Wakanda's Prosperity Isn't So Far-Fetched for Africa
Moviegoers have been going crazy over “Black Panther,” the new Marvel comic book superhero film. In addition to being a fun romp, the movie holds special emotional significance for many -- not just because of its mostly black cast, but because of its setting, Wakanda. A fictional country located somewhere in Africa, Wakanda avoided colonization by foreign powers, and is now wealthy and highly developed. That image speaks powerfully to many in the global African diaspora, and to many Africans as well.
But although Wakanda represents a fictional past, its wealth and its glittering skyline probably do represent the future for many African countries. After decades of disappointing performance, many places in Africa are beginning to tread the path to prosperity.
As of today, sub-Saharan Africa remains one of the poorest regions in the world. In addition to perpetrating numerous atrocities, colonialism left the continent with a number of artificial boundaries -- nations that cut across ethnic lines. It also left many countries with extractive institutions that concentrated political power in the hands of a small elite. Since decolonization, Africa suffered a large number of horrendous wars -- the worst being the Second Congo War, the bloodiest conflict since World War II, which drew in nine countries.
Since the 1990s, most of the continent has made a dramatic turnaround. The big wars are mostly over, and much of the continent is peaceful. As countries stabilized, governance improved. Child mortality, malnutrition and deaths from malaria have plunged. Literacy rates and years of schooling have increased dramatically.
As a result, Africa has already made some progress against poverty:
But it’s still early days. The region’s per capita income remains only about one-tenth that of a wealthy country like South Korea.
So how are African countries going to get rich? Here, Wakanda doesn’t set a very good example. It’s a small country with fabulous mineral wealth -- kind of like Qatar, Brunei or Kuwait, which have vast oil reserves. But although such countries do exist, they’re rare, and they’re all very small. Although Botswana has managed to parlay its natural riches into middle-income status, most African countries have populations far too large to imitate the Qatar model.
Natural resources tend to be more of a curse than a blessing. They reduce the incentive for elites to invest in workers, and increase the incentive to topple the government and seize control of mineral revenues. What’s more, they keep countries trapped in an unproductive corner of the global supply chain -- in order to get rich, a country needs to make a large variety of products instead of focusing on just one.
So to get rich, African countries need to do more manufacturing. That journey usually begins with labor-intensive industries like toys and textiles, and often involves a lot of foreign direct investment -- multinational companies building factories in low-cost countries. That’s how China got started on its road to riches, and it’s the best bet for Africa too.
Fortunately, early signs are good. African countries are getting more manufacturing FDI.
Between 2005 and 2015, manufacturing output in Africa has approximately doubled, and manufacturing exports tripled.
Much of the growth in investment is coming from China. There are about 10,000 Chinese companies in Africa, employing and providing job training to several million African workers. Chinese investment has tended to flow to countries with larger domestic markets, indicating that Chinese companies don’t simply want to grab the continent’s natural resources. About half of the local managers in Chinese companies are Africans. Of course, this is in addition to investment flows from other rich countries in Europe and Asia.
And the investment is having an effect. Economists Vito Amendolagine, Andrea Presbitero, Roberta Rabellotti and Marco Sanfilippo found that African economies are becoming more diversified, and more important to global production chains. That’s a very good sign for future growth.
African governments are helping as well. Amendolagine et al. praise recent government efforts in countries such as Ghana, Nigeria, Mozambique, Ethiopia and Rwanda to improve infrastructure and education. And a 2009 paper by economists Laura Beny and Lisa Cook found that improved governance has been a big factor in African economic expansion.
All this is showing up in the growth statistics. Since the mid-2000s, growth has accelerated in the countries that have been getting manufacturing FDI:
From 2003 to 2016, inflation-adjusted per capita gross domestic product in Ethiopia more than doubled. Rwanda, Ghana Mozambique and Zambia did almost as well.
Suppose an Ethiopia-like pace of growth can be maintained. If an African country starts out now with a GDP per capita of $1,000, and doubles every 15 years, it will have to double about five times to reach South Korea’s current level of wealth. That’s 75 years -- the year 2093.
That might seem like a long time in the future, but there are plenty of people alive today who will live to see it. Of course, in reality, there will probably be ups and downs along the way. Growth will slow and accelerate, some African countries will pull ahead and others will fall behind. Nor will Africa be able to follow the exact same growth path Asia used -- automation will reduce the creation of factory jobs, and the threat of climate change will force African countries to power their development with solar energy rather than fossil fuels.
But the goal is within reach, and many African countries -- helped by good governance and foreign money -- are off to a great start. Whereas right now people love to talk about a Chinese century -- after the halfway mark, people might be talking about the African Century instead.
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James Greiff at firstname.lastname@example.org