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Wed July 11, 2012
Despite Grim Headlines, Africa Is Booming
NEAL CONAN, HOST:
This is TALK OF THE NATION. I'm Neal Conan in Washington. The news stories are not wrong: There is all too much drought, poverty, famine and war in Africa. But you will also find six of the world's 10 fastest-growing economies there. Malls, high-rises and Internet cafes are popping up in cities across the continent, and a new generation with more income, more global interests and more ambitions.
Some analysts tout Africa as the new Asia. Others worry that growth cannot be sustained. All agree, though, that profound change is underway. If you've done business with Africa, call and tell us what's changed, 800-989-8255. Email us, firstname.lastname@example.org. You can also join the conversation on our website. That's at npr.org. And click on TALK OF THE NATION.
Later in the program, the changing roles of fathers on TV sitcoms, but first the promise and potential pitfalls of Africa's economic growth. We begin with Howard French, a professor of journalism at Columbia University, former senior writer and foreign correspondent for the New York Times. He joins us now from a studio in Abidjan in Côte d'Ivoire, and nice to have you back on TALK OF THE NATION.
HOWARD FRENCH: Thank you, good afternoon.
CONAN: And you recently described the change I was just talking about in a scene from a shopping mall in Zambia.
FRENCH: Yes, I did. I've spent a lot of time in Zambia over the last three years doing some research for a book and have watched sort of with fascination the booming rise of these shopping malls in Zambia, which have changed the fabric of life, if you will, in the center of the city of Lusaka, where first one mall then two malls and pretty soon, in the space of three years, several malls all sprouted up, and I sort of watched this emergent consumer culture take hold amongst, well, all population groups.
But the element that fascinated me most in the piece that I wrote about was among teenagers and young adults.
CONAN: Do these teenagers have disposable income to spend at the mall?
FRENCH: Well, this is the fascinating thing about what's happening in Africa right now. All Africans, well nearly all Africans, have disposable income in a way that one could not conceive of them having had a generation ago - or even less than a generation ago.
And the best evidence of that is the rise of the mobile phone. A mobile phone - use of a mobile phone is almost by definition a form of disposable income. You have to keep it charged with airtime. Most Africans don't have contracts for their phones. They keep topping it up, as they say, to add minutes so that they can keep talking.
And by doing so, they are disposing of their income, and the growth of the mobile phone in Africa has been something just breathtaking to watch, almost - in big urban centers, almost everyone's got one and is always using them.
CONAN: You spoke with a boy named Joshua Banda(ph), 15 years old. You describe him as wearing green Converse All-Stars with matching laces, proclaimed himself to be fan of Lil Wayne and that he wants to be a lawyer.
FRENCH: Why I was so interested in that is because I think that both the quick - the sharp economic rise and the sort of access to other cultures' information models via the Internet and via the window to the Internet that the mobile phone represents, have begun to change local culture in many, sort of, dramatic ways here and there in urban centers around Africa.
Young people have instant access to what's happening elsewhere. That doesn't mean that they slavishly imitate or mimic what's happening in other places, but they are - there's this cross-fertilization taking place where, you know, styles and music from New York or Paris or from other parts of the world, for that matter, are instantly fertilizing or cross-fertilizing what's taking place in their lives.
CONAN: It's interesting, the IMF's list of the 10 fastest-growing economies from 2001 to 2010 does not include Zambia, but it's projection of the fastest-growing economies over - from 2011 to 2015, well, Zambia is on that list.
FRENCH: Sure, there's some churning involved in these lists. There are countries that, you know, have had very intense growth spurts that are now tapering off a little bit, and others that have not previously had big growth spurts that are now beginning to boom, such as Zambia.
The thing that I find most interesting about some of these lists, though, is that it's not merely that there are six or seven countries, depending on who you believe, that are among the top 10 fastest-growing economies in the world; but there are six economies in Africa - at least six economies in Africa, I'm going to repeat some sixes here, that are growing at at least six percent a year for at least six years. Which means that there's a really striking phenomenon taking place, that has shown some legs or some durability in a number of places.
And I think that the media has been a bit slow to pick up on this.
CONAN: And is that growth, as people move to cities, is what happened in so many other parts of the world?
FRENCH: I think the demographics are a really big piece, part of this. There's an overall increase, a very rapid increase of the population in Africa taking place right now, and this puts the continent in what demographers would call a demographic sweet spot, meaning that you have a big crunch of people entering their most productive years.
You don't have a lot of dependent old people beyond that bulge in the population, and so these societies are experiencing the sort of rush of energies that the young people entering the working age typically exhibit. And this is, you know, good for productivity, it's good for invention, for creativity, consumption, on and on and on.
At the same time, African cities against this overall backdrop of a very fast economic growth for the continent are growing even faster. Urban populations in Africa - and I'm speaking of sub-Saharan Africa - will triple between now and 2050. Forty percent of Africans live in cities. Sixty percent will live in cities in 2050.
CONAN: Joining us now is Edward Miguel, a professor of economics at the University of California-Berkeley. His research focuses on African economic development, and he's with us by phone from Kampala in Uganda. Nice to have you with us today.
EDWARD MIGUEL: Hi, nice to be here.
CONAN: And just as Howard French was describing malls in Lusaka, you described a city on Kenya's border with Uganda, which had undergone a complete transformation because the road got paved.
MIGUEL: Well, that's right. I've been working in Busia, Kenya. It's actually a city that straddles the Kenyan and Ugandan border, and I've been working there for about 15 years, since I was in grad school. And the transformations are incredible and echo a lot of what Howard was speaking of.
The physical infrastructure, the roads, the electricity, the access to cell phones and even expansion of schools and school enrollment in Kenya over the last decade. So it isn't only in the big capital cities where there's growth. Even in provincial towns and district capitals and many rural areas, we're seeing tremendous growth in Africa.
CONAN: Yet there is also concern that this may be very fragile. We remember the violence in Kenya that erupted after elections there, what, in 2007.
MIGUEL: That's right. So sub-Saharan Africa, over the last decade or so, since about 2000 has experienced very rapid economic growth, but it's not without its pitfalls. And Kenya is a great example of this. Kenya has had quite rapid growth, and really when the 2007 election was approaching, there was a tremendous feeling of optimism.
Kenya had had a pretty clean election in 2002 that had led to a long-ruling party losing power. But Kenya's democracy is new and somewhat fragile, and a contested election in 2007 led to ethnic violence. So sub-Saharan Africa, for all of its progress over the last decade, decade or so, is not out of the woods.
CONAN: And Howard French, as we look towards the Asian model, if that's the appropriate place to look, a lot of people say look, you had efficient, relatively uncorrupt governments in places like Singapore and South Korea, even in China. Those kinds of institutions, well, they're hard to find in sub-Saharan African.
FRENCH: I don't expect, and I don't - haven't met many Africans who expect Africa to copy the political or economic models that we have seen in East Asia, in places like China and in Singapore. I think that a couple of interesting things, important things need to be said about your last exchange, though, and that is that, you know, Africa suffers from a particular phenomenon where if something traumatic happens in one part of the continent, more I think than in other parts of the world, the hangover from that news sort of affects the rest of the continent.
Headlines often say something happened in Africa as opposed to in a region of Africa or better yet in a particular country of Africa. Africa is definitely not out of the woods yet, there are many questions that need to be answered, but in terms of unrest and instability, the fact is that there has been a lot less unrest in Africa in the last - precisely in this period of economic growth since 2000 than in other recent decades.
And at the same time, there has been markedly better governance in a lot of African countries, primarily due, not exclusively due, but in many places due to the spread of democracy or the deepening of democracy of various countries.
CONAN: Let's get a caller in on the conversation. If you do business in Africa, how have things changed? 800-989-8255. Email email@example.com. Methony(ph) is on the line with us from Portland, Oregon.
METHONY: Hi, my question is in regards to how Africans are experiencing this new economy, especially the ones that are influenced by the Western world. And I'll give an example: In Mozambique, a lot of land right now is being bought by, mostly, people from Portugal, and what's going on is the indigenous people are being marginalized. Their land is being taken.
And it just feels like it's some re-colonization that's coming up. The reason I ask this question was I think you have a speaker that's coming up that was talking about the Western world, speaking about - looking at Africa as a business opportunity. And so that's a concern that I have right now.
CONAN: Well, Edward Miguel, can you help us with that?
MIGUEL: Sure, there's certainly been tremendous discussion and interest in agriculture in Africa over the last decade. The commodity price boom, the global commodity price boom that we've seen since around 2002 has benefited a lot of African producers, both of agricultural commodities, as well as minerals.
And a lot of foreign investors are looking to buy land and secure supplies of agricultural commodities. So I think what's going on in Mozambique isn't unique. There are similar cases in Ethiopia and other East African countries.
It's hard to say whether the foreign direct investment is always going to benefit the indigenous population or not. There certainly will be some winners and losers, but on net, getting off the foreign investment in sectors where there wasn't foreign investment 10 years ago holds a lot of promise. So I think we have to, you know, balance the good and the bad in our perspective there.
CONAN: We're talking about the economic rise in sub-Saharan Africa. In a few minutes, suggested, a business advisor tells us why she thinks it's smart for U.S. companies to invest in African countries. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.
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CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan. We're talking about the promise and potential pitfalls of Africa's economic growth and a new generation growing up with a booming economy and a new sense of optimism.
If you've done business with Africa, call and tell us what's changed, 800-989-8255 is the phone number. The email address, firstname.lastname@example.org. You can also join the conversation on our website. Go to npr.org. Click on TALK OF THE NATION.
Our guests are Howard French, a professor of journalism at Columbia University, author of "A Continent for the Taking: The Tragedy and Hope of Africa." His recent article in The Atlantic is titled "The Next Asia Is Africa: Inside the Continent's Rapid Economic Growth."
And also with us, Edward Miguel, professor of economics at the University of California-Berkeley, author of "Economic Gangsters: Corruption, Violence and the Poverty of Nations." We have a link to his article, "Is it Africa's Turn?" and to Howard French's piece at our website, again that's at npr.org. Click on TALK OF THE NATION.
And Howard French, I think that sense of optimism, that's something that can't be understated.
FRENCH: No, well, it can be underplayed. It shouldn't be understated, but it can be underplayed and is underplayed. I mean, I have - I take the insider's and an outsider's perspective on this, having worked in daily newspaper journalism for many years and now being on the outside of that world, watching its work on this subject and feeling sometimes frustrated as I travel around the continent like I have very intensively for the last three years that generally speaking, the American media is not really very finely tuned in to what's happening in Africa.
I'll give you another example of what's - what should be fueling this sense of change and even optimism. Education in Africa is, as I think Edward referred to earlier, is just, is absolutely growing through the roof. Secondary school enrollment is up between - by 48 percent between 2000 and 2008, and higher education enrollments around the continent grew in that same period by 80 percent.
One can't have, over this sort of time span, those sorts of numbers rise in that kind of way and not expect to have massive change in these societies for the better.
CONAN: Edward Miguel, another question, you mentioned commodities before. How much of this economic growth is extractive in terms of oil and minerals and that sort of thing, and how much is integral growth within the countries?
MIGUEL: I think that's the big debate among economists these days, and there are, you know, camps of people that tend to see it as more internally driven or external. I tend to see both as being very important. The rise in commodity prices is an important part of the story. Really, a lot of those are driven by rising Asian demand.
But the internal changes are critical. So Howard mentioned before the rise of democracy in sub-Saharan Africa since the 1990s, and we really can't understand the dramatically improved policy environments in African countries without pointing to democracy as providing greater accountability for leaders and leading to better governance.
You know, if we dig a little deeper into the rise of democracy, we probably have to go back to education as an important factor. Even in the '70s and '80s and '90s, which were in many ways lost decades for economic growth, there were very large expansion in primary schooling, secondary schooling, literacy, and all of those things helped to sustain the democratic institutions that we see emerging in Africa today.
CONAN: Let's go next to Hillary(ph), Hillary on the line with us from Cotati in California. Am I pronouncing that right?
HILLARY: That is the way you say it.
CONAN: OK, go ahead, please.
HILLARY: I was wondering if the guests could comment on how successful treatment for HIV and the resulting extension of life expectancy has impacted African economies. That's all.
CONAN: OK, Howard French, can you help us out?
FRENCH: Sure, I have - during this three-year period of travel I've referred to a couple of times, I've spent a lot of time in Mozambique and Zambia, Namibia, a variety of other southern African countries. And the U.S. and the WHO, the World Health Organization and Gates Foundation and other players have all been investing very, very heavily in reducing AIDS infection rates and treatment of AIDS, people infected with HIV in these countries.
And they have - the result has been - I should say, combined with the efforts of local health ministries and health professionals, the results have been very dramatic in terms of lowering mortality. And the reason this is important is because, as I said earlier, one of the big factors Africa has going for it right now, driving this growth, along with everything else we've said, is this demographic sweet spot that we're talking about, that I've talked about, where an unusually large number of people are entering the age of their primes and of prime sort of productivity and energy.
And those are also people - that is also the demographic that is typically hardest hit by AIDS during HIV epidemics. And so to the extent one can mitigate an HIV epidemic, one is extending the benefit of this demographic sweet spot, and that makes a huge amount of difference to these countries.
CONAN: Joining us now, Susan Lund, a partner and director of research at McKinsey Global Institute, the research group of McKinsey and Company. She's with us by phone here in Washington. Nice to have you on the program today.
SUSAN LUND: Thank you.
CONAN: And what do clients ask for - what are they concerned about? We can clearly see some of the opportunities in Africa. What are they concerned about?
LUND: Well, you've heard about the opportunity. Africa sells itself. We've heard about the consumers. We're going to - Africa's going to add to population of the United Kingdom over the next 10 years in terms of numbers consuming folks. We've got opportunities in natural resources, in commodities, which we heard a little bit about. And there's also a big opportunity in the agricultural sector, we believe.
Africa holds 60 percent of the world's uncultivated potential cropland, and bringing that under production would help not only global agricultural prices but would have a significant impact on different countries. Now, when foreign companies do business in Africa, it's much like doing business in any emerging market. You have to learn about the local market. It often requires a creative strategy in terms of getting local partners, figuring out how you're going to reach those customers through distribution networks. It may require tailoring different types of products at smaller quantities and lower prices.
Most importantly, companies think about how to diversify some of the risks. We've heard a lot on this program about Africa's growth acceleration. We've seen that over the last 10 years, Africa's been the second-fastest-growing region in world after East Asia. But it is important to think about how to diversify a company's footprint in different countries and building contingencies across their supply chain.
CONAN: Every country is different, but we had a caller earlier you might have heard who was raising questions about effectively neocolonialism. Is investment in some parts of Africa seen that way?
LUND: Well, it's interesting that the foreign investors in Africa today are shifting. Historically, European companies had been most active on the continent, Some of the biggest brands. U.S. companies have actually been quite slow to see the opportunities in Africa.
But we see a lot of investment in the last five to seven years coming from China and other parts of Asia. China's investment in Africa's infrastructure, for instance, a few years ago surpassed the entire World Bank loan budget to Africa in infrastructure. So Chinese companies are getting active not only in some of the natural resources in mining but also in banking and other opportunities.
Even more recently, we're starting to see companies from India and Brazil and South Korea take notice. So it's definitely a different flavor of investment than what you've seen in the past, and certainly African governments are thinking hard about how to negotiate with foreign investors to make sure that these investments do benefit the local population, say through employment and wages and so on. But there is significant capital and talent being brought to the continent, as well.
CONAN: There are kinds of industries, for example oil, where the profits tend to get concentrated in the hands of just a few people.
LUND: Well, it's true that the oil and gas industry, particularly today, is a major generator of government tax revenues in different countries. We've got some new finds, onshore and offshore, of oil and natural gas, in countries like Ghana, Uganda, Mozambique, that over the next decade could become very large sources of wealth for these countries that are already growing quite quickly.
Now the challenge is going to be how do you harness that potential wealth to build the infrastructure, expand the school system, make sure that public health is in place so that the economy develops more broadly, and it doesn't just become an export vehicle where all the wealth is accumulating into a small set of individuals.
But other countries show it can be done. If we look over to Asia, think about Malaysia has built oil and other commodities. Indonesia would be another example, Brazil.
CONAN: Lets' get Tony(ph) on the line, Tony's calling us from Denver.
TONY: Yes, thank you. I cannot speak for entire Africa or even Nigeria for that matter, but my experience when I spent about 32 years in the United States, after coming to the U.S. at the age of 20, went back to Nigeria to try and start a chain of restaurants. All I found out is the culture is not - is part of the ingredients why nothing seems to work in Africa. If I give them a model based on the United States education that I have, I'm believing, if I give them a model of how we are going to do certain things, everybody would say yes to me. And as soon as I turn my back, they will just do whatever they want to do, and it will not get us wherever we want to go, and I was losing my shirt before I went back to the United States. That is my experience.
With the education that everybody is talking about, the average graduate in Nigeria with a bachelor of science degree will have the good education that makes him literate, but it doesn't make him creative because he's not in an environment where such creativity is robust. And they will do what you ask them to do, but if you think they're going to bring in a good idea of their own that will make the business grow, it has never happened.
And most of the businesses that work in Nigeria, for example, are foreign businesses with a layer of foreign management, even though there will be African and Nigerian graduates managing the day-to-day activity, but there will always be an American or a European who will be the overall person responsible. And that's the only kind of businesses that actually succeed in the way we think of business in the United States. That has been my experience, and...
CONAN: OK. I'm sorry to interrupt, but I wanted to get a response from Susan Lund. Is that kind of management structure he's describing, is that typical?
LUND: Well, there's definitely a challenge to find enough middle managers in Africa. There's no doubt that major investments are going to be needed in all levels of education in Africa, particularly at the university level and also the vocational level, so getting technical workers who could work, say, in an automotive factory.
Certainly, this is something we hear about a lot, is the lack of management talent. But companies are actually not waiting for governments to improve education. They're taking the solution into their hands themselves. So many companies have global rotation for managers to build the talent locally and allow the promising young employees to get exposure to how business is done elsewhere in the world. You see a lot of corporate training...
FRENCH: Neal, I was in Nigeria last week, if I could just very quickly...
CONAN: Howard French, go ahead, please. Yeah.
FRENCH: Yeah. If - the caller said that if you brought an American way of thinking and of doing business to Nigeria and turn your back, you would run into trouble and lose your shirt right away. I would suggest that that would be true almost anywhere in the world, that you have to go to a country and understand its culture and its business culture and try to be smart about adapting what you know to what people on the ground know and how they're used to doing things.
I was in Lagos for the last couple of weeks, the biggest city in Nigeria and one of the biggest cities in the world, and was constantly struck by the dynamism there. In a country whose federal government is highly dysfunctional, you have places like Lagos and southwestern Nigeria, in particular, where there is an extremely competent business class that is not waiting for the national government to straighten out the country, but is paving its own way and is doing things at what, for me, was an incredible rate of dynamism.
I sat in one incubation company that hosts tech startups - and this is all Nigerians, without any Americans or Westerners of any kind around - and watched young people there creating - launching software companies, giving solutions to local corporate problems. This is almost a direct contradiction of the experience of the caller, I would say.
CONAN: Yeah. We're talking about the economic rise in Africa. You're listening to TALK OF THE NATION from NPR News.
And let me reintroduce our guests. You just heard Howard French, professor of journalism at Columbia University, author of "A Continent for the Taking: The Tragedy and Hope of Africa." Also with us, Edward Miguel, a professor of economics at the University of California, Berkeley, a research - who focuses on African economic development. And Susan Lund, partner and director of research at the McKinsey Global Institute, the research group of the McKinsey & Company.
Let's see if we can get another caller in. This is Victor(ph), and Victor is with us from Tucson.
VICTOR: Good afternoon, and thank you for a good show.
CONAN: Thank you.
VICTOR: What I noticed - I'm a Zambian, and I've been going back and forth. I was there just about three months ago. And I've noticed that things seem to be more like on autopilot. I don't think there's so much as planning than things are happening on their own. And an example is you find so much traffic congestion that the system is not prepared to actually get along with the development that's happening.
Now I don't know whether the - people in the panel have noticed that there's not as much central planning that would actually maybe take advantage of development that exists...
CONAN: Howard French, is chaotic traffic - well, it's certainly a problem, but you also point out, too, that it's a sign of progress.
FRENCH: Chaotic progress - chaotic traffic is a sign of progress, but it is also - obviously takes a big hit on productivity and can be very frustrating. I'm in Abidjan, the business capital of Ivory Coast right now, and have found myself several times in the last week or so cursing about trying to get from one part of town to another.
There's only two big bridges over the lagoon that the city is sort of built around, and if you go at certain parts of - times of the day, you can easily lose two hours on the road. Lagos is the same. Accra is the same. Lusaka is the same.
But the fact is that if you went to these cities 10 years ago, there was almost no - well, Lagos being an exception. In most of these cities, there were no traffic jams because personal vehicles almost didn't exist. And that has changed almost everywhere in urban Africa now.
I can speak to that actually, Neal, as well. Just - I...
Edward Miguel, go ahead.
MIGUEL: I just drove from Kenya to Uganda this afternoon, and we got caught in some traffic on the outskirts of Kampala. So the four-hour trip took seven hours, just before this call. So I'm sympathetic to the caller's point. I think the constraints that infrastructure plays on growth are very important. We've seen in some of the Asian success stories like India that transportation, infrastructure and power, you know, power outages have been big constraints on growth and clearly a big priority area for African countries going forward.
In Kenya where I just spent the last week, there's major construction going on around Nairobi to improve the transportation situation. There's actually a Chinese construction firm building a ring road around part of the city so that some of the trucks going from the main port of Mombasa through Kenya and into Uganda, Rwanda, et cetera wont have pass through downtown Nairobi anymore.
CONAN: And I'm afraid we're going to have to end it there. But, Edward Miguel, Howard French, Susan Lund, thank you all very much for your time. We appreciate it. Up next, dads in real life doing more and more with the kids and around the house. On TV, well...
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DAN CASTELLANETA: (as Homer Simpson's voice) D'oh!
CONAN: The evolution of the TV sitcom dad. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News. Transcript provided by NPR, Copyright National Public Radio.