«HOW AFRICA WORKS»: Joe Studwell is Preparing to Release a New Book
Joe Studwell / Art Design: huxley.media via Photoshop
Joe Studwell, the author of the bestseller How Asia Works, is preparing to release a new book — How Africa Works. After his previous work was included in Bill Gates’ list of the best books of 2014, Studwell is now exploring the key mechanisms influencing the development of African countries. In an exclusive interview for Huxley, we spoke with the author about the challenges facing the continent and the prospects for its economic growth.
Many African nations were formed through colonial imposition rather than organic socio-political evolution. How do you see this shaping their present and future, particularly in economic development and governance?
Africa’s very low population density meant that when the colonists carved up the continent starting in the 1880s, it was a patchwork of more than one thousand ethnicities. Blending those groups together into nation states — there are now 54 nations — is a long-term process. But it can be speeded up with good political governance, as Julius Nyerere showed in Tanzania.One interesting facet of ethnic diversity in Africa is that the continent features more democracy at this level of development than did Europe or Asia. Elections are often important in taking the heat out of ethnic division. In Ghana, for instance, which had coups in 1966, 1972 and 1979, a stable democratic system subsequently took root and shows no signs of fragility despite recurrent economic crises.
Overall, artificial borders and continuing ethnic fragmentation are a drag on African development because human progress depends on cooperation. However, after peaking in the 1980s and 1990s, violent conflict has decreased and I would expect that to continue, making the faster growth that occurred since 2000 endure.
The biggest conflict issue today is across the Sahel and that is a very particular problem in one of the poorest regions with the least educated population that is not at root a national or ethnic conflagration.
In your opinion, how should African countries structure their relationships with the world’s leading economies to foster economic development while avoiding dependency traps?
For African nations, relationships with major global economies are mainly about two things: access to markets and aid. The African relationship with the US and the EU is already established as quite a generous one in manufacturing. The US African Growth and Opportunity Act (AGOA) and the EU Everything But Arms (EBU) programme offer most African countries tariff-free access for most manufactured goods.
The main problem here is an African one — that countries manufacture very little and account for only 1.3% of global manufactured exports. There is some evidence, in some places, that this may change.
It is in agriculture that Africa needs to lobby and negotiate as a continent for easier access to rich-country markets. The US and EU place heavy tariffs on many agricultural products that African countries could export, mainly to protect their farmers from competition.
Africa would probably be better off having its international aid cut to zero if it were in return for tariff- and quota-free access for its agricultural output. Agricultural tariffs are a huge barrier to poor nations exporting their way out of poverty.
There is a related problem for Africa’s resource exports, particularly minerals. All OECD states impose tariffs on processed mineral and hydrocarbon imports — everything from copper wire to aluminium sheet to fuels. They do not impose tariffs on most raw minerals and all unprocessed oil.
Consequently, resource-rich African countries are fiscally incentivised to stick to volatile raw mineral and hydrocarbon exports and stay away from less price-volatile processed goods whose manufacture would create desperately-needed jobs, not to mention technological learning.
Africa’s aid relationships are much more country by country. Although we are in a time where President Trump has made massive cuts to US overseas aid, and in Europe the UK and France have made big cuts, there is still money to fight for. Some of it comes from private philanthropic groups whose resources sometimes rival those of states — the Bill and Melinda Gates Foundation, for instance.
All givers of aid want the same thing: to see projects delivered on time and in budget. Where that has happened in Africa — in Botswana, Mauritius, Ethiopia and Rwanda — the recipient countries were given aid far in excess of what states with similar GDP per capita get. So I think there is money available if African governments focus on building a reputation for delivery.
How do you think Africa can balance modern economic growth with its own rich traditions and cultural values, rather than simply adopting Western models?
African cultures are strong and economic growth means there is more money to pay for cultural output. There is fantastic music, film and modern art coming out of Africa. The biggest popular cultural development is perhaps the boom in locally-based processed food production and restaurants as hundreds of millions of Africans now have small disposable incomes which they spend in that way.
Would a European Union-style federation help Africa’s economic development? Given Africa’s political and economic diversity, how feasible is such a project?
Pan-Africanism as a concept has been around for more than one hundred years and had post-independence evangelists among African leaders. Kwame Nkrumah of Ghana and Julius Nyerere of Tanzania were advocates of Pan-Africanism. The original intellectual input came mostly from Black Americans and, in my personal view, was an exercise in fantasy.
Most African states were very new at independence and struggled even to get their domestic affairs in order. The chances of effective collective action at a continental level were zero.
The Organisation of African Unity (OAU) was created in 1963 with 33 members. It was pretty ineffective. However, the African Union (AU), launched in 2002 to replace the OAU has earned a better reputation.
In part this was facilitated by the end of the Cold War and the maturation of African politics. The AU focused more narrowly on peacekeeping and security, and on economic development.
The most ambitious AU project to date is the roll-out of the African Continental Free Trade Area (AfCFTA). Although formally operational from 1 January 2021, full implementation is planned to occur over 15 years, with the elimination of 97 percent of all African tariff lines.
As of 2022, eight countries — Mauritius, Tanzania, Rwanda, Kenya, Cameroon, Ghana, Tunisia and Egypt — were in a pilot programme. The inclusion of all 54 African states in the AfCFTA treaty reflects a new level of political will to seek gains from trade integration.
The World Bank forecasts that the AfCFTA — if substantially implemented — will increase exports by US$560bn a year by 2035. This agreement has the potential not only to expand intra-continental trade but also to strengthen Africa’s position in the global economy.
My expectation is that the AU will be quite successful in moving economic integration forward in Africa. Africa does need unity at the economic level because it will be a huge combined market.
The next ten years will be the hard part because individual states lose out in the short-run by reducing tariff and non-tariff barriers. But the gains will, I think, become clear and move the process forward.
As to long-term political integration, that is anybody’s guess. It is possible — as it has been in Europe — but it is also extremely difficult. And, just now, we live in a time where societies are fragmenting rather than the opposite.
In The Asian Economic Model (How Asia Works), you describe Wolf Ladejinsky, a Ukrainian-born agrarian reformer, as the «godfather» of economic reforms in Asia, particularly in Japan, Taiwan, and South Korea. Do you see a comparable «godfather» figure for economic reforms in Africa?
Ladejinsky wasn’t quite the godfather of all Asian economic reforms. He was the critical person who made land reforms happen, and managed the detail, in Japan, South Korea, Taiwan and — too late in the 1970s — South Vietnam. From agricultural change and growth was born all other economic transformation
Ladejinsky was able to do extraordinary things because he worked in the context of the Second World War, and temporary US rule over Japan and South Korea, and hegemonic influence over Taiwan and South Vietnam. There is no equivalent situation in Africa, so I would not expect any similar character to emerge.
That said, there will be, and have already been, great leaders at the national level who create important demonstration effects for the rest of the continent.
- Julius Nyerere as a great healer of ethnic division in Tanzania;
- Seewoosagur Ramgoolam in Mauritius and Seretse Khama in Botswana as creators of multi-ethnic developmental coalitions that yielded great results
- Meles Zenawi in Ethiopia and Paul Kagame in Rwanda as single-minded developmentalists in the East Asian tradition.
Africa needs more such people and I believe they will emerge. Some people think Patrice Talon in Benin could be such a leader.
In this book, you emphasize the role of land reform, export-oriented industrialization, and financial regulation in the economic success of East Asia. How applicable are these strategies to the African context?
Everything I have read and seen in Africa suggests that the same policies are the ones to produce rapid development there. Of course, there are local adjustments and constant improvements, as there were between Asia — where development came later — and Europe and north America.
The challenge in Africa is the contextual one: the demographic story (which has changed a lot in the past 50 years, for the better), the colonial legacy (economic as well as political), the ethnic fragmentation.
All I can say is that, in my experience, the people are great and there will likely be some pleasant surprises.
From the Editors: This interview has become the starting point for our new series of publications — nine essays on the myths and stereotypes about Africa. In them, Joe Studwell debunks long-standing perceptions of the continent and reflects on what truly shapes its future.
