Reframing Africa:2012 & Beyond: Africa's Value-Chain Contributions to the Global Community -The Positives, Challenges & Way Forward

A FEEEDS Series

By

Dr. Robin Renee Sanders,  Founder FEEEDS® Advocacy Initiative @ RMU

California State University-Sacramento – Center for African Peace and Conflict Resolution, April 27, 2012

Good Morning:

It is a pleasure to be invited to California State University-Sacramento as a Visiting Scholar and to participate in this wonderful conference that looks at a variety of issues facing Africa writ large and sub-Saharan Africa in particular.  I am here today in my capacity as the founder of the FEEEDS® Advocacy Initiative at Robert Morris University, and not speaking on behalf of the U.S. Government. What is FEEEDS® you ask? Its an acronym representing the things I have become most passionate about on Africa in this phase of my life such as food security, education, environment-energy, economics, development and the self-help role that is key to all of these things. These are the FEEEDS® pillars.
 

I have been fascinated by the breadth of the issues you are covering at this Africa conference and I wanted to set the stage for you today by talking about some of the issues and things I see that are present-day positives for the region, then look at some …. of the current and long-standing challenges, and then leave you with  a template check list on some possible ways forward for this region that we care so much about and for which we need to create shared values around.

Reframing the Discussion

I have entitled my remarks today “Reframing Africa,” meaning talking about the region differently, and respecting its multifaceted dimensions. I would like to begin with what I think of as Africa’s value-chain contribution to both the Continent and the global community -- using the phrase "value chain" in an atypical manner  -- meaning whatever progress each and every African country makes going forward has a positive ripple affect Continent-wide and for the global community writ large. 

It seems clear to me that for the most part, at least here in the U.S., the frame on Africa is mostly on the negative.  What do I mean by frame?  Taking sociologist Erving Goffman’s (1974) description of frames in The Framing Analysis and others academics such as Jim Kuypers (1997) into account, we are encouraged sometimes by institutions, news organizations and other entities to see a particular issue or country or Continent in a certain way. And, by doing so, we are “induced to filter our perceptions of the world [or parts of the world, in this case Africa] in particular ways, making some aspects of ...reality more noticeable than others” (Kuypers, 1997).

Hence, as a first start, I would argue that for 2012 and beyond let’s reframe the discussion and redirect the lens on Africa so that it is more balanced, and more inclusive of the multi-dimensional framework of the region. This however, does not diminish the challenges that we all know are there.

Africa 2012 Positive Value Chain Contributions:

I know many of you are aware that of the 15 fastest growing economies in the world today, seven of those are in sub-Saharan Africa. Botswana, for example, has maintained a double digit growth rate for the last 10 years; Ghana, will likely be the Continent’s fastest growing economy in 2012 at 8 percent; Mozambique, Nigeria, Rwanda, Angola, and Zambia are others, just to name a few. (The African Post, TAP - http://bit.ly/rB8PWx).

In fact, I have been urging (through my blog) that we re-coin the term BRICS which focuses on the economic prowess and growth rates of Brazil, Russian, India, China and in Africa only South Africa (currently with a projected 3.2% growth rate for 2012 according to World Bank reports) to BRICA in order to be more inclusive of the success and influence of other African nations that are enjoying positive growth rates at 5% or more over the last 3 years. There is a wave of economic growth and development for Africa’s emerging markets at a time of global economic downturn or slow recoveries in Europe, in the U.S. and elsewhere. On top of this, the average 2012 projected collective growth rate for SSAfrica is hovering between 6-7%, with the Financial Times forecasting this to be on order for the region over the next 20 years (http://tinyurl.com/FT-Africa-Rising).

You probably also know that foreign direct investment (FDI) on the Continent at the end of 2011 had risen to over $68 billion with projected FDI estimates for 2015 reaching more than $150 billion  (VP Africa World Bank speech 2/25/11; 2011 US FDI is $48 billion up from $41billion in 2010 ). China (infrastructure) and India (ICT and manufacturing) respectively are leading the way on FDI in the region as well as being the largest trading partners.

Equity and institutional investors are increasingly seeing the region as a haven for investment and a range of new Africa-focused equity funds are cropping up everywhere on business, infrastructure, ICT, agriculture, health or with a Diasporan focus like Homestrings (https://www.homestrings.com).  The importance of the African Diaspora being involved in the Continent’s economic growth cannot be underestimated. Wall Street Journal notes that there are more than 79 investment funds which have been created in recent years exclusively focused on Africa paying 5-6 times earnings after taxes, depreciation, and amortization[with projected 2011 year-end estimates of funds raised at over $8-10 billion (http://1.on.wsj.com/AFequity).

Funds like Helios, Old Mutual Pan Africa, Bob Geldof’s 50 million pound sterling “8 Mile African Fund,” with the UK’s CDC development finance arm (http://bit.ly/GelEquity), Aureos’ Africa Health Fund, and Ghana-based African Agriculture Fund (AAF), which has raised $30 million at the first close of its small and medium enterprises (SME) sub-vehicle. US-based Global Environment Fund (GEF) has raised $160 million for the GEF Africa Sustainable Forestry Fund (GASFF), exceeding its target of $150 million. (http://bit.ly/equitylist). While the U.S. Overseas Private Investment Corporation is involved in some 19 vehicles raising equity and capital in some of the areas noted above (http://1.usa.gov/J5Qcbs). 

What is the other good news?

Ø[Institutions like McKinsey Global Institute noted that the collective GDP of SSAfrica in 2010 was $1.6 trillion (http://tinyurl.com/SSA-GDP), which could rise to $2.6 trillion by 2020 (http://usa.gov/mccgdp);

                   Ø Debt dropped from 82% to 59% of GDP over the last 5 years;

Ø Inflation dropped Continent-wide from 22% to 8%, with many countries holding at low double digits in this difficult global economy;

Ø The region’s growing middle class is approximately 331 million, translating into growing consumers with purchasing power (http://tinyurl.com/FT-Africa-Rising); and the number of households with discretionary income is projected to rise by 50 percent over the next ten years (http://usa.gov/mccgdp);

Ø Forecast for consumer spending power is projected to rise to $1.4 trillion (Sept/Oct 2011 “This is Africa”);

Ø African Diaspora remittances are up over the last 5 years adding to GDP growth, according to informal channels.  Diaspora remittances to Africa reportedly account for 73 per cent of the world-wide total since 2005. (Figures from http://tinyurl.com/Diaspora-Remittances);

Ø On HIV/AIDS – although we still need to maintain both momentum and resources, over the last eight years, anti-retroviral drugs have saved more than 5 million lives in Africa.

Areas of sectoral growth include, but are not limited to key non-oil investment such as agriculture; infrastructure, housing, manufacturing, ICT (SSAfrica has more than 100 million cell phone users, with  Nigeria, South Africa, Kenya, and Ghana topping the list (Africa Post, TAP- http://tinyurl.com/MobileAfrica).

Now to the challenges: 

There are some key challenges that transcend the entire region. Despite the positive news that I outlined above, topping the list of challenges on both the socio-political and development scales are:
Socio-Political:

Ø  Democracy, Governance, Human Rights -- We have seen over the last 18 months more fragile African democracies face pressures from Mali-to-Senegal-to-Democratic Republic Congo-to Malawi, which underscores that the institutionalization of good governance, and respect for democratic constitutions still needs to be stronger. Clear and respected constitutional transitions still are not the order of the day. We saw this in Cote d’Ivoire in 2011 and hiccups this year in Senegal and Malawi. I do not know if some of Sub-Saharan Africa will eventually have its own version of the Arab Spring – maybe not in the same form -- and certainly it should be peaceful, but it will be defined by Africans– as calls for more sustained good governance is demanded, especially through social media as Africa’s young cellphone owners use it as a tool for election monitoring, and economic, and socio-political change. Here I am using the broad sense of governance to include freedom of the press, association and protecting universal human rights, particularly to help empower the Continent’s estimated 500 million women. (NB: Varying exact figures, but sites such as www.bit.ly/AFwomen note that females make up 48-50% of the Continent-wide population).

Ø  Corruption and lack of transparency are next -- Many of the countries that are faring well with their positive macro-economic factoids, still have challenges in these two all-important democracy pillars. On Transparency International’s Corruption Index for 2011 of the 183 countries ranked, only 3 SSAfrica countries (Bostwana, Namibia, and South Africa) where mid-rank between 4.0-6 on TI’s upward 10 point scale of being good on anti-corruption efforts and perceived transparency in the public sector (http://bit/ly/AFcorrup). Transparency in the extractive industries remains one of the biggest issues. According to a April 25, 2012, report by U.S. auditing firm KPMG, bribery, theft and other kinds of fraud cost African governments and companies at least $10.9 billion in 2011 (NB: KPMG said it arrived at the figure after scouring English-language news reports and databases of fraud cases from 2011).

Ø Security – In some countries, security issues from political and resource-related conflict to transnational threats, to famine and drought are on the rise. These provide a fertile home for people with nefarious goals or for illegal goods such as drugs and narcotics. Porous borders and fragile institutions cannot adequately monitor these activities, but stronger regulations, customs and border institutions can help. On peace and conflict, we all must continue to create shared values to reduce tensions and resolve these issues – mutual respect and understand are part of the solution.

On the development end of the challenge scale are: poverty and all its elements such as lack of education and strong health services; tmore focus on youth and women; the need for the right kind of agricultural development (including improved use of water, land, and renewable energy); improvement in infrastructure, access to electricity and transport; and, regional trade

Ø Poverty -- For most Africans the macroeconomic pluses I noted above have not reached the masses as the majority of the Continent continues to live on $1.25 to $2.00 per day. According to the UN, despite sub-Saharan Africa’s economic growth, the increase in per capita has only been from 2.7 in 2011 to 2.8% in 2012. Thus, the Continent is not growing at sufficient levels to make a significant dent in poverty.  The minimum rate needs to be 3% per capita just to inch above the poverty line (http://bloom.bg/AFpoverty). The region’s growing population, high food and energy prices, the need for better access to basic and secondary education and good health services are key. There are reportedly 133 million young people in the region who cannot read. Youth and women are the most affected by poverty indicators, thus on every sector of development youth and women must be at the center.

All of these issues add to the negative indicators and poverty levels. Parts of the Millennium Development Goals (MDGs) for 2015 are to improve the lives of 50 percent of Africans living on $1.25 to $ 2.00 per day down to 29 per cent. With three years to go toward the MDG deadlines, we are not near these goals.

Ø Agriculture and Food Security are next on my list. According to 2011 World Hunger and Poverty Facts, of the 925 million hungry people in the world 239 million of those are in sub-Saharan, 26 per cent of this figure represents children (http://bit.ly/wldhunger). These are staggering numbers only outpaced by the Asia and Pacific region with 578 million people facing daily hunger. All this, despite the world’s ability to produce enough food to feed everyone according to FAO. Although there is a resurgence in the focus on agriculture by many African governments, past neglect in the sector over the last 30 years, by governments and international institutions, has helped lead to the current situation. Therefore the region has to play catch-up at the same time its population is growing at an enormous rate in parallel to rising food and energy prices.

Most of Africa’s poor who struggle with income disparity surely cannot manage these higher food prices. And, it is not just about food availability, but nutritional and adequate food amounts. 

Ø Improvement in rail, infrastructure (particularly electricity), and trade are next on the list. Connecting Africa both infrastructurally and with trade between and among nations are key to further sustainable development. Only about 1 in 4 Africans have access to electricity, intra-African trade is about 10 percent of total exports, and roughly 30% of the region has paved roads or working railways. (http://usa.gov/mccgdp).

Ø Employment and lack of job creation and education are fundamental to forward progress, but the emphasis may not need to be just on traditional jobs or traditional education, but on entrepreneurial opportunities, SME development, vocational training and capacity building programs alongside of traditional education. No donor today, in my view, focuses enough on vocational and entrepreneurial training, SME development or working vigorously enough with the African Diaspora.

This list is by no means exhaustive, but provide some things for you to think about as we all try to work together to address these challenges and create shared values to help move the region forward.

So What is The Way Ahead for 2012 and Beyond? 

I would argue that there are some key areas needing reframing and refocusing to spur along sustained, Africa value-chain contributions . . . for the Continent, and global community:

Ø SMEs -- Once such area is the need for more growth for Africa’s Small and Medium Size Enterprises (SMEs) which can help not only with job creation, and employment but will also help overall economic growth. The value, role and impact of SME development in Africa, particularly for women and youth cannot be underestimated, with figures for African women at more than 50 per cent of the total population and nearly 250 million African youth (ages 15-24) out of a potential population size of 1.9-to-2 billion by 2030 (http://bit.ly/AFyouthpop).

 I have said in the past on “The Africa Post” blog that SMEs have a development enterprise role in Africa that cannot be understated in helping to reframe issues on unemployment and future growth. According to reports there are only 30 million SMEs operating in region and that number needs to be much greater than this to keep pace with population and job and national development needs.

Ø  Agricultural makes both lists -- as a challenge and as a sector for the way ahead.  But the questions on the “way ahead ledger” for this sector are: what kind agriculture, focused on whom, and benefiting who? These questions must be part of reframing the sector. According to a 2010 report of the Global Horticulture Institute the majority of farmers on the Continent are small farm holders which FAO estimates at 36 million  (those with access to 2 hectares or less of land). Leading author D.S.C. Spencer (2002) notes that African small farm holders produce about 90 percent of the Continent’s agricultural output.

     The reason agriculture makes the “way ahead” list is that its potential to employ and create jobs for women and youth is enormous. Protecting small farm holders by using appropriate technology and encouraging them to form cooperatives to produce sufficient yields will be vital. This needs to be coupled with protecting more arable agricultural land from long term foreign leases (which are on the rise) and in some cases have little-to-no benefit to the surrounding communities. Keep in mind that there are only two regions of the world with remaining sufficient arable land and water resources – Africa and Latin America.

Ø The Private Sector -- The role of both the African and foreign private sectors can help with vocational training, capacity building and education as well as in investing more in development. Because in the long term, a developed Africa will help them as well.

Ø Innovative Public-Private Partnerships (PPP’s) – Having donors, the African and foreign private sectors, and the African Diaspora develop new PPP paradigms to spur development will also be important. [A good example of this is the African Diaspora Market Place project, or ADM (www.bit.ly/AFdiaspora). ADM is a new partnership which includes NGOs, a U.S. private sector company and its foundation, and USAID focusing strictly on helping and providing grants to Diasporan SMEs.

Types of PPPs also need to expand to include Public Sector-to-Public Sector -- meaning in-country public sector entities or ministries can cross-fertilize budget resources on synergistic projects.

For example, Housing and Power Ministries could combine parts of their budgets to provide affordable, energy-efficient housing. In this case, the African public sector entities are both donor and stakeholder. And, PPP‘s can include more donor-to-African sub-sovereign entities – meaning donor partnerships that are directed to states/districts/parishes with in a country, or toward municipalities, or community governments with good governance and good local leadership. Keeping in mind those partnerships also can include community in-kind contributions (http://huff.to/rsanders).

Ø Good Governance and leadership – Everyone has a responsibility to ensure that there is an improvement on these two fronts. This includes those living on the Continent wanting peaceful change and those in the international community as regards to who it supports and when. The recent elections in Senegal, in the end, proved that the voice and will of the people prevailed in the end to support their constitution. We saw fairly reasonable elections in a number of countries in 2011, but we need to reach a point where free and fair elections, respect for constitutional transitions are not the exception but the rule. 

Thus, we are in the early years of the 21^st Century. We need to reframe the discussion on Africa to reflect its multidimensional reality, but also create and define shared values on the way forward in 2012 and beyond.  I have provide some food for thought today on how and in what areas we can all work together to ensure that things improve as we reach the mid-way point of the Century while the Continent simultaneously reaches the 2 billion person mark. We all need to recognize that we play an important role in making the region a better place for the generations that follow. Thank You