What happened and why? Behind the growth figures.

Nairobi

Thursday May 19

What caused the dramatic improvements in Africa’s development perspectives during the first decade of this century?

Let me first make of few sobering comments on the figures. In a few cases it is quite clear that the reason for the rapid growth is the rock bottom level at the start of the climb: During the conflicts all development indicators, including GDP, plummet and when conflicts recede the first years will often witness rapid growth, albeit from a very low level. Rwanda and Chad could illustrate this factor on the list. High prices on raw material, such as oil, are another explanation, illustrated by Angola and Nigeria. But there is little wrong per se in benefitting from your natural resources; the important thing is how you do it and how you handle the proceeds.

The quality of the growth is another week point, it has often reached the urban middle class and elite, but not beyond that.

But nevertheless: Sustained high growth means change, or hope of change, for millions of people.

So what has caused this quite dramatic shift in Africa? Four reasons:

1. Peace - at least fewer conflicts. We are not sure if poverty or abundance leads to conflicts, it varies. But we know abundantly clear that conflicts lead to poverty. Number of conflicts has decreased. Most of them are internal such as in southern Sudan although many of them have repercussions across borders (LRA). A few have government as part, as Darfur. Even less is between states, such as Ethiopia versus Eritrea. It is a token of new roles and renewed confidence in the region that AU and African leaders want to play a more active role Kofi Annan played in Kenya, is an illustration.

2. Democracy – at least participation. Looking 15 years back, Africa has had a faster growth of democracy than any other continent. Linked to conflicts of course: We do believe that participatory politics are the best way to handle conflicts, not always solve, but manage. In Kenya, it did not solve or manage well, but it was actually democracy itself that was hijacked.

3. Domestic policies- at least macro economy-are more in order. Structural Adjustment Programs of the 80s did at least one good thing; it made everybody realize the importance of a budget in order. Debts, inflation and rates are down. And those who suffered from high inflation were the poor. They are also hit by poor policies in justice or business; insecurity, lawlessness, corruption. Those who enjoy impunity are the rich. Why hire a lawyer if you can buy a judge?

4. High prices on raw material.

To be continued……but then for a look in the crystal ball, not the rear mirror.