Birth control or better development policies?

It seems that time has come to debate the demography of Africa. Reports, experts and politicians have been concerned for some time on the subject, which is sensitive in most developing countries, of the rapidly growing population and sometimes even dealing with the idea of birth control. Some are referring to some ancient theories, like Malthus’, and, not without a certain logic, compare the rate of population growth with the rate of growth of the economy. Others are witnessing in the demographic growth a sign of liveliness and future wealth for our countries.

Let us first look at the figures: the latest report by the UN Department of Economic and Social Affairs (DESA), “World Population Prospects, the 2017 revision”, indicates that Africa will have nearly 4.5 billion inhabitants by 2100, 40% of humanity compared to 1.3 billion today (17% of the total population). Africa will have a population comparable to that of Asia (Asia should see its population stabilize at 4.8 billion, whereas it is 4.5 billion today – 60% of the world population). The global population should then be 11.2 billion inhabitants compared with 7.5 today.

By 2030, Nigeria is supposed to account for 410 million inhabitants, more than the United States. The UN report adds an interesting point: most of the world’s population growth should be concentrated in only nine countries, most of them in Africa: Nigeria, the Democratic Republic of Congo, Ethiopia, Tanzania and Uganda. Currently, the African population is growing by 2.5% against 1.7 at the world level.

Population growth is due to several factors: the fertility rate (5.5 in 2006 vs. 5.0 in 2016) is very high – with Niger’s extreme example of 7.4 children per woman of reproductive age – but also the increase in life expectancy which has gained 20 years in Africa since 1950 and is now 57 years old. One point to remember also: population density in Africa is one of the lowest in the world.

Of course, one can’t be as specific about the rates of economic growth. But the optimistic projections indicate for the coming years a growth of 4 to 6 points per year in Africa. A figure envied by most other regions of the world. We have already said how much these growth rates did not take into account the whole economic reality of our countries, the informal sector in particular, and that they were often distorted in one way or another. Faced with this situation, which party to choose? Should we even choose a camp? Is it possible? At a time when China has reversed its enforced policy of birth control, Africa must in turn try to limit births by constraint, while studies show the desired number of children per woman in Africa Sub-Saharan Africa is greater than five?

Children are still seen in Africa as a source of wealth and an economic and social safety net: manpower for farming and other works, but also pension insurance in countries that do not have any system of the sort. These are all factors that must be taken into account and which make it impossible for us to adopt binding policies. Besides, no one reckons that China has been handicapped in its economic development by its strong demographic and its 1.3 billion inhabitants.

On the other hand, making women’s health and education a priority, fostering access to modern means of contraception while creating the conditions for the real emancipation of women and girls so that they can choose to or not undergo their pregnancies, that could lead to lower fertility rates.

The Africa we want cannot happen without African women

As we talk more and more about the second liberation of Africa and economic liberation, one cannot avoid thinking also of Africans who represent more than half of the continent’s population: Women. Should we also consider this question in terms of a new liberation, an emancipation? Would not it be more constructive to look at the situation of the 410 million African women today, and then to see how to help them more?

Recently, I was struck by a figure – according to UNICEF, if all girls in Africa went to primary school, maternal mortality would be reduced by 70 percent. That would be 50,000 lives saved each year. What would be the implications of this with regards curbing of sexually transmitted diseases, or improving children’s daily diet? The prospect is mind blowing.

Access to education for girls, which varies greatly from country to country, remains a priority. We need to identify weak links and bottlenecks in order to ensure access to education for girls and young women. More than a bet on the future, it is an economic and political necessity. That is particularly true when we take into account that about 28 million girls and teenagers, who are of school age, will probably never go to school for even a single day in their lives…

The issue is also economic because women represent half of our continent’s human resources. In agriculture, 40 percent of agricultural work is carried out by women, but yet they produce 80 percent of food in households. It should also be pointed out that unemployment affects them more than men: 10.6 percent of women are unemployed, compared with 8.2 percent men, according to the World Bank.

In Africa too, disparities are significant, for instance in Uganda, Tanzania and Malawi, where the number of women in the fields exceeds 50 percent. In Ethiopia and Niger, on the other hand, they account for only 29 percent and 24 percent respectively of the overall workforce. According to FAO, “Enabling women to participate more effectively in agricultural activities means reducing the number of people suffering from hunger and malnutrition in all its forms. It also improves the well-being of children and families, which contributes to training human capital for future generations and long-term economic growth.”

On the other hand, thanks to quotas such as those in Burkina Faso and Rwanda, the representation of women in parliament has increased significantly. In sub-Saharan Africa, women’s representation was 22.3 percent in 2015, compared to only 8 per cent in 1995. At the global level, the figure is 22.1 percent. This is a big step forward for Africa.

However, much remains to be done. Equality is not yet a reality despite the progress made. Violence against women, genital mutilation and forced marriages remain a reality. As the UN stresses, “Despite the adoption of innumerable international conventions and protocols that reaffirm gender equality, discrimination and prejudice hold back the emancipation of African women. In virtually every sector of activity, women on the continent are still struggling to gain recognition of their right to live in dignity.” This at a time when we are talking about the necessity to reduce births in Africa. How do we do it without involving women?

Initiatives exist to highlight and promote the role of women in this new phase of our history. The Women Advancing Africa Forum, organised by Mrs Graça Machel in Tanzania this summer, aims to celebrate the central role of women in shaping African development and their capacity to lead social and economic change. The aim is to ensure that women on the one hand are emancipated and participate directly, but also to ensure they are recognised, in the development of Africa, in making positive strides towards “The Africa We Want.”

Invest strategically in higher education

The demographic development of Africa poses major infrastructure and equipment problems for our States. This is particularly true for the Education sector. Since nature loathes the void, where states do not or can not accept hundreds of thousands, even millions of students of the superior, non-state institutions are set up.

This is true of the growing number of Christian universities or Koranic schools that are more concerned with primary education. For our States, education of the youth must of course be a priority, but the means, despite a generally strong economic growth, are often lacking. Yet, education is one of the primary human rights. The UN’s Sustainable Development Goal 4 aims to ensure “access to quality education for all, equality of access, and promoting opportunities for lifelong learning ‘. The increase in enrollment is an undeniable success, especially for girls too often excluded from school. But this also poses a problem for higher education, which is struggling to welcome those who wish to go further in studying. They are too rare, but yet African national universities can not meet the demand. Hence the gap we were talking about earlier.

In the 1950s there were only 41 higher education institutions in Africa with 16,500 students. In 2010, 5.2 million students are enrolled in 668 universities in sub-Saharan Africa, more than a doubling since 2000. Faced with this tidal wave, it is understandable that states are struggling to keep afloat University institutions worthy of the name, capable of accommodating the students in comfortable conditions, and to provide them with a diverse and quality teaching, adapted also and especially to the national future needs of human resources.

Because Education is part of a whole and normally participates in the deployment of a long-term strategy of developing countries by setting up training axes. For example, West Africa today lacks skilled labor for the mining industry or mining engineers, while the region is experiencing an unprecedented mining boom. International mining companies are therefore obliged to call on expatriates for a number of fields of competence, and sometimes at best, they train their West African colleagues to replace them. But the ideal would be to have training institutes, mining schools, for example at the regional level (ECOWAS), which would train young people in these trades which enjoys more and more jobs opportunities.

The reality nowadays is that private institutions, often linked to religious obediences, respond in the place of the State to the needs of higher education. On the other side of the spectrum, this situation of academic indigence also pushes some of the best elements to go abroad, often in the West but also and more and more in some Arab countries, to study. This is part of the brain drain and skill deficit. The example of doctors is probably the most illustrative. This is also true of university professors, who are often discouraged by the lack of resources, recognition, public investment and adequate infrastructure to accommodate ever more students. African governments have therefore allowed the development of private universities, which are predominantly Christian.

In Ghana, for example, there were only two private universities in 1999, now 28. Nigeria has authorized 61 private institutions since 1999, of which 31 are Christian. This situation raises, of course, the question of State control over higher education both in terms of the content of teaching and the integration of education into a traditional republican culture independent of religious denominations. Not to mention the possibility that education is being held hostage to a political struggle that has nothing to do with the country where the private university is located, as was the case recently in East Africa.

With regard to education, the African Union (AU) Agenda 2063 provides that at least 70% of all African high school students have access to higher education, which represents an eight-fold increase in the current rate registration.

To achieve these objectives, our states will therefore have to invest more in education, in partnership with the private sector, increase standardization of programs and controls of private institutions and define clear training strategies in line with their developmental needs.

The combination of private and public strengths will allow Africa to reach true rural growth

Africa recently experienced an unusually long spell of steady growth. Sadly, it is a well-known fact that our economies failed to ensure the equitable sharing of the benefits of one of the highest growth rate in the world. So we are today in a specific context of a general decline in commodity prices and a consecutive slowdown in growth in Africa. This downward trend in commodity prices may be a constraint, but I would also like to see it as an opportunity because both public and private stakeholders will have to be more innovative in order to unlock new sources of endogenous growth, wealth and inclusive employment with greater spill over effects for the region’s economies.

Addressing the challenge of employment and wealth in the rural world is crucial for Africa’s development. The situation is highly paradoxical: Africa imports the equivalent of USD 50 billion in food each year, even though more than half of the world’s uncultivated arable land is on the continent and 60% of the population still lives in the rural world! The development of this agricultural potential, at a high productivity and competitiveness level, is essential if Africa is to feed 2.5 billion people by 2050.

Today, the challenge is to identify new tools for sustainable economic growth, this time based on principles of inclusion and equity, while maintaining a steady growth rate. Meeting these conditions will enable African economies to cope with a population that is still booming and with the ever-growing number of young people looking for education, training and jobs. These challenges are set against a backdrop of climate change and resource depletion, calling for the use of production techniques that are tailored to environmental challenges.

The principles of inclusion and equity imply adopting spatial and territorial approaches and policies that ensure rural areas benefit from the same developments and initiatives as urban areas; that responsible investments are made in rural areas; and that women and young people have access to the factors of production, especially training, land, water, finance, renewable energy, markets and income that reflects the fruits of their labour.

There are promising signs that private sector money is finding its way towards more inclusive development models. Conservation finance is one of the most exciting corners of agriculture development in emerging countries today. Conservation finance strives to reach three major and complementary goals to finance the agro-ecologic transition by calculating three different kinds of returns: economic, environmental and social.

These new investment projects are based on limited land acquisition and partnerships with farmers networks that are empowered with new techniques. The new actors take care of their production and of its transformation and ensure an access to the market, whether locally or internationally. Private investment in agroforestry businesses is a big driver for the intensification of farmer’s activities while restoring degraded lands, protecting forests and raising farmers’ incomes.

The African public sector should invest more money in incubators and accelerators to channel funding and technical support at the beginning of the cycle of these projects. This investment will pay off because the incubators could create a network of agroforestry start-ups with the infrastructure, knowledge and access to the funding needed to realize their concept. The consequences in terms of employment and resource developent could be tremedous. In this regard, the support of international governments and donors will also be essential. The progressive transition from solidarity systems to mixed market systems will help to stimulate investment and the development of structural activities capable of laying the foundations for this much-needed change.

Renewing public policies on the basis of local development would also help to tackle the root causes by providing appropriate solutions to ensure people settle and remain in their areas of origin. The empowerment of local authorities should be based on their specific characteristics, their ecosystems, their cultural heritage and their know-how combined with technological innovation and learning, especially for young people and women.

The governance of our natural resources and the financial resources they generate are the cornerstone of our structural change; they require appropriate solutions at the continental, regional, national and local levels, the most critical ones being the regional and local levels. Change will be sustainable when it happens at these two levels.

G20 Compact with Africa and the Position of Youths

It was a great pleasure to be interviewed on CNBC Africa about the G20. Thanks to the team, thank you Onyi Sunday.

The G20 Compact with Africa is an initiative that aims to promote private investment and investment in infrastructure. African countries will determine what they want to do to improve conditions for private investment, with whom they want to cooperate, and in what form. This is against the backdrop of a continent whose median age is only 19 years.  What does all this mean?

View the full video here

Rencontres Économiques d’Aix-en-Provence

I thank the "Rencontres Économiques d'Aix-en-Provence" for inviting me to this new edition. Exceptional guests and exciting debate. The video of my speech during the round table: From a world of inequalities to a world of solidarity - coordinated by Pierre Jacquet, member of the Cercle des économistes, and moderated by Béatrice Mathieu, Deputy editor of L'Express, with Jacques Attali, President of Positive Planet, Pierre-André Chalendar, President and CEO of Saint-Gobain, Esther Duflo, Professor at the Massachusetts Institute of Technology and Geoffrey Lamb, Senior Advisor of the Bill & Merinda Gates Foundation, Is available by clicking here.

Leapfrogging Progress

I am sharing an excellent article from my friend Calestous Juma on leapfrogging progress via The Breakthrough website:

ithin two years of its launch in 2007, money transfers through M-Pesa, a cell-phone-based mobile banking application, already equaled the equivalent of 10 percent of Kenya’s GDP. What started as a local system to serve populations too poor for traditional banking has since grown into a global industry, one that threatens to disrupt traditional banking systems around the world. Today, M-Pesa’s network includes 30 million users across 10 countries, and its services have expanded to include international transfers, loans, and even health care.1

Image credit: CNN, “M-Pesa: Kenya’s mobile money success story turns 10” (2017), http://www.cnn.com/2017/02/21/africa/mpesa-10th-anniversary/.

The wide adoption of mobile phones in Africa, along with applications like M-Pesa that it has enabled, has created remarkable technological enthusiasm on the continent. Symbolizing the great potential that lies in technological catch-up and leapfrogging, M-Pesa has served as an inspirational example of what Africa could accomplish in other sectors like energy, education, health, transportation, and agriculture. Indeed, countries such as Rwanda are already using drones to transport medical supplies, while the dramatic drop in the cost of solar energy points to the widespread adoption of the technology across Africa.

Full article here

Why the solutions to global challenges are found at the pan-African level

At a time when more and more voices are being heard to challenge the European Union (EU), the idea of ​​unity of the Old Continent and especially the functioning of its institutions, the African Union (AU) has just accepted a new member: Morocco.

This demonstrates the attractiveness of the continental organization, which, although not perfect, has to its credit many achievements that are conducive to stability and development. It must be said that the AU was able to renew itself. From the OAU of independence to the AU that we know today – in fact largely inspired by the EU – there has been a real qualitative leap we must welcome.

Today the AU is an essential interlocutor for the international community. Africa is able to speak with one voice in the major international arenas, whether on climate or trade. Unity is strength, as the saying goes. But union, especially when it goes beyond the mere economic framework, is not easy: one sees it in other parts of the world, in the Middle East for example, but also in North America where deep divisions have been growing.

In Africa, on the contrary, the continental unity is now strengthened. It is interesting to note that even when countries are divided, at no time do the new entities envisage leaving the AU. I’m thinking here about the latest example to date, South Sudan. Morocco has clearly understood this, which is back in the ideological lap of the founding fathers of Africa, who, after independence, wanted this African unity because they dreamed of a community of destiny and interests.

Already with NEPAD, or with the African Development Bank (AfDB), the vision of development, projects and commitments are continental. We have succeeded in producing an overall African project, where each country sees its interest and can hope to be part of the general effort. This is true for infrastructures – rail, electricity – but also for the social issue through Agenda 2063, which includes measures over 50 years to stimulate socio-economic transformation across the continent.

A key element of this transformation is to take full advantage of the “demographic dividend” to ensure that economic progress improves growth, social development and the sharing of wealth. This is also the case for health with the “African Health Strategy” and the “Catalytic Framework for the Elimination of AIDS, Tuberculosis and Malaria in Africa by 2030”, set up by the AU. There is still progress to be made, especially in integration, the free movement of people and goods, but in 15 years progress has been quite extraordinary.

With its values, ambitions and strengths – economic and demographic growth, important natural resources and dynamic youth – Africa today can face the challenges coming from a world in perpetual change by cultivating unity. In the UN, for example, our countries weigh more when they are united. And it is with this unity that we can also open ourselves to the rest of the world. The AU is our home, our safe haven. We can look at other geographical areas, such as the EU, for example, for Morocco and Tunisia, or as the BRICS for South Africa, but in the end we know where we come from. That is our strength. These extensions from Africa to the rest of the world via individual countries, or also via diaspora, is a key strength. It remains to ensure that there is a principle of “diplomatic sharing” or preferential access set up within pan-African bodies.

Our partners are already very active: for example, on the board committee of the AfDB, we find France, the United Kingdom, the United States, Japan and China, among others. These partner countries and friends of Africa therefore participate directly in the projects implemented by the continental bank. This facilitates action and makes the partnership more effective. Our inequalities can also be forces: if Moroccan and South African banks play their role as a capital distributor, this can benefit other countries and their respective private sectors.

Integrating the pan-African perspective into reflection can only benefit the actors in this immense market that has become Africa.

 

From Africa’s resource curse to Africa’s wealth

Nobel economist Jan Tinbergen has shown in his work the negative impacts that the exploitation of natural resources can have on the economics of a country, based on the example of the Netherlands with the extraction of natural gas in the 1960s. Since then, the “Dutch disease” theory has evolved to refer to the “resource curse”. Africa, a continent rich in raw materials of all kinds, obviously faces a challenge in terms of managing the rent derived from the exploitation of its resources.

The 2017 version of the Annual Report on Commodity Analytics and Dynamics in Africa (Arcadia)[1] deals with the evolution of the various linkages between Africa and world commodity markets, considering both economic and structural developments. Talking about commodities, just like talking about Africa in general, is a huge challenge in view of the heterogeneity that characterizes these two fields of study.

The report therefore focuses on raw materials “that matter” to African countries. These is the case obviously of iron ore and cobalt, present in the African subsoil, which have soared this year. US and China investment announcements in infrastructure led to an increase in iron ore prices (+ 70% this year) and bauxite (the source of aluminium). A country like Guinea, which accounts for nearly a quarter of the world’s bauxite reserves, is expected to benefit from unprocessed export bans in Indonesia and the Philippines to become the world’s largest exporter.

However, there are many examples of countries illustrating the danger of a national economy and state budget dependent on commodities, whose prices are essentially volatile. The downturn in cocoa prices has led to serious social and economic unrest in Côte d’Ivoire and Ghana, despite the good macroeconomic performances of both countries. Angola, South Africa and Nigeria, the continent’s main economic driving forces, were also hard hit by falling prices for oil, precious stones and metals.

Obviously, the various economic difficulties of these states cannot be explained only by the fall in commodity prices. Each country has an economic, fiscal and budgetary context explaining its level of GDP and growth. However, pan-African challenges persist across the continent: improving the attractiveness of mining activities, promoting electricity generation through renewable energy, strengthening food security by developing an efficient agricultural model and increasing the capacity of states and companies to raise funds.

The challenge of commodities is to make it a source of growth for the African continent. Local demand for commodities in response to growing African demand and capturing a greater share of added value is crucial. And for that, let us not forget a fundamental aspect: the rent derived from raw materials must be managed in the long term with structural policy instruments, without falling into the trap of short-term management exposed to the risk of cyclical reversals. Thus, we will definitely make commodities an asset for African economies.

[1] Arcadia 2017, « Annual Report on Commodity Analytics and Dynamics in Africa », edited Philippe CHALMIN et Yves JEGOUREL, publishing house ECONOMICA et OCP Policy Center 2017

Africa: an emerging destination for investments

One of the major audit firms recently published its index on the attractiveness of Africa for 2017[1]. The report puts into perspective the economic trend of the continent in a rigorous and detailed way, enabling us to avoid the two pitfalls of Afro-optimism or Afro-pessimism.

It should first be noted that 2016 has been the worst year in terms of economic growth for sub-Saharan Africa over the past 20 years. The continent has been hardly hit by the end of the super-cycle of commodities, particularly impacting Nigeria, Angola and South Africa. The geopolitical upheavals of the West such as the Brexit and the election of Donald Trump also contributed to diminishing or at least stagnating investments from these countries which are important investors in Africa. However, while the number of FDI projects fell by 12% in 2016, they increased by 32% in value terms (reaching $ 94.1 billion), making it the second region of FDI growth at world.

Obviously, Africa is not a homogeneous bloc and in fact there are great disparities between countries. The three major countries impacted by the drop in the commodity prices mentioned above should not distract us from the bigger picture that reveals the growing young shoots in French-speaking Africa as in East Africa. While Morocco, South Africa, Kenya, Egypt and Nigeria attract the bulk of FDI projects (57%), other investment hubs appear. Ghana (4th), Côte d’Ivoire (7th) and Senegal (9th) attract investors, as evidenced by their ranking in the Africa Attractiveness Index. On the other side of the continent, growth is also very strong with an average of 6% for Kenya, Ethiopia, Tanzania and Uganda. These last two being boosted by the recent discoveries of oil and gas fields.

As nature abhors the vacuum, Asia-Pacific, especially China, has filled the decline in investment from the United States and Great Britain. China is now the third largest investor in terms of FDI projects in Africa, with the strongest growth in terms of jobs created. Note also the breakthrough Japan has seen its level of investment and jobs created increase by 757% and 106% respectively.

These figures, which show a real enthusiasm of investors for the African continent, remain to be relativized and taken in retrospect. Africa still receives an inadequate share of global FDI (11.4%) in terms of its population and its potential. Long coveted for its natural resources, the diversification of the African economy is underway, driven by the dynamism of sectors such as transport and logistics or the automobile. It is also worrying that the share of investment projects carried by African investors has continued to decline since 2013, falling to 15.5% in 2016. This contributes to the degradation of Africa’s resilience to external shocks ‘economy.

That Africa is attractive to foreign investors is a good thing, but it must also become an opportunity for African investors themselves! That is why we must redouble our efforts to achieve greater regional integration and a policy of reducing barriers to trade between the countries of the continent. History has shown that these choices lead not only to economic development but also to political stability, two essential objectives for ensuring the well-being of the population.

[1] EY’s Attractiveness Program Africa, « Connectivity redefined », May 2017