Emerging Economic Development in Africa
Cultural Values and Untapped Resources Promote African Development
The U.S. has a moral imperative in Africa. That was the subject of a previous blog (http://bit.ly/fWcYTQ.) Today I look at emerging economic development in once was a forgotten-continent. The drivers of increased economic development include: (1) untapped resources and the desire of China to feeds its appetite while, at the same time, engaging in joint projects to build infrastructure and foster economic and political ties; (2) a global demand for African resources from more advanced emerging economies including India and Brazil; (3) stronger U.S.-African economic and political ties since the election of President Obama; (4) advancing educational programs, some based on linkages with foreign universities and others prompted by the increased desire to improve the educational experience of all Africans; and (5) the desire to join the global community of advanced economies and improve living standards for the African people.
Economic development in South Africa since its turn toward democracy in 1994 has been an engine for change. South Africa is the leader of Africa’s emerging economic growth, leading the continent in industrial output and mineral production and generating a large proportion of Africa's electricity. The country has abundant natural resources and a modern infrastructure supporting efficient distribution of goods throughout the southern African region. The Johannesburg Stock Exchange now has more than 400 company listings and a market capitalization of more than $182 billion. The stock market’s size and capitalization make it the largest exchange on the continent and places it in the top ten largest exchanges in the world. This is a critical factor for foreign multinationals that seek investment capital to develop joint projects in Africa of mutual benefit.
Until the global economic crisis hit South Africa in late 2008, economic growth had been steady and unprecedented. According to Statistics South Africa, GDP rose by 2.7% in 2001, 3.7% in 2002, 3.1% in 2003, 4.9% in 2004, 5% in 2005, 5.4% in 2006, 5.1% in 2007 and 3.1% in 2008. South Africa has a diversified economy, better fiscal and trade balances, and improved governance, all of which should help to maintain a positive growth trend. The country’s availability of globally-demanded commodities bodes well for the economic future of the continent.
Other signs that the economic future of Africa is bright include the independence of the Republic of Southern Sudan that broke away from the north after a January 2011 landmark referendum poll where more than 98 percent of votes cast supported independence from the north. The new Republic is looking to the economic reconstruction in Rwanda after years of horrific conflict as a model for growth. Sub-Saharan African countries including Ghana, Côte d'Ivoire and Angola are experiencing economic growth and development.
Not all is well in Africa. The per capita income is among the lowest in the world with the exception of South Africa. The historically more advanced countries of northern Africa including Egypt, Libya and Tunisia are dealing with political strife that will take them into unchartered and potentially dangerous waters. Years of war and ethnic conflict hamper growth in countries such as The Republic of Congo and make for a risky place to do business. A fractionalized society, widening gap between rich and poor, endemic poverty, and inefficient, corrupt government all mitigate against developing the level of trust needed by economic partners to feel secure that Africa is the place to be in the next decade.
However, Africa offers much to the world and for those companies willing to take the risk. Its culture is marked by shared values including hospitality, friendliness, patience, and a consensus, group dynamic that views individual development within the larger context of community. This is quite different from the culture in the U.S. that emphasizes individual freedom above all else but can lead to disastrous results such as the pursuit of self-interest mentality that led to the economic crisis of 2008. Perhaps we have much to learn from communitarianism.
Kenyan theology professor John S. Mbiti believes that the individual has little latitude for self- determination outside the context of the traditional African family and community. He writes: "Whatever happens to the individual happens to the whole group, and whatever happens to the whole group happens to the individual. The individual can only say: 'I am, because we are; and since we are, therefore I am.' This is a cardinal point in the understanding of the African view of man."
Blog by Steven Mintz, aka Ethics Sage, May 12, 2011