High growth, no foundation; the case for Africa

Dustbin estateAfrica’s growth is no longer debatable. Evidently, the case of the “African economic miracles”; six of the ten world’s fastest growing economy are in sub-Saharan Africa however, three of those six sub-Saharan countries which includes; Angola, Nigeria and Chad are oil dependent nation.  Oil dependent economy is unsustainable as such growth is subject to the rise and fall of oil prices among other deterring factors. Todd Moss, head of the Emerging Africa Project at the Centre for Global Development quantified the African economies success stories as “big, important and historical” also suggesting that the dominant trend of such growth varies among countries.  Ghana is thriving making stable progress; Chad is free-riding on the commodities boom. While Nigeria, with the highest population in Africa thrives on its banking and telecommunication sector and the great torrent of oil income plagued with corruption, poverty and inequality.

The implication of this is that, growth recorded in the midst of extreme poverty is insignificant; as the conditions surrounding such growth lays no foundation for sustainability.  As the end of the MDG is fast approaching, Koffi Annan suggests, that recommendations for developing countries need to focus on context-specific sustainable solutions centred on human welfare and development.

The challenges associated with rapid growth tend to highlight institutional loopholes in developing countries. Rapid change can bring inefficiency as well as neglect to human capital, national assets, and natural resources as key players try to adjust. To manage change and mitigate risk, we must understand the adverse effects that corruption, illicit trade, weak governance and other global threats can have on economic growth and millennium development goals, as well as efforts to expand wealth redistribution across all communities in developing countries.

Undeniably, the most significant impact of the Millennium Development Goals (MDG) is quantifying the challenges facing poorer countries in targets and setting measurable indicators. It has been said that the MDG was a nice idea; highlighting everything wrong with poor countries and giving the world false hope. Maybe it is true MDG raised false, but at least now the world identified the challenges and in the process has improved data collections where it never existed in much of developing countries, particularly, in Africa.

For example, in Nigeria, the MDG has managed to put a figure to the amount of out of school children, how many young people are under-employed, unemployed, and lacking relevant labour market skills, methods are emerging to enable comparison between a country’s GDP and development.  Angola( a high natural resources income earning country’ s per capita income versus well-being of the majority, particularly under-5 mortality rate comparable to Haiti (a lower income country) and Indonesia ( a medium income country) , highlighting the unparalleled relationship between GDP and rising poverty and inequality is in itself progress.

Further, according to the Africa Progress Report (2013), Nigeria, was one of the countries that experienced significant improvement with the access to Universal Primary Education which was implemented in 2004, UNICEF (2013), suggests that the scheme backfired as more children are dropping out of school; 10 million out of school children, with 4.7 million of this children located in northern, Nigeria.  Why is a country that reported rapid increase in access to primary education eight years ago suddenly declining? A closer look at neighbouring country; Ghana’s attempt and methodology at the same scheme a decade ago shows why the rate of children dropping out of free education is on the increase in Nigeria, Ghana’s approach was welfare focused.

Analysis ofGhana’s People’s Participation Project (PPP) established in 1980 peaks on concepts of sustainable livelihoods. It highlights a people-centered, holistic, dynamic, and building on strengths (assets), Macro-micro links, and Sustainability. Beyond people centred approach, the difference between methodology adopted by Ghana and similar projects across Africa is, the PPP understood that if participation is viewed as the project’s ultimate goal, it may lose sight of the need to provide locally recognizable benefits. Participation, therefore, must be viewed as a method of improving the project’s ability to identify and produce locally recognizable benefits and solutions.

Some developing countries are moving from access to education to quality, essentially, countries are connecting the dots; coming to the knowledge of how all of these individual agendas are interconnected to each other in achieving a common goal (development), i.e. access is inefficient without welfare, quality is equally vital as it has an impact in unemployment rate.

The MDG has gone beyond highlighting the challenges to equip the people with data as well as empower them with the right information to address issues that would have otherwise been overlooked. For example, the sudden upsurge of women empowerment, reducing child mortality rate and the recent fight against child marriages, girl child empowerment is gaining momentum.

Surprisingly, much of Africa has experienced significant economic growth in the last decade, however, as highlighted in the Africa Progress Report, there are huge disparities in  the relationship between economic growth and poverty reduction; natural resource wealth which should ordinarily strengthen economic growth and support human development, is fueling  to poverty, inequality and conflict in Africa.

Demands for these resources is propelling what some commentators refer to as commodity super-cycle; keeping the prices high and benefiting the elites in these societies. Africa is an abundant evidence in support of natural resource curse; Nigeria, Angola, Guinea and Liberia, perfect examples of countries that have grown economically due to natural resource earning, with the rare exception of Botswana’s success in managing economic growth by improving governance which has largely impacted welfare and poverty reduction. Unfortunately, much of Africa is unable to channel such earnings to bridge the growing gap between GDP and inequality and poverty.

The relationship between resource exports, conflicts and poor governance is an interesting one;  although it is obvious, that for these MDG goals to be reached, resources needs to channelled to address specific issues affecting the poor and vulnerable, it is still an unpopular topic in discourse on fighting poverty in poorer countries. Particularly more interesting, is how these arrangements are designed to function in favour of elites and bogus government spending in most cases, yet claims to be interested in poverty alleviation.  Albeit, resource wealth has contributed immensely to increase in average income earning and this sort of growth should reduce poverty eventually by improving livelihood, but, data gap make comparison between economic growth and poverty reduction a myth in Africa.

Nigerian legislatives earn the highest basic salaries in the world(excluding bonuses and other allowances), in the same country, human basic needs is none-existent, education is deteriorating; affecting labour market “possibilities”, unemployment is soaring and the country is continuously facing unrest which could threaten democracy and stifle economic growth eventually. This co-existence of increasing poverty and inequality in the midst of economic boom is similar to the combination of good and bad news, the bad news is, it is likely to swallow the good news, if not arrested “strategically”. Put simply, although Nigeria has been projected to continue growing, there is nothing hopeful, positive or sustainable about growing inequality, bloated government spending, and lack of basic needs, jobs and growing conflicts in Nigeria.

If the aim of MDG is halving poverty, reducing child mortality, increasing access to education, etc., then welfare is a major indicator for achieving these goals. Analysing growth and progress in Nigeria, Angola, Guinea, Liberia and Botswana, what become apparent is what Botswana does with its growth and how improved governance aids the redistribution of the Botswana’s growth. There are undeniable potential in Africa, but it could diminish if nothing is done about inequality (beyond income) particularly targeting well-being of the very poor and vulnerable in society. Well-being is still a major reason why despite GDP growth, Nigeria, has one of the highest rate of out of school kids; why should poor, hungry children be interested in education as posed to street hawking and begging?. The vital point is; the relationship between economic growth, wealth distribution and human development is not by default, but one requiring strategic efforts to ensure, resources is directed towards addressing issues affecting the poor.

In Angola per capita income versus welfare is largely unequal, comparing Angola’s under-5 mortality rate to Haiti and Indonesia; a low and medium GDP countries highlights, huge disparities. Measuring this divergence between wealth and well-being, is in analyzing a country’s average income with its standing on UN’s Human Development Index (HDI).  Also, mineral super power Congo ranks last on the HDI, while Chad, Mozambique and oil-wealthy state, Nigeria, is also in the last five. Guinea, one of the global fastest growing economies is ranked 91 on HDI while Vietnam, an average economy is 8 places higher than Guinea.  Gabon is 40 places higher than Malaysia on the income scale equivalent however; Malaysia is 45 places higher than Gabon on HDI. Evidently, these scenarios show that much of Africa’s focus on sustainability is misplaced as it is not people-focused.

The strategies adopted by the Nigerian government is somewhat shallow and anti-poor people; the deportation of poor people from Lagos state. Nigeria, a largely youthful population, yet, lacks concrete strategies, targeting issues affecting this youthful population. Contrarily, poor people are viewed as enemies of progress who must be taken off the streets and hidden in order to make government look good, unfortunately for the Nigerian government, poverty cannot be hidden; its floats everywhere. Poor people were deported to their states in rural Nigeria from Lagos state. Recently, I witnessed kids beggars being beaten up by political thugs on the streets of Victoria Island, Lagos, if poor people, don’t beg to eat, how else are they supposed to feed? How are kids who have been offered free education going to go to school on an empty stomach on bare foot? How can parents be encouraged to allow their children go to school as opposed to hawking and begging on the streets to feed themselves and their families?

One thing is certain, as long as Lagos state remains a part of Nigeria, it will never be a mega-city, busy yes, robust economy yes, but Lagos state due to the opportunities represents hope for a square meal for many in Nigerians, poor people will always migrate back to Lagos state in search of greener pasture.  Deporting the poor from Lagos state or beating up kids beggars and expecting them to go to school on bare foot and empty stomach is at best disastrous.

The absence of social good and welfare targeting the poor is the biggest challenge to Nigeria’s sustainability and overall development. According to the global corruption barometer, Nigeria is the 8th most corrupt nation in the world, the healthcare system is non-existent, an estimate of 3.4 million people are living with HIV/AIDS, the Global Terrorism Index (GTI, 2012) ranked Nigeria the 7th worst in the world for terrorism in the last ten years, highest prevalence of Vesico-Vaginal Fistula in the world, with over 200,000 patients and an annual incidence at 20,000 (girl-child/women issues,  the World Bank ranked Nigeria  the 2nd worst in the world in power supply (electricity), 82.4 million Nigerians lived in darkness, lastly Nigeria is one of the worse countries in the world to be a child.

Implication of growth without foundation

It is predicted that Africa’s population will double in the next 40 years to reach two billion — which will be 20% of the world’s population in 2050. The median age in the continent is just 20 — making it the world’s youngest continent. Large parts of Africa still suffer from crushing poverty, hunger and disease for which young people, women and children are the most susceptible to. If these scourges are to be eradicated from the continent, there is an urgent need for human capital investment.

The shortcomings of Africa’s jobless growth is, the impact it has on a major indicator of growth and development; welfare. Without jobs or meaningful livelihood options, young people in Africa will naturally seek other ways to release their energies. This may become manifest increased violence and terrorism –, or as often is the case in situation of growth in the midst of extreme poverty.

Further, because basic amenities and social goods is lacking in much of Africa, it is imperative that “Africa rising” boom generates employment to enable the mass poor purchase their required social goods and service for survival. With this, the essential question remains, (a) how can these high growth markets create more jobs (b) how can resources be channelled to focus more on welfare for the most vulnerable in society?

Thirdly, international experience shows that a demand-driven feedback to labour market deficiencies is most appropriate in developing contexts. As such, macroeconomic policies should be designed around stimulating employment alongside intensive investment and developing human capital. Additionally, such effort is also likely to enable growth of the informal economy and, in turn, lead to increased demand for new labour. For Nigeria, this means harnessing and not killing the informal sector.

Furthermore, public works schemes offer one such short-term solution to speed up employment, growth and aid young people to enter the labour market, often for the first time. For Africa, they can be used to facilitate development of physical and social infrastructure. Specific policy responses should thus direct these programmes into sectors where the infrastructural need – and thus the demand – is greatest.

To identify these areas, policy-makers should seek out demand-led partnerships with employment generating sectors of the economy in order to identify and thus help satisfy the demand for skills using a targeted and efficient approach. This requires a review of the relevant sectors in order to understand the constraints inhibiting growth, and thus how to overcome them and accelerate development. Both vocational training and enterprise development may also contribute successfully to employment-creation.

Furthermore, even the most finely-tuned policy responses will falter in the face of inadequate state capacity. Fiscal deficiencies and weak institutions are unfortunately e realities of many African nations, and may undermine the ability of the state to initiate job-creation with real effect, making state building essential for sustainability.

In conclusion, what will work for Nigeria is well structured people centered public policies backed by government commitment. However, the government cannot do it alone, therefore, private sector/elite partnership is necessary.  Imagine what is possible, if Dangote started a school meal projected(an out-source contract, but a project implemented by an arm of Dangote foundation) for primary school in his state to boast access, another elite alongside Dangote, had a monthly, free health assessment for same kids, in five years, progress would be recorded.

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About rebeccaidd

Fun, passionate, inquisitive exploring development
This entry was posted in Africa, Development, Development and Economic growth, Economic Growth, Governance, Politics, Poverty and tagged . Bookmark the permalink.

4 Responses to High growth, no foundation; the case for Africa

  1. Pingback: Is the world approaching the end of north versus west? – Y! Opinion

  2. Pingback: High growth, no foundation; the case for Africa – Y! Opinion

  3. Chris says:

    As usual, I love reading your perspective. Great job on the indepth analysis of African nations and the cross comparison. Welfare should be development’s next big thing.

  4. Pingback: High growth, no foundation; the case for Africa | On The Path to.....

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