18.12.2018

Three African States That Are Doing It Right

There is progress in Africa - some countries are standing out (article from 2014)

John Kerry had some friendly words to say at the U.S.-Africa Leaders Summit held in Washington last month. The U.S. Secretary of State flattered participants by noting that the discussions were very different from those a decade ago when the continent's crises had pushed Economist magazine to characterize Africa as the "hopeless continent."

 

In the late 1990s, the region had suffered another economic crisis. Then a senator from Massachusetts, Kerry spearheaded legislation to supply Africa with medicine to combat the HIV-AIDS epidemic, which had become something of a symbol for the continent's woes.

 

At this summit, it was another virus that captured attention: Western Africa needs help in the fight against Ebola that has killed more than 1,500 people in only a few months. The politicians also discussed the threat from the Boko Haram terrorist organization.

 

Nevertheless, the main message was that Africa now stands for economic opportunity. To check China's influence on the continent, the U.S. wants investments and credits in the area of 30 billion euros.

 

Africa's balance sheet over the last 10 years makes impressive reading. Economic growth was 5% on average, which is the longest period of economic growth since the 1960s. Inflation-adjusted salaries rose over 30% after sinking in the two previous decades by nearly 10%.

 

Still, we should be sure to limit optimism to certain individual countries, rather than the continent as a whole. Often, the boom in raw materials makes balance sheets look good while most of the population rarely benefits. It's important to mention the number of wars on the "continent of opportunity," as management consulting company McKinsey has characerized it: Eleven of the 20 wars currently ongoing around the globe are in Africa.

 

Investors and economists have long learned to differentiate. In the sustainable sense, very few of Africa's 54 nations make a positive impression. But there are some countries that can — with reservations — be seen as model states.

 

Botswana

 

When the British gave up their protectorate in 1966, the country had just 12 kilometers of paved road, and just 22 university graduates. On a land surface as large as France, it had only two secondary schools. The country, which has no direct sea access, may have started its independence under unfavorable conditions, but thanks mainly to its diamonds, today Botswana is considered an economic wonderland. With 15 million carats mined annually, every third diamond in the world now comes from Botswana.