UNKNOWN AFRICA. MYTH 2: Africa is poor and underdeveloped

Writer, journalist, Ph.D., professor at the University of Cambridge, author of the bestselling book How Asia works

UNKNOWN AFRICA. MYTH 2: Africa is poor and underdeveloped

Art design: huxley.media via Photoshop

The concept of a «stereotype» was introduced back in 1922 by American sociologist Walter Lippmann. Since then, humanity has repeatedly realized how difficult it is to step beyond the «picture in one’s head». Joe Studwell is one of the few who has managed to overcome the inertia of thought and build a bridge of understanding between cultures.

For more than 20 years, he served as the editor of China Economic Quarterly. His years of research resulted in the bestselling book The Asian Management Model (How Asia Works). Today, Studwell takes on an equally ambitious challenge: helping us understand how Africa works.

In an exclusive interview for Huxley, he debunks nine myths about Africa that persist in Western cultural consciousness. Let’s embark on an engaging and stereotype-free journey across the African continent with him.

t the start of Africa’s independence era, in the 1950s and 1960s, the continent was one of the poorest regions of the world. African economies grew through the 1960s and early 1970s before experiencing calamitous contractions to the end of the century. Poverty rates rose to the highest levels in the world.

In constant, inflation-adjusted, 2015 US dollars, GDP per capita in Sub-Saharan Africa in 1960 was US$1,142; it rose to US$1,517 in 1974 before falling back to US$1,187 in 2000. According to World Bank data — about which there is controversy — Africa made zero progress in escaping poverty over 40 years.

Since 2000, however, African growth picked up. GDP per capita in constant 2015 dollars in Sub-Saharan countries rose to US$1,581 by 2023. Poverty rates fell. The biggest driver of growth after 2000 was agriculture.

Africa’s population doubled since the turn of the century and, with modestly rising incomes, demand for food tripled. Food prices rose well ahead of general inflation and farmers started to grow more.

With more agricultural labour and more urban demand, since 2000 Africa’s agricultural growth rate rose to the fastest pace in the world, 4.5 percent a year. After centuries without change, yields for Africa’s staple crops increased by half.

Population growth is much of the reason for the improved economic performance, reducing the real cost of labour, creating markets for surplus production and producing dense urban settlements where public infrastructure is more affordable on a per capita basis.

On top of this, Africa, which was the world’s least educated continent in 1960, became a place where most people are literate and numerate and where an increasing number are highly educated. And, over 60 years, African states slowly built road networks to open up markets in what was the world’s most infrastructurally poor region.

By 2010, the number of African cities with more than one million persons reached 50; the count was forecast to be 93 in 2025. The urban population tripled between 1990 and 2020 as the total number of African cities increased from 3,300 to 7,600 — home to 500 million people.

This urban change created a new breed of wealthy peri-urban farmer. A recent survey in Ethiopia, in a rural district that supplied the capital Addis Ababa, showed that an irrigated hectare yielded US$2,500 a year with tomatoes, US$2,600 with green peppers, and US$3,500 with onions — compared to a Sub-Saharan African average of US$500 for non-irrigated land. In Kenya, irrigated plots supplying tomatoes to the market in Nairobi yielded up to US$13,000 a hectare.

By 2010, driven by demographic change, rural-urban food supply chains in Africa were moving five times more food to cities than in 1970. Some of the supply chains covered enormous distances.

One of the longest was the maize chain in Nigeria, which by the 2010s extended up to 1,000 kilometers to connect eight million smallholder producers in the north and center of the country with 160m consumers, mostly on the coast.

A large part of the maize trade was indirect because the grain went first to burgeoning fish and poultry farms to be used as feed and converted into animal protein that was then sold to a new urban middle class.

Agricultural growth spawned large African companies in agro-processing. The biggest firm in Tanzania, Bakhresa, bought up parastatal wheat, rice and maize mills in multiple countries beginning in the 1980s.

By the late 2010s, Bakhresa’s operations extended across eight nations in East and Southern Africa. The group diversified into consumer goods, transportation, petroleum products, television stations, real estate, and more. Agricultural processing and related businesses account for more than 50 per cent of manufacturing value added in most African countries.

As food processors consolidated, the first African supermarkets, which require large-scale suppliers, came into being. South Africa developed supermarkets beginning in the 1990s. After the turn of the century, Kenya, Zambia, Tanzania, Nigeria and Ghana followed. The supermarket share of food retailing in East and Southern Africa is still only 15 percent, but it is growing three times faster than local economies.

Another improving trend in Africa is the use of natural resources. In the first decades after independence, the continent was infamous for corruption surrounding natural resource extraction — in countries like Nigeria and Angola — and for civil wars over control of resources, from Sierra Leone to Sudan. Africa gained a reputation for wasting natural abundance. Since 2000, the situation has become somewhat better.

It is widely believed that Sub-Saharan Africa is a particularly resource-rich area of the world. But this is not the case. The World Bank publishes data for annual mineral, oil and gas rents as a share of GDP which averaged 10 percent in 2021, ahead of 6.1 percent in Latin America and the Caribbean but well behind 18.6 percent in the Middle East and North Africa region.

A political development that may spur the rise of manufacturing — by growing the addressable market — 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.

Looking further ahead, the African Development Bank forecasts that ‘most’ African countries will be Upper Middle-Income economies by 2060 — currently a per capita income over US$4,500. That will take Africa’s GDP to US$15 trillion, roughly where China’s is today.

Thus, although Africa is still poorer than other regions, its economy is slowly but steadily moving forward.