THE BRENTHURST FOUNDATION. African Futures and Drivers More Important or More Impoverished? Greg Mills

THE BRENTHURST FOUNDATION African Futures and Drivers More Important or More Impoverished? Greg Mills

Point of Departure Six Drivers for the Future.

Point of Departure Six Drivers.

Six Drivers People. Growth and Differentiation. Democracy and Conflict. Resources. Food. Competitiveness and Technology.

DRIVER ONE: People

(Billions) SSA Population: 1950-2050 2 1.5 1 1.4 Billion in 2025 0.5 0 1950 1975 2000 2025 2050 Source: United Nations 6

Some facts worth pondering - Sub-Saharan Africa currently has approximately 949 million people (13% global population). That figure is projected to grow to 1.07 billion in 2020 (14%) to 1.5 billion in 2035 (18%). - The primary reason for growth is African women, on average, have 5.2 children over their lifetimes compared to a global rate of 2.5. - By 2050, Nigeria will surpass both the US and Indonesia in population, placing it third behind India and China, the global giants.

350000 Evolution of Africa's Population Giants (thousands of people) 300000 250000 200000 150000 DRCongo Ethiopia Tanzania S. Africa Nigeria 100000 50000 0 2000 2005 2010 2015 2020 2025 2030 2035

Population by Age Group 100+ 90-94 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 1980 2020 Male Female 1.0 0.5 0.0 0.5 1.0 (in Billions) Source: United Nations 9

Population by Age Group 100+ 90-94 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 Male 1980 2020 From 25% in 2025, close to half of the world population of children will be African by the end of the 21st century. Young people are the ones most likely to be early adopters of technology and to lead new social movements. Female 1.0 0.5 0.0 0.5 1.0 (in Billions) Source: United Nations 10

Relative underpopulation: There are 27 Africans/km 2. Global average of 45.21km 2, Central America at 80 km 2 or the Asian average of 119km 2

But it s also about where they will be living

Billiions The Urbanization Phenomenon 2 70 60 1.5 50 1 40 30 0.5 20 10 0 0 1950 1975 2000 2025 2050 Total Population % Urban Source: United Nations 14

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 700 African Per Capita Income, Constant (2000) US$ 600 500 400 300 200 100 0

1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 700 African Per Capita Income, Constant (2000) US$ 600 500 400 300 200 100 0

US$ 14000 GDP Per Capita (Constant US$) 12000 10000 8000 6000 SE Asia Sub-Saharan Africa 4000 2000 0 60's 70's 80's 90's 00's

Constant Per Capita 2000 USD Where It Went Wrong 1200 1000 800 600 400 Indonesia Nigeria 200 Start of Indonesia's sustained growth 1967 0 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION DOWNSIDE RISING INEQUALITY SMALL MIDDLE-CLASS LOW SAVINGS POOR INFRASTRUCTURE 19

UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION DOWNSIDE RISING INEQUALITY SMALL MIDDLE-CLASS LOW SAVINGS POOR INFRASTRUCTURE 25

UPSIDE PEACE DIVIDEND BETTER GOVERNANCE POVERTY DOWN DIFFERENTIATION DOWNSIDE RISING INEQUALITY SMALL MIDDLE-CLASS LOW SAVINGS POOR INFRASTRUCTURE - At 68 GW, entire electricity production of SSA = Spain; without SA = 28GW = Argentina. 26

27

By 2025 there will be 300 million people younger than 24 years in African cities a most potent political and cultural force on the continent.

By 2025 there will be 300 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 Need to plan and to manage better.

By 2025 there will be 300 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 Need to plan and to manage better.

Yet His/her generation has an improved chance of breaking out of poverty

The demographic dividend

The demographic dividend - By 2050 Africa s population of 2bn will be greater than India (1.6bn then) and China (1.4bn). - 1 in 5 people and 1:4 workers will be African. - African median age is 18.4 years rising to 21 in 2035. In contrast, the world s median age will go from 29.6 to 36.1.

DRIVER TWO: Growth & Differentiation

Much has been achieved - 40+ democracies - Range of donors and allies - Governance improved - Growth Growth over 5% matters - More honest inward scrutiny - Commodities revival

Much has been achieved - 40+ democracies - Range of donors and allies - Governance improved But Differentiated - Growth over 5% Africa s Growth big countries matters are - More especially honest slow inward movers scrutiny - Commodities revival

% GDP growth (constant prices) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 South African Example 6 5 4 3 2 3.23 3.12 4.31 2.65 GDP growth rates 4.15 3.67 2.95 2.74 2.36 5.28 4.55 5.60 5.55 3.62 3.09 3.46 2.55 2.84 1 0 0.52-1 -2-1.53

% GDP growth (constant prices) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 South African Example 6 5 4 3 2 1 0-1 3.23 3.12 4.31 2.65 0.52 GDP growth rates Impact of Differentiation 5.60 Period since 1990 has resulted in some 5.55 countries that not only have done much 5.28 better 4.15 than others 3.67 4.55 but also are now asking fundamentally different questions. 3.62 For example: Agenda of Ghana (deepen 3.09 3.46 democracy, 2.95 2.74 accelerate economic growth) 2.36 2.55 2.84 is v different from that of the Congo (end violence, reassert control of territory). In the future, divergent agendas of African countries will become an increasingly important theme. -2-1.53

DRIVER THREE: Democracy & Conflict

If countries do not have political systems where citizens can make at least some demands on the government, economic reform tends to occur at a very slow pace.

The potential for social destabilisation exists

Growth (%) Labor Force Participation Rate GDP Growth and Employment Trends Despite the best growth decade on record, labour participation rates remained largely flat 7 6 5 4 3 2 1 0-1 75 70 65 60 55 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 50 GDP Growth GDP Per Capita Growth Labor Participation Rate (ALL) Labor Participation Rate (YOUTH) Source: World Bank and International Labour Organisation 55

% Vulnerable Employment Both Sexes GDP Growth and Employment Trends 90 Vulnerable Employment by Region 80 70 60 50 40 30 20 Developed Economies inc EU Europe Non-EU and CIS East Asia South-East Asia & Pacific South Asia Latin America & caribbean Middle East North Africa Sub-Saharan Africa World 10 0 1998 1999 2000 2005 2006 2007 2008 2009 56

0.43 0.46 0.42 0.5 0.47 0.5 0.55 0.53 0.54 0.61 0.62 0.61 0.67 0.67 0.7 SA increasing wealth divides Per capita income Gini coefficient 0.8 0.7 0.6 0.5 0.4 0.3 1993 2000 2008 0.2 0.1 0 National Black African Coloured Indian White

Lagos: Africa s most populous city (surpassing even Cairo, the previous leader). In 1970, it probably had around 1.4 million; 5 million in 1991; today estimated 25 million, in 2030 an unimaginable 50 million. Lagos generates a quarter of Nigeria's total gross domestic product; many millionaires; yet two thirds of the population are slum dwellers. Given urban dwellers can physically threaten the state more directly than rural peasants, urbanisation (plus tech) could assist in mobilising mass movements, largely absent in Africa s post-independence history.

Fragile State Index ( 1 is the most fragile country in the world) Rank Country Rank Country Rank Country 1 Fragile State Index ( 1 is the most fragile country in the world) South Sudan 9 Haiti 17 Nigeria Rank Country Rank Country Rank Country 2 1 Somalia South Sudan 10 9 Haiti Pakistan 17 18 Nigeria Kenya 3 2 CAR Somalia 10 11 Pakistan Zimbabwe 18 19 Kenya Ethiopia 3 CAR 11 Zimbabwe 19 Ethiopia 4 DRC 4 DRC 12 12 Guinea Guinea 19 19 Niger Niger 5 5 Sudan Sudan 13 13 Iraq Iraq 21 21 Burundi Burundi 6 Chad 14 Côte d'ivoire 22 Uganda 6 7 Chad Afghanistan 1415 Syria Côte d'ivoire 23 22 Eritrea Uganda 7 8 Yemen 16 G. Bissau 24 Myanmar Afghanistan 15 Syria 23 Eritrea 24 Liberia 8 Yemen 16 G. Bissau 24 Myanmar 25 Liberia

DRIVER FOUR: Resources

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

AFRICAN COMMODITIES BOOM

Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 African Exports Track Commodity Prices 700 600 500 400 300 200 100 0 0 Africa total exports (USD milion) Commodity prices (CRB, 1967=100, Right scale))

Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 50000 45000 40000 35000 30000 25000 20000 African Exports Track Commodity Prices 700 600 500 400 300 15000 10000 5000 0 70+% African exports 100 still oil & other minerals 0 Vulnerable to price swings 200 Africa total exports (USD milion) Commodity prices (CRB, 1967=100, Right scale))

DRIVER FIVE: Food

This is how most have to cope

A hungry man is an angry man. Raila Odinga

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 Uganda Djibouti Mauritius Zambia Equatorial Guinea Mozambique Zimbabwe Eritrea Namibia

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 Uganda Djibouti Mauritius Zambia Equatorial Guinea Mozambique Zimbabwe Eritrea Namibia

5000 Cereal Yields (Kg/Ha) in Developing Countries 4500 East Asia & Pacific 4000 3500 3000 Latin America & Caribbean 2500 2000 South Asia Middle East & North Africa 1500 1000 500 0 1961 2005

5000 Cereal Yields (Kg/Ha) in Developing Countries 4500 East Asia & Pacific 4000 3500 3000 Latin America & Caribbean 2500 2000 South Asia Middle East & North Africa 1500 1000 Sub - Saharan Africa 500 0 1961 2005

5000 Cereal Yields (Kg/Ha) in Developing Countries 4500 East Asia & Pacific 4000 3500 3000 Latin America & Caribbean 2500 2000 South Asia Middle East & North Africa 1500 1000 500 0 1961 2005 Just 20% of Sub Africa s - Saharan Africa 400m ha arable land currently cultivated

5000 Cereal Yields (Kg/Ha) in Developing Countries 4500 East Asia & Pacific 4000 3500 3000 Latin America & Caribbean 2500 2000 1500 1000 500 0 South Asia Middle East & North Africa - Basic extension significant hurdle; but land tenure greater one. Sub - Saharan Africa - Much land not under state or chiefs loss 1961 2005 Just 20% of Africa s 400m ha arable land currently cultivated of collateral value. - Compounded by bureaucracy, and licensing mindset.

DRIVER SIX: Competitiveness, Skills & Technology

2000-2011: African internet usage in Africa grew 2,500%; global growth rate ten times less. In Nigeria, internet users went from 200,000 to 44 million during this time. Kenya s M-Pesa service 14 million users in 5 years, moving 20% of value of GDP. The region's mobile users are forecast to reach 346 million by 2017, second biggest growth region after Asia.

Result: Africans, natural connectors, will increasingly have their lives shaped by global and regional information and financial exchange

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 Premium on skills

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 Premium on skills

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

% 140 Gross primary enrollment 120 100 80 60 40 East Asia & Pacific Latin America and Caribbean Middle East and North Africa South Asia Sub-Saharan Africa 20 0 1970 1975 1980 1985 1990 1995 2000 2005

120 100 80 60 40 20 Net Enrollment Rate Minimum Mastery 0

Six Things to Expect in the Future 1. Urbanization, and population growth, present significant opportunities and some real challenges for African countries. 2. Just to maintain the current (high) level of unemployment, most African countries will have to increase the number of jobs by 50% to accommodate the youth surge. 3. Yet there could be tremendous benefits from the unprecedented African youth dividend. 4. Failing this, many young people will be available to be mobilized by those seeking to upset regimes by constitutional or violent means: an African (Arab) Spring. 5. Likelihood of future violence in the future depends on the weakness of central governments, their vulnerability to failure, and their ability to suppress internal, violent rivals. 6. Finally, there are powerful economic, political and social ramifications of internet-related technologies, especially mobile devices.

But more important or more impoverished? 94

Depends largely on what Africans do. 95

Thank you very much 96