For the past few days, economists and analysts have been cautiously pleased that two economic locomotives in Africa are returning to positive growth rates. Nigeria and South Africa, which have competed for years as the continent’s leading economies, are experiencing a growth rate of 0.55% and 2.5% respectively.
These numbers are positive, but is that enough? These statistics are only a reflection of a situation at a given moment, the expression of some interesting performances in certain areas, in particular agricultural or mineral raw materials. The economic agency Bloomberg explains in this regard that “both economies had agriculture largely to thank: in South Africa, a bumper corn harvest following the worst drought in more than a century saw the sector surge 34 percent from the prior quarter, while in Nigeria, where farming vies with industries as the second-biggest contributor to GDP, it increased 3 percent from a year earlier despite the period being in the planting season”. In both countries, as in others, growth remains fragile. A slight change in world prices (cereals, oil, for example) can reduce the economy.
The political and security situation can also affect investment, and therefore growth capacity. And then the situation of these two countries is very different: Nigeria is the leading producer of crude oil and the most populous country in Africa today and needs at least 3% growth just to absorb the growth of its population. I am not even talking about creating enough jobs for all the young people who arrive every year on the labor market.
South Africa remains the most industrialized country on the continent, but its population, so its market, is not very large. The country already has important infrastructure, including nuclear power plants, and significant natural resources, but is it sufficient to maintain a high rate of growth that ensures a better standard of living for all?
The link between growth and the well-being of populations, which might seem obvious, is not an absolute rule. The example of Nigeria is enlightening, because if the country finally emerges from one of the worst economic phases of its history, it should be remembered that between 2004 and 2010, when its economy grew on average 8.32% per year, observers noted with surprise that the level of poverty was increasing from 54.7% to 60.9% of the population.
The growth of the economy does not mean an equitable distribution of wealth. Nigeria is no exception to a trend seen elsewhere, namely the widening gap between the very rich and the very poor, and the large increase of the very poor share of the population.
Only long-term growth-sustaining programs and equitable redistribution of the fruits of this growth can lead to an improvement in the situation over time.