Africa s Third Liberation? 21 st Century Development Drivers. Greg Mills SIDA

Transcription

1 THEBRENTHURST FOUNDATION Africa s Third Liberation? 21 st Century Development Drivers Greg Mills SIDA 19 January 2012

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6 Point of Departure: Six Di Drivers People. Growth and Differentiation. Democracy and Conflict. Resources. Food. Competitiveness and Technology.

7 DRIVER ONE: DRIVER ONE: People

8 SSA Population: (B Billions s) Billion in Source: United Nations 8

9 Population by Age Group Male Female (in Billions) Source: United Nations 9

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12 The Urbanization Phenomenon Billiion ns Ttl Total Population % Urban Source: United Nations 12

13 This is where This is where she lives

14 This is where 100 she lives African Per Capita Income, Constant (2000) US$

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16 Result: by 2025 there will be 30 million people younger than 24 years in African cities a most potent political and cultural force on the continent. What does this mean for Africa? Stress on urban infrastructure Risk of appeal of populism Need to manage expectations Need to ensure rural growth

17 Yet her generation has the best chance of breaking out of poverty

18 The demographic dividend 70 Working Age Population (% of total population) World Sub saharan Africa

19 DRIVER TWO: Growth th& Differentiation

20 6000 Constant Per Capita Income Across Regions East Asia Latin America Middle East South Asia Africa

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22 Much has been achieved 40+ democracies Range of donors and allies Governance improved Growth over 5% Morehonest inward scrutiny Commodities revival

23 Africa vs. Largest Countries, Constant Per Capita Income Much has been achieved 40+ democracies Range of donors and allies DRC Governance improved Ethiopia Nigeria Growth over 5% Sub Saharan Africa Morehonest inward scrutiny Commodities revival

24 Much has been achieved 40+ democracies Range of donors and allies Governance improved Growth over 5% Morehonest inward scrutiny Commodities revival Differentiation important phenomenon

25 Much has been achieved 40+ democracies Range of donors and allies Governance improved Growth over 5% Morehonest inward scrutiny Commodities revival

26 GDP Growth and Employment Trends Despite the best growth decade on record, labour participation rates largely remained static Growth (% %) GDP Growth GDP Per Capita Growth Labor Source: Participation World Bank Rate and (ALL) International Labour Organisation Labor Participation Rate (YOUTH) Labor Fo orce Partici ipation Rate

27 DRIVER THREE: DRIVER THREE: Democracy & Conflict

28 25 Sub Saharan Saharan African Conflicts Conflicts

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31 The potential for social destabilisation exists it

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34 Arab and African Springs? Some commonalities: How to achieve growth with democracy and jobs? How to address population dynamics: 65% of regional population is under 30? 34

35 Egypt imports about half of its staples, and spends $15 billion a year in food Some commonalities: subsidies. But redistribution not a What substitute follows? for employment How to achieve growth with democracy Egypt s and population jobs?, currently 81 How to address million, population will reach 104m by 2025, and dynamics: 140m 65% of by regional population is under 30? 35

36 GLOBAL PER CAPITA INCOME (PPP) & INCOME INEQUALITY

37 DRIVER FOUR: Resources

38 Africa s Globalisation Link Western consumer demand Ai Asian production & savings Commodity demand

39 AFRICAN COMMODITIES BOOM

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43 But it never lasts Selected Commodity Prices (1998 US$) 10, ,000 8, , , ,000 Iron ore Oil ,000 Copper 3, , ,

44 DRIVER FIVE: Food

45 This is how she has to cope

46 A hungry man is an angry man. Raila Odinga

47 250 Economist Commodity Price Index: Global Food Prices Weekly index, 2000 = Index Source: Economist Commodity Price Index

48 250 Economist Commodity Price Index: Global Food Prices Weekly index, 2000 = Index Source: Economist Commodity Price Index

49 Africa s net food importers Angola Ethiopia Niger Benin Gabon Nigeria Botswana Gambia Sao Tome and Principe Burkina Faso Ghana Senegal Burundi Guinea Seychelles Cameroon Guinea-Bissau Sierra Leone Cape Verde Kenya Somalia Central African Republic Lesotho South Africa Chad Liberia Sudan Comoros Madagascar Swaziland Congo, Dem Republic of Malawi Tanzania, United Rep of Congo, Republic of Mali Togo Côte d Ivoire Mauritania i Uganda Djibouti Mauritius Zambia Equatorial Guinea Mozambique Zimbabwe Eritrea Namibia

50 Africa s net food importers: 39 of 49 Angola Ethiopia Niger Benin Gabon Nigeria Botswana Gambia Sao Tome and Principe Burkina Faso Ghana Senegal Burundi Guinea Seychelles Cameroon Guinea-Bissau Sierra Leone Cape Verde Kenya Somalia Central African Republic Lesotho South Africa Chad Liberia Sudan Comoros Madagascar Swaziland Congo, Dem Republic of Malawi Tanzania, United Rep of Congo, Republic of Mali Togo Côte d Ivoire Mauritania i Uganda Djibouti Mauritius Zambia Equatorial Guinea Mozambique Zimbabwe Eritrea Namibia

51 5000 Cereal Yields (Kg/Ha) in Developing Countries 4500 East Asia & Pacific Latin America & Caribbean South Asia Middle East & North Africa

52 5000 Cereal Yields (Kg/Ha) in Developing Countries 4500 East Asia & Pacific Latin America & Caribbean South Asia Middle East & North Africa Sub Saharan Africa

53 DRIVER SIX: Competitiveness, Skills & Technology

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57 Result: Africans, natural connectors, will increasingly have their lives shaped by global and regional information and financial exchange What does this mean for Africa? Impact on expectations A linked diaspora Avenue to globalisation, good and bad

58 The uneducated fall behind [picture of skills premium point] Skills Premium

59 140 Gross primary enrollment % East Asia & Pacific Latin America and Caribbean Middle East and North Africa South Asia Sub Saharan Africa

60 Net Enrollment Rate Minimum Mastery 0

61 Output Level Per Worker SSA productivity increases lag significantly behind South Asia and East Asia Driving further divergence across regions ,000 Produc ctivity (% Cha ange) South Asia East Asia SSA Outp put Per Worker r (USD) 30,000 25,000 20,000 15,000 10,000 5,000 0 South Asia East Asia SSA Source: International Labour Organisation 61

62 Not aid/donors but private sector growth crucial 62

63 UPSIDE PEACE DIVIDEND DOWNSIDE RISING INEQUALITY 63

64 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE & WIDENING DEMOCRATISATION DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS & RISE OF POPULISM (EG ZAMBIA) 64

65 UPSIDE PEACE DIVIDEND DOWNSIDE Distribution of African Population by Class Poor Class (<$2) Floating Class ($2 4) Middle Class ($4 20) Rich Class (>$20) BETTER GOVERNANCE RISING INEQUALITY SMALL MIDDLE CLASS

66 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS 66

67 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE 67

68 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE 68

69 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT 69

70 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE NATURAL RESOURCES DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT EXTERNAL DEMAND 70

71 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE NATURAL RESOURCES GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT EXTERNAL DEMAND GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM 71

72 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE NATURAL RESOURCES GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT EXTERNAL DEMAND GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM 72

73 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE NATURAL RESOURCES GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM RISING UNIT COSTS ELSEWHERE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT EXTERNAL DEMAND GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM LAND TRADABILITY 73

74 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT NATURALRESOURCES A S EXTERNAL DEMAND GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS LAND TRADABILITY LOW FDI 74

75 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT NATURALRESOURCES A S EXTERNAL DEMAND GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS LAND TRADABILITY LOW FDI 75

76 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT NATURALRESOURCES A S EXTERNAL DEMAND GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS INCREASED OPENNESS LAND TRADABILITY LOW FDI HIGH TAX RATE, LOW BASE 76

77 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT NATURALRESOURCES A S EXTERNAL DEMAND GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS INCREASED OPENNESS YOUTH ENERGY LAND TRADABILITY LOW FDI HIGH TAX RATE, LOW BASE YOUTH UNEMPLOYMENT 77

78 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT NATURALRESOURCES A S EXTERNAL DEMAND GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS INCREASED OPENNESS YOUTH ENERGY LAND TRADABILITY LOW FDI HIGH TAX RATE, LOW BASE YOUTH UNEMPLOYMENT 78

79 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE NATURAL RESOURCES GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT EXTERNAL DEMAND GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS INCREASED OPENNESS YOUTH ENERGY CHINA S INTEREST LAND TRADABILITY LOW FDI HIGH TAX RATE, LOW BASE YOUTH UNEMPLOYMENT EFFECT ON GOVERNANCE AND LOCAL POLITICS 79

80 UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION LOW STARTING BASE NATURAL RESOURCES GROWTH POTENTIAL ESP IN AGRICULTURE, AND AGRO INDUSTRY TOURISM DOWNSIDE RISING INEQUALITY SMALL MIDDLE CLASS LOW SAVINGS POOR INFRASTRUCTURE SKILLS DEFICIT EXTERNAL DEMAND GROWTH COALITIONS, POLICY PREDICTABILITY & POLITICAL POPULISM RISING UNIT COSTS ELSEWHERE END OF DEBT CRISIS INCREASED OPENNESS YOUTH ENERGY CHINA S INTEREST LAND TRADABILITY LOW FDI HIGH TAX RATE, LOW BASE YOUTH UNEMPLOYMENT EFFECT ON GOVERNANCE AND LOCAL POLITICS 80

81 Some things worth thinking about for next 15 years: Widening i differentiation 800m 1.5 billion 25% world s youth Urban continent 50+ cities with 1m+ Average age 25; Europe 45+. Improving connectivity. Megacities: Lagos, Cairo, Accra, Jo burg, Khartoum, Kinshasa, Nairobi. 6% great; why not 10+%? 81

82 Three Liberations 50 Years Ago, from the colonial powers 82

83 Three Liberations 50 Years Ago, from the colonial powers Then.. From the liberation leaders and movements themselves.. 83

84 Three Liberations 50 Years Ago, from the colonial powers Then.. From the liberation Mugabeleaders and movements themselves ANC, Frelimo,.. MPLA, etc 84

85 Three Liberations 50 Years Ago, from the colonial powers Then.. From the liberation leaders and movements themselves. Now, from a political economy still (increasingly?) characterised by graft, crony capitalism, capitalism elitism, and widening (and destabilising) inequality. 85

86 Thank you very much 86