This is a re-post from September 2010. I quite like this post and thought I’d put it up again now that la Curl is getting more traffic.
P.S. On a completely unrelated note, check out this mind-bending recipe for Nigerian tacos on Afrolicious. I thought my sister and I were the only ones to do stuff that was “crazy” like this! I vaguely recall an experiment involving scrambled eggs + efo elegusi. My Pa was grossed out, I was sated…yummy
McKinsey Quarterly on Sustainability of Economic Growth Across Africa
A panel of regional business leaders including Bill Egbe, President of Coco-Cola South Africa, and Maria Ramos, Group Chief Executive of South African financial services company ABSA, discusses sustainability of Africa’s growth.
Random Thoughts on Growth (A Nigerian Perspective)
Obviously, various African economies have experienced significant growth over the past two decades. Vague allusions to an African middle class are becoming a concrete reality. All you need to do verify this is to walk into a Mr. Biggs or Tantalizers (my personal favourite) in any city in Nigeria (not just wealthy Lagos, Ibadan, etc.) to find kids young and old spending their disposable income with wanton abandon. Obviously someone needs to put a few footnotes to the widely touted “Africans-live-on-a-dollar-a-day” cliche. Also, consider the $100M Ikeja City Mall under construction in the Ikeja area of Lagos. According to the press release by Actis, a member of the consortium financing the project,
…[T]here are 3.9 million potential customers within an 8km radius of the site
Apparently, most of the shop space has already been let. According to McKinsey
Now 80 million households earn at least the equivalent of $5,000 annually, the point where discretionary spending commences—an increase of 80 percent in eight years. Meanwhile, the continent’s GDP has been rising steadily, at around 5 percent a year, for the past decade, reaching $1.6 trillion in 2008. Last year, Africa was one of just two regions (the other was Asia) where GDP rose.
Again, we don’t have to consider Africa’s upper middle class before we begin to see the impact of growth on the common man. Looking to East and Southern Africa, we see the accelerated pace of development in Maputo, Mozambique and Luanda, Angola spurred in part by the recent discovery of oil. It’s no longer surprising to see scaffolding zig-zagging across the skyline of many African cities; a symbol of construction and development as cities edge towards modernity. But, of course the question remains of development in the suburbs and in rural areas, and of the extent of the trickle down effect of wealth from the hands of the elite few to the masses. It is not uncommon to find jarring displays of extreme wealth beside jarring displays of extreme poverty in many developing African cities. It is the moral imperative of every African to work towards better standards of living for Africa’s poor.
There is also the question of how to diversify local economies away from trade towards manufacturing (given adequate development of public infrastructure, of course). Driving around Lagos and Ibadan a couple of weeks ago, I tried to wrap my head around the implications of markets where stalls, packed tightly like sardines with each trader staking a claim on even the slightest possibility at a sale, all sold nearly identical wares. Much is made for the need of governments to diversify revenues from natural resources, but the issue of the glut of traders is rarely discussed. How can an economy develop when everyone is a seller and few are buyers?
To my mind sustaining African growth requires sustainable investment. This convincing Africans and the world outside Africa that Africa is worthy of investment (moreso than aid). This requires showing practical examples of the impact of economic growth; that growth exists so as to encourage inflow more investor dollars (and less so of aid) to the continent. Sustainable growth, to my mind, must be built on the foundation of a diversified economy - diversification of both the macro and micro-economies fostering the job creation that is the bottom line to any sort of sustainable economic growth.