There are tales of ’A Golden Age’ in Africa. We hear of an economic boom, vast economic growth, a rise in middle class, increased foreign investment, soaring exports. Growth is climbing to unprecedented heights—second only to Asia—and for the first time in generations, Africa is receiving more investment than foreign aid. Some of the poorest corners of the continent are being transformed, but is this a holistic picture? How does this development effect the population and is it inclusive?
Hope is rising dramatically. There are many examples of foreign companies leasing land from African governments, increasing employment and replacing subsistence farming with wage labor. This has allowed villagers the security of a set pay, to build roads and houses, and get credit from banks.
However, in an investigation by Globe and Mail Africa correspondent Geoffrey York, it is explained how Africa’s growth is changing its future (AFRICA NEXT: A SIX-PART SERIES). He argues that in even the best-performing African countries, the boom threatens to create two solitudes, between those who will be on the winning side and those who risk losing hold of what little security they had. There are those who are excluded from this golden age of globalization and prosperity, but are instead becoming further marginalized with increased dependency on a salary and foreign involvement.
Despite all the business activity, so far it has failed to provide much improvement in the lives of ordinary people.
Workers question foreign investment by multilateral companies, especially if no consideration is given to the social costs. Foreign land leasing often limits former water access to those who rely on these channels for survival. There are also concerns that not enough land remains to feed the population in the future and that produce will need to be imported from abroad. As foreign investment mounts, it often brings with it traumatic social dislocation and a distorted economy.
A major problem is that many African governments do not have the business experience or legal resources to negotiate fair deals with large multinational companies.
There is still a power imbalance between huge multinational investors and weak governments, with officials tempted by quick payoffs and sometimes willing to sell out the people who live on the land. The money often disappears into the pockets of a corrupt elite, while ordinary Africans see fewer benefits. Profits are then exported to overseas owners, and local benefits are poorly distributed. As they face the next wave of foreign investors, the interests of their people could be swept aside. One can question whether the African boom is sustainable if it fails to tackle corruption, logistical chaos and structural weaknesses.
It does not have to be this way. There are positive examples where African countries choose to capitalize on non-resource economies.
A few African countries, such as Botswana and Ghana, have carefully managed their resource revenue and transformed themselves into middle-income countries. In mountainous Lesotho, thousands are employed in textile factories that take advantage of a U.S. duty-free policy, making Lesotho the continent’s biggest apparel exporter to the United States.
Also, in one of my previous blog posts, I described a fast-growing cellphone-based mobile-money industry in Kenya, which has nurtured thousands of entrepreneurs. There are also attempts from various countries, weaving away from a picture of wartorn Africa, that have focused on tourism as a source of domestic income.
To follow Geoffrey York’s work, click here.