Africa is fast catching up with the world
Despite Africa’s exciting growth prospects – now boasting the fastest growth of any region in the world, even outpacing greater Asia – 2014 presented a new reality check in the “rising Africa” narrative.
Between the crippling Ebola epidemic, attacks on civilians in East and West Africa, and concerns around political stability amid key elections and social unrest, this has been a challenging year for the continent.
Africa’s biggest story this year was the Ebola crisis. Apart from taking more than 6 000 lives, Ebola squarely challenged the depth of progress in various countries, devastating the West African economies of Liberia, Sierra Leone and Guinea, while affecting countries as far afield as Kenya and South Africa by association. West African economies are expected to lose more than $2-billion of income as a direct result of the epidemic’s impact on business, tourism and overall productivity.
Ebola has exposed deep-set weaknesses inherent in the African context, which most observers hoped had been addressed during the recent boom years. Yet, despite high growth rates and positive developments, many African countries continue to be plagued by weak institutions, widespread policy paralysis and high levels of dependency – a combination that is deeply concerning during times of crisis. The poor state of health services and education in Liberia, Guinea and Sierra Leone have been laid bare – not to mention reaction times – and fuelled the fast spread of the disease.
Terror attacks continued to undermine progress and taint perceptions of Africa throughout 2014. Boko Haram in northeast Nigeria stepped up activities with a multitude of bombings, attacks, assassinations and kidnappings. The group gained global attention following the abduction of more than 200 schoolgirls in April, when even United States President Barack Obama and his wife Michelle joined the “bring back our girls” campaign. The girls have still not been found, a reminder of the severe weakening of the Nigerian state in remote parts of that country.
Al-Shabab continues to wreak havoc across East Africa. The group responsible for the Westgate bombing in Nairobi in September 2013 continued to strike at random targets throughout 2014, resulting in one of the worst years in Kenyan tourism history.
In September 2014, nearly a year after the Westgate attack, a US drone strike killed the group’s leader – Moktar Ali Zubeyr. His death might lead to al-Shabab’s fragmentation and eventual demise, but this will take time.
Two recent attacks near the Somali border, the first claiming the lives of 28 Kenyans and the second a further 36 lives, suggest al-Shabab is still a long way away from collapse. Sectarian violence ravaged parts of the continent. In the Central African Republic (CAR), the rift between Christians and Muslims has plunged the country into chaos. Instability broke out when the largely Muslim Séléka rebels captured power in the majority Christian country, deposing President François Bozizé. Abuses by Séléka rulers ignited a backlash from the mostly Christian Anti-Balaka militia. Despite the presence of peacekeeping forces, the CAR continues to be dogged by sporadic clashes between the two groups.
Social unrest in Burkina Faso late in the year has left the country with an uncertain political future. Days of mass protests, which some observers described as sub-Saharan Africa’s version of the Arab Spring, brought down the 27-year reign of President Blaise Campoaré. The protests were initially triggered by Campoaré‘s attempt to extend presidential term limits. The country is being led by interim president Michel Kafando, and it is yet to be seen whether the elections set for next year will be a success.
Apart from Ebola, violence and the sociopolitical instability gripping the continent, the big economic story of 2014 was undoubtedly the rebasing of the Nigerian economy. Nigeria leapfrogged South Africa to become Africa’s largest economy.
With a gap of over $120-billion between the South African economy ($385-billion) and the Nigerian economy ($510-billion) the scale and differences between individual African economies became more obvious and differentiated among business practitioners seeking access to and forging strategies in African markets.
As 2014 comes to a close, although the optimists may be less bullish in the light of relentless challenges to health and security, and the pessimists a little less gloomy with growth rates still well above the global average, the debate around “emerging” Africa has become more measured and up to speed with the rest of the developing world.
We now discuss issues common to other dynamic market regions: the growing middle class, rising inequality despite 15 years of growth, and the role of the state or, more importantly, the business of development as firms become a more integral part of the development solution across the continent.
Over the past decade the debate has shifted from a simplistic “more aid versus less aid” to the complexity of changing structures, new markets and addressing the data deficit for better investment decisions and policy choices. As we enter 2015, one thing is certain: Africa is definitely catching up – fast.
Dr Lyal White is the director of the Centre for Dynamic Markets (CDM) at the Gordon Institute for Business Science and Liezl Rees and Adrian Kitimbo are CDM team members.