
The 2019 Meetings marked the second time that they were taking place outside Africa. The 2012 Annual Meetings was held in Beijing.
Credit: The Independent Uganda
Chinese firms are eyeing partnerships with Turkish construction firms in Africa and are also looking to take stakes in Turkish companies, the head of the Turkish Contractors Association said.
Mithat Yenigun said he had discussed possible acquisitions by Chinese companies with a Chinese business representative, without giving details of which firms could be involved.
“They asked if we could sell stakes or cooperate,” he told Reuters. “They want to partner up with us, they are very willing to work with us. They also have unlimited money. That is what we lack.”
Turkish firms, which thrived in a domestic economy fueled for years by cheap credit and a construction boom, are now faced with economic recession at home. Those that took out foreign currency loans have found their debts soaring as the Turkish lira slumped last year.
Turkish contractors are second only to Chinese companies in terms of international contracts, according to the Engineering News Record (ENR) which carries out annual surveys of the world’s top contractor companies.
Yenigun said Chinese firms had a 10-15 year headstart in Africa. They now see Turkish firms as potential rivals, he said, but are also looking for opportunities to work together. He gave no specific examples of companies or projects but said that Chinese contractors want to work in projects in sub-Saharan countries with Turkish companies.
Turkish contractors had proved themselves in the region, Yenigun said, with large infrastructure projects which provide jobs by employing local workers during construction.
CONFLICT HITS CONTRACTS
At their peak, Turkish companies won around $30 billion worth of international contracts a year in 2012 and 2013, according to the contractors association. Business declined as conflict in Libya and Iraq cut back infrastructure projects there, and strained ties with Moscow affected business with Russia.
Last year Turkish contractors registered $19.4 billion of work abroad, with Russia accounting 25% of those projects and Saudi Arabia another 19%. Since the killing of Saudi journalist Jamal Khashoggi, a critic of Saudi Crown Prince Mohammed bin Salman, in the kingdom’s consulate in Istanbul last year, relations between Ankara and Riyadh have deteriorated.
Approval processes for construction tenders won in Saudi Arabia now take longer than they used to, Yenigun said.
“We feel the coldness when it comes to the relations with the government. An official process that previously took three months, now takes a year over there,” Yenigun said.
Turkish companies now aim to reach an annual volume of $50 billion with potential business in Africa, Russia, and Iraq, where they hope Ankara’s pledge of $5 billion credit for the reconstruction will boost business.
Turkish contractors are expected to build roads, highways, railways, Mosul airport, a hospital as well as mosques and residence projects.
The world’s developed economies are facing a decline in fertility so pronounced that some will see their populations -- and economies -- shrink in years ahead. Sub-Saharan Africa faces the opposite situation: Its population has more than doubled in the past three decades and is expected to triple again by the end of this century.
While the growing number of young, working-age people creates economic opportunities, it’s not clear how governments will manage the boom and whether the path to prosperity followed by other developing regions -- shifting into manufacturing -- is still available. Will the benefits of a more crowded Africa outweigh the drawbacks, or are its problems too dire and its governance too weak?
1. Why the surge?
Population growth in sub-Saharan Africa owes primarily to better medical care, which has slashed infant and child mortality and raised average life expectancy from 50 to 61 since 2000. The population has soared to about 1.1 billion and it could hit 4 billion by 2100, says the United Nations. Nigeria alone is predicted to double to 400 million people by the middle of the century, making it the world’s third-most populous country after China and India. Sub-Saharan Africa’s per-capita gross domestic product has climbed 40% since the start of the century to $1,652, compared with $1,987 in India. However, oil and mineral riches mean a handful of nations are 10 or more times wealthier than a score of others that remain desperately poor.
2. How could Africa benefit?
Almost 60% of sub-Saharan Africans are younger than 25, compared with one-third in the U.S. This “youth bulge” could translate into an ample and energetic workforce. But the benefits accrue only when greater prosperity reduces fertility rates. If the next generation has fewer babies than their parents, the proportion of working age people would rise relative to the number of their dependents -- mainly children and the elderly -- creating a so-called “demographic dividend.” Smaller families allow more women to secure paid work, and parents and governments are able to invest greater resources in each child. That’s what happened as Asia and Latin America developed, but Africa’s fertility drop-off is forecast to take much longer due to deep-seated cultural attitudes and pervasive poverty.
3. What’s the biggest challenge?
Jobs. The African Development Bank estimates that more than 10 million new jobs must be created each year just to absorb the number of young people entering the workforce. Increased automation in manufacturing might squeeze off a traditional source of employment growth, so some countries are pinning their hopes instead on services. Call centers and other kinds of outsourcing operations have opened in South Africa and cities such as Lagos, Nigeria and Kinshasa, Democratic Republic of Congo. Tourism has overtaken coffee and tea exports as the top foreign currency earner in Rwanda.
4. What needs to change?
Education. Almost a third of children in sub-Saharan Africa don’t attend school, and on average just 4% of the population completes university. The region also struggles to feed its population, with one in four classified by the UN as malnourished. To move beyond subsistence agriculture, politicians must invest billions in public services and infrastructure such as water and electricity to serve a rapidly urbanizing citizenry. Mali and Uganda have improved roads and transport links to boost exports of mangoes and fish, while Ethiopia is building Africa’s largest hydroelectric plant, on the Blue Nile, to control flooding and generate power. Governments also must tackle environmental degradation, including worsening pollution and deforestation.
5. Can Africa’s population growth be slowed?
Yes, though progress has been slow compared with other regions. Women have 4.8 live births on average, down from 6.8 in the late 1970s but still nearly three times the number in Europe and North America. Rwanda encouraged family planning and made contraceptives available at clinics, driving its fertility rate down by more than half, to 3.8 over the past 20 years. But many other countries still fall short: on average, sub-Saharan African women have two more children than they want to, and in 14 countries, they average five or more children.
6. What if Africa can’t absorb all those people?
Overcrowded countries such as the Philippines, India, Bangladesh and Indonesia have seen waves of workers move abroad to fill jobs in more developed places and send earnings back home. While Africans are starting to follow suit, the outflows come as doors that were open for others may already be closing. In Italy, populist leaders are responding to rising anti-immigration sentiment by turning away the boatloads of Africans trying to reach Europe illegally across the Mediterranean.
Access to reliable and affordable electricity brings many benefits. It supports the growth of small businesses, allows students to study at night and protects health by offering an alternative cooking fuel to coal or wood.
This is mainly because there’s not enough sustained investment in electricity infrastructure, many systems can’t reliably support energy consumption or the price of electricity is too high.
Innovation is often seen as the way forward. For instance, cheaper and cleaner technologies, like solar storage systems deployed through mini grids, can offer a more affordable and reliable option. But, on their own, these solutions aren’t enough.
To design the best systems, planners must know where on- or off-grid systems should be placed, how big they need to be and what type of energy should be used for the most effective impact.
The problem is reliable data – like village size and energy demand – needed for rural energy planning is scarce or non-existent. Some can be estimated from records of human activities – like farming or access to schools and hospitals – which can show energy needs. But many developing countries have to rely on human activity data from incomplete and poorly maintained national census. This leads to inefficient planning.
In sub-Saharan Africa, there are more people with mobile phones than access to electricity, as people are willing to commute to get a signal and/or charge their phones.
This means that there’s an abundance of data – that’s constantly updated and available even in areas that haven’t been electrified – that could be used to optimise electrification planning.
We were able to use mobile data to develop a countrywide electrification strategy for Senegal. Although Senegal has one of the highest access to electricity rates in sub-Saharan Africa, just 38% of people in rural areas have access.
By using mobile data we were able to identify the approximate size of rural villages and access to education and health facilities. This information was then used to size and cost different electrification options and select the most economic one for each zone – whether villages should be connected to the grids, or where off-grid systems – like solar battery systems – were a better option.
To collect the data we randomly selected mobile phone data from 450,000 users from Senegal’s main telecomms provider, Sonatel, to understand exactly how information from mobile phones could be used. This includes the location of user and the characteristics of the place they live.
Data was gathered on the number of texts and calls, duration of call, and the locations where the texts and calls were made. This was compared to electricity profiles and consumption in urban areas and available information about the location of villages, schools and hospitals from the World Bank.
We found that mobile phone data produces an accurate representation of electricity demand through distinct patterns. For instance, when there are schools or hospitals nearby, there’s a huge spike in the number of calls and texts in the evenings – when people are at home.
This information gives us vital information for electrification planning. It lets us know how many people there are, the area’s electricity demands and the distance to the closest electricity grid. This allows us to then cost different electrification options – for instance if the grid should be extended or solar energy used – and select the cheapest option.
There’s huge untapped potential in mobile phone data as a source of human activity data. It opens up new possibilities to improve infrastructure planning in general. It can help increase electrification rates, but can also be used to make the provision of water, food, education, health and other valuable services more effective.
Eduardo Alejandro Martínez Ceseña, Postdoctoral Research Associate in the School of Electrical & Electronic Engineering, Electrical Energy and Power Systems Group, University of Manchester; Joseph Mutale, Professor of Sustainable Energy and Electric Power Systems, University of Manchester; Mathaios Panteli, Lecturer School of Electrical and Electronic Engineering, University of Manchester, and Pierluigi Mancarella, Professor of Smart Energy Systems, University of Manchester
The world is making remarkable progress in combating poverty. From 2000 to 2013, the portion of the world’s population living on less than the international poverty line of US$1.90 a day fell from 28.5 % to 10.7 %. That’s about one billion people lifted out of poverty.
In 2000 the United Nations launched the Millennium Development Goals, a coordinated international effort to eradicate poverty and raise living standards worldwide by 2030.
An even more ambitious global effort to eradicate poverty, called the Sustainable Development Goals was adopted in September 2015. This also seems to be producing significant results. An estimated 83 million people have escaped extreme poverty in the first three years after the goals were adopted – between January 2016 and July 2018.
At the same time, there’s been a dramatic shift in the geography of poverty around the world.
Poverty projections up to the year 2030 (the end of the Sustainable Development Goals) suggest that even under the most optimistic scenario, over 300 million people in sub-Saharan Africa will still be in extreme poverty. Thus success in poverty eradication under these goals will depend crucially on what happens in Africa.
According to our research, the adoption of the goals in 2000 played a significant part in accelerating the process of poverty reduction in the world. The implementation of antipoverty programmes and poverty reduction strategies in individual countries became a routine part of national development plans. But, there was considerable disparity in how different countries responded to the development goals as well as in their capacity to implement these plans.
In the early 1990s, African countries such as Nigeria, Lesotho, Madagascar, and Zambia had similar poverty levels to those of China, Vietnam and Indonesia. Yet, this group has been successful in reducing poverty, while the African countries haven’t.
So, why this disparity and how can poverty reduction in Africa be accelerated?
We looked at poverty trends in the developing world between 1990 and 2013. Using standard income poverty measures expressing the part of the population living on less than $1.25 and $1.90 a day, we found that poverty tended to fall faster in more poverty-ridden countries.
Good news? Yes, but such progress, although significant, doesn’t imply that the end of poverty is in sight everywhere. For example, if trends continue in a poverty-ridden country such as Mali, where 86.08% of people were living below $1.25 a day in 1990, it would take about 31 more years to eradicate extreme poverty altogether.
And, even a much less poor economy like Ecuador (where 6.79% people lived on less than $1.25 a day in 1990) is predicted to take about 10 more years to eradicate extreme poverty altogether.
Our research identifies a crucial role for state capacity in differing levels of poverty reduction. Sub-Saharan African states often suffer from limited institutional capability to carry out policies that deliver benefits and services to citizens. In other words, they have limited state capacity.
Building state capacity depends on many variables. It is greater when ruling elites are subject to effective limits on the exercise of their power through institutionalised checks and balances. It’s also greater in countries with a longer history of statehood. For example, China, an experienced state which is centuries old, may have developed a greater ability to administer its territory - through learning by doing. It has thus become more effective at delivering on policies compared to less experienced African states.
And our own research suggests that countries with the most effective governments reduced income poverty at up to twice the speed than countries with the weakest states.
Fighting poverty in Africa
The weaknesses of a state affects the fight against poverty in a number of ways.
Firstly, fighting poverty requires direct policy interventions. Yet poorer African countries are less effective in reaching their poor. For example, governments in sub-Saharan Africa don’t have the data and administrative know-how necessary for reliably identifying their poor. This means they can’t target resources to them. Anti-poverty programmes in countries such as Malawi, Mali, Niger and Nigeria miss many of their poorest households.
The growing evidence on the gaps in state capacity and the importance of effective states for poverty reduction implies that, without significant improvement in governance, Africa may fall further behind in meeting the first sustainable development goal target of ending poverty.
To accelerate the end of poverty, African states should focus on developing enough capability for designing and delivering poverty reduction strategies. Implementing these reforms is vital. After all, improving the quality of government is not only important to accelerating poverty reduction. It’s also a development goal in itself.