1 Current Path 1 Current Path

Contact at AFI team is Jakkie Cilliers
This entry was last updated on 24 August 2022 using IFs v7.63.

In this theme, we present the context that informs Africa’s likely current development trajectory – the Current Path – to set the scene for the ambitious improvements that could be possible across 11 sectors to 2043, modelled and discussed in subsequent themes.

Summary

  • Although some health indicators show that Africa is experiencing a broad-based improvement in human well-being, general development progress here is slower than in other developing regions. 
  • However, if Africa could have talked itself into a higher level of development it would be doing very well. But only rarely do the many plans and visions translate into reality. These range from the 1980 Lagos Plan of Action to Agenda 2063
  • Africa remains dependent on commodities instead of restructuring its economies to more productive sectors, which is eroding its resilience against the impact of unforeseen events such as a global pandemic and fuelling its recurring debt challenge.
  • Africa will miss many targets of the Sustainable Development Goals by a large margin, and the impact of differentiated poverty lines is that the extreme poverty rate in Africa will be 44% in 2030, and 33% in 2043. 
  • Africa needs to realign its economies to become more productive, especially leveraging the benefit of a large and growing labour force.

Africa – progressing slower than the rest of the world

In 1960, generally considered the start of the post-colonial era, gross domestic product (GDP) per capita in Africa was about half of the average in the rest of the world. More than half a century later, in 2019, the year before the COVID-19 pandemic upended things, GDP per capita in Africa had declined to only 26% of the average in the rest of the world. It will likely remain at this mediocre level for the next two decades. As shown in Chart 1, the gap is forecast to increase towards 2043.

Although GDP per capita is a blunt measure of development progress (and often comes in for criticism because it does not take quality of life or the distribution of economic output among the population into account), it remains popular given its simplicity and reliance upon readily available data. It also allows for easy comparisons between different countries. 

The general dismal trend for Africa obscures large country variations. Some countries, such as the Democratic Republic of the Congo (DR Congo) and Zimbabwe, have seen a generational loss of wealth and prosperity. In contrast, Botswana’s current GDP per capita is 20 times larger than it was in 1960 and Equatorial Guinea has similarly seen an ostensibly large increase in GDP per capita due to its oil wealth, although the average obscures the fact that much of it accrues to a single family and their associates. And the impact of COVID-19 is such that the continent is only likely to recover to the 2019 pre-COVID average towards the end of 2024 – shocks that have now been amplified by the fallout from the war in Ukraine.

These differences aside, the increasing divergence between the trend in GDP per capita in Africa versus the average for the rest of the world correlates with many other indices of human development or well-being, such as average levels of education and various measures of health. Global events, such as the 2007/08 financial crisis, the 2020/21 COVID pandemic and Russia’s invasion of Ukraine have significant impacts, particularly in poor countries where people live precariously.

The challenge of the growing divergence between Africa and the rest of the world is reflected in Africa’s marginal role in the global economy (Chart 2). In 1960, Africa accounted for 3% of the global economy. Sixty years later that share remains unchanged, despite Africa’s share of the global population having almost doubled: from 283 million (9% of global population) to 1.34 billion (17% of global population). By 2047, Africa’s population will likely account for a quarter of the world’s (2.4 billion out of 9.6 billion), but the continent will then still represent less than 6% of the global economy. 

Compare this to East Asia [1Consisting of China, Hong Kong, Japan, North Korea, South Korea, Mongolia and Taiwan.], a region that increased its share of global economic output from about 9% in 1960 to more than 25% today and is set to increase that portion to 31% by 2047. East Asia’s share of the global population, however, has shrunk from 27% in 1960 to 22% in 2020 and will decline to below 17% by 2047, pointing to its much more productive economies.

We therefore find ourselves in a situation where things are improving in Africa but the continent is progressing slower even than other comparable developing regions such as South America [2Consisting of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela.] and South Asia [3Consisting of Afghanistan, Bangladesh, Bhutan, India, Iran, Maldives, Nepal, Pakistan and Sri Lanka.].

Something drastic is needed to change this rather dismal forecast. Doing more of the same is not going to lead to tangible progress. A number of health indicators, such as declining rates of infant mortality, improvements in life expectancy and so on, show that Africa is experiencing a broad-based improvement in human well-being and is even catching up with global averages to some extent. 

However, looking at the bigger picture, one can argue that this is largely because rapid improvements at lower levels of development are easier to achieve while continued improvements in rich countries are more difficult at their much higher levels. Progress is rapid until countries reach a saturation effect and the last 10% is always the most difficult. On most other indicators of well-being, the gap between Africa and the rest of the world is either static or increasing.

This website models and presents Africa’s likely development trajectory (the Current Path) and the potential for ambitious improvements across 11 sectors to 2043. Each is included as a theme in the navigation structure of the website, namely more stability; getting more rapidly to a demographic dividend; better health and basic water/sanitation infrastructure; an agricultural revolution; more and better education; a low-end manufacturing growth path; leapfrogging; implementation of the African Continental Free Trade Area; investments in bulk infrastructure; levering more inward financial flows; and more inclusive and accountable governance. The Combined Agenda 2063 theme combines these 11 scenarios to provide a likely ceiling or upper limit of Africa’s development potential. We also review the impact of each scenario on jobs, carbon emissions/climate change and Africa’s relative power and influence in separate themes. 

We use 2019, the year before COVID-19 spread globally, to compare levels of development and then model each scenario from 2023 to 2033, reviewing the impact by 2043, i.e. the end of the third ten-year implementation plan of Agenda 2063.

In addition, we apply each of these scenarios to each of 54 African countries (the IFs forecasting platform does not include separate date for Western Sahara, the 55th member of the African Union), to Africa’s five regions (Southern, West, Central, North and East Africa) and to the eight regional economic communities recognised by the African Union, as well as Africa’s country income groups as defined by the World Bank. 

For more information on the modelling platform and the scenarios go here.

Over the last two centuries, the world witnessed a transition to levels of peace and prosperity that are almost unimaginable by historical standards. We often do not realise exactly how recent this progress is. 

The improvement in well-being that followed the Industrial Revolution came off a very low base but it transformed the economies of Europe and North America to the extent that these nations overtook China to emerge economically and politically dominant globally. Eventually, inequality between and within countries also increased, a trend that decelerated somewhat between the two World Wars and only stabilised after 1950 when growth in Europe and the US slowed, coinciding with more rapid economic growth in Japan, East Asia and eventually China. Even at that point, 1950, three-quarters of the world’s population lived in what we today would term extreme poverty. [4F Bourguignon and C Morrisson, Inequality among World Citizens: 1820–1992, American Economic Review, 92:4, 2002, 727–28]

During the first half of the previous century rates of poverty declined even as global populations continued to increase. Then, from around 1970, the decrease in poverty rates became so rapid that we saw the absolute number of people living in extreme poverty also starting to fall, despite the huge increase in global population, largely as a result of capitalism and the expansion of trade – developments that we often consider synonymous with globalisation and a neoliberal phase of economic development.

Until the early 1990s, the number of extremely poor people hovered at just below two billion people (around 37% of global population) but, from around 1994, it declined precipitously, mostly because of rapid progress in China and, to a lesser extent, in India. The remarkable progress in China since 1978 transformed a rural, centrally planned economy, into the most dynamic and largest in the world, now generally referred to as a socialist market economy. China’s success is such that it has come to challenge Western, neoliberal orthodoxy. 

By 2015, the number of Chinese living below US$1.90 per day was less than 1% of its population. It had been above 80% in the 1980s. The remarkable improvements in income growth on the back of rapid economic growth [5G Wu, Ending poverty in China: What explains great poverty reduction and a simultaneous increase in inequality in rural areas?, World Bank, 19 October 2016] were possible because China’s autocratic political system allowed its government to undertake social engineering that would be unthinkable in a more democratic Africa. It could also do so on the back of a cadre of dedicated and efficient civil servants, drawing upon the Confucian tradition that Imperial China built up over centuries. Inequality in China has, however, steadily increased as the country has grown more wealthy. 

India, a diverse, fractious and loud democracy, also contributed to poverty reduction, if at a slower rate. Whereas almost 60% of India’s population were considered extremely poor in the 1980s, that number had come down to about 14% by 2015.

The improvements have been so fast that in 2005 the international community was emboldened to adopt a target to halve extreme poverty by 2015 as part of the Millennium Development Goals. When that was met, an even more ambitious goal, to end extreme poverty by 2030, was adopted as Goal 1 of the Sustainable Development Goals (SDGs). Technically this means that less than 3% of the population of every country in the world should be living in extreme poverty, using an average income of US$1.90 per person per day as a benchmark. Whereas China met the SDG goal of eliminating extreme poverty in 2013, India will likely get there by around 2034. [6In May 2022, the World Bank adjusted the US$1.90 measure from 2011 prices to US$2.15 in 2017 prices, discussed in more depth later in this theme. However, the associated data is expected only in 2023.]

The situation and prospects in Africa are less impressive.

Because of Africa’s rapid population growth, modest rates of economic growth and relatively high levels of inequality, the absolute number of extremely poor people in Africa has steadily increased since 1960 and is likely to continue to do so for several years before slowly starting to decline. However, since the early 1990s, the percentage of people living in extreme poverty in Africa has started to decline. The reason is that even though economic growth on the continent slowed after the 2007/08 financial crisis and contracted sharply in 2020 owing to the COVID-19 pandemic, it has generally been robust enough to reduce the portion of Africans living in extreme poverty but not enough to reduce the absolute number. 

Even before the recent war in Ukraine and associated food supply and global growth implications detracted from current prospects, it was already clear that Africa will miss the SDG goal of eliminating extreme poverty by 2030 by a very large margin. In this, the widening gap between Africa and the rest of the world again becomes painfully clear. Things are improving in Africa but much slower than in other regions and, in the wake of the COVID-19 pandemic, progress is bound to be even more modest than before. Actually, by 2030, the Central African Republic, Liberia, Burundi, Madagascar, Mozambique, South Sudan, Somalia, the DR Congo, Guinea Bissau and Sierra Leone are all likely to still have more than 50% of their populations living in extreme poverty.

Globalisation and the sense of relative deprivation

From this high-level perspective, the world has generally become much more prosperous and slightly less unequal. The main reason is that developing countries – China and India in particular – have narrowed the income gap with richer countries since the 1980s. 

Globally, the period of globalisation after the end of the Cold War appears to have seen a convergence among a group of rich states, the stagnation of middle-income countries and a convergence (or stagnation) among poor countries. Also, wealth is shifting from West to East as middle-class Westerners have seen less income growth than their (comparatively poorer but more populous) Asian counterparts. 

It is as if hyper-globalisation reached a tipping point with the 2007/08 global financial crisis, which temporarily turbo-charged income inequality within and between countries. [7R Sharma, The Rise and Fall of Nations - Ten Rules of Change in the Post-Crisis World. New York: Penguin Random House, 2016, 5; B Milanovic, The World is Becoming More Equal - Even as Globalization Hurts Middle-class Westerners, Foreign Affairs, 2020, September/October, 1–2.] These trends have accelerated in the wake of the COVID-19 pandemic, as advanced economies (and a few emerging markets) recover faster than developing countries, in part because of better access to vaccines. In 2020, the economic contraction associated with COVID-19 probably saw about 91 million additional people classified as extremely poor compared with pre-COVID-19 forecasts – a third of them being African. [8Updated from J Cilliers et al, Impact of COVID-19 in Africa: A scenario analysis to 2030, Institute for Security Studies, 12 July 2020] The youth, low-skilled individuals and those active in the informal sector are also disproportionately affected by the pandemic. In the words of the head of the International Monetary Fund (IMF): ‘The convergence between countries can no longer be taken for granted.’ [9K Georgieva, The great divergence: A fork in the road for the global economy, International Monetary Fund, 24 February 2021]

It is important to recognise that the distribution of wealth among the global population is substantially more unequal than the distribution of income, which is again more unequal than the distribution of consumption. For example, in the Group of Seven (G7) countries, the share of wealth for the top 1% is at around 27%. Typically, men earn more than women, even in these countries, although the gap is narrowing. [10K Georgieva, The great divergence: A fork in the road for the global economy, International Monetary Fund, 24 February 2021]

The numbers and percentages may tell one story, but our interconnected world and access to information seem to have intensified a sense of relative deprivation among large swathes of the global populace, from India and China to the American Midwest and Afghanistan. It is particularly evident in Africa. 

Initially, the 2007/08 financial crisis led to anti-establishment protests such as the “Occupy Wall Street” movement, although with important regional variations. Financial benefits seem to be flowing to small urban elites, financial institutions and a handful of large corporations while little changed for the middle class. In almost all countries with data on income distribution, income is increasingly concentrated among top earners – the poor (and often the middle class) are not doing very well, while the rich are getting richer. [11For example, see: United Nations Department of Economic and Social Affairs, Income inequality trends: The choice of indicators matter, Social Development Brief #8, December 2019] The political impact of middle-income disenchantment has most prominently seen the rise of populist political parties and leaders in the West, perhaps best reflected by the election of Donald Trump to president of the US to eventually serve for a single term.

The sense of absolute and relative deprivation – actual improvements in living standards being vastly out of kilter with expectations – is on the rise. In fact, although people in high-income countries have never enjoyed a better living standard (leaving the impact of the COVID-19 pandemic aside for the moment), they seem to feel particularly insecure, scared that they will not be able to maintain their standard of living and that migrants from poor countries will somehow overwhelm them. The result is a rise in developed world identity politics (or nationalist populism) [12R Kozul-Wright, The Trade and Development Report 2017. Beyond austerity: Towards a global new deal, New York: United Nations Conference on Trade and Development, 2017.]. All reflect a view, for different reasons, that the current political system dominating in the West and the neoliberal model of globalisation has not generally managed to hold the fort against special interests. 

Recent literature, both academic and more popular in nature [13See T Piketty, Capital in the Twenty-First Century, Harvard University Press, 2018; Also: P Collier, The Future of Capitalism: Facing the New Anxieties, Allen Lane, 2018; D Moyo, Edge of Chaos: Why Democracy is Failing to Delivery Economic Growth and How to Fix It, Little Brown, 2018.], all seek either to reform capitalism or democracy or both, even as dedicated pro-business magazines such as The Economist flailed around in their efforts to question the data and associated research findings [14The Economist, Inequality could be lower than you think, 28 November 2019] while a steady drumbeat of reports from the UN and advocacy organisations underline the extent to which increases in wealth today largely accrue to the rich. [15For example, see: United Nations Department of Economic and Social Affairs, Income inequality trends: The choice of indicators matter, Social Development Brief #8, December 2019; Oxfam, The Commitment to Reducing Inequality Index 2018, October 2018] In the US, tax rates for the super rich declined precipitously under the presidency of Donald Trump, so much so that even the beneficiaries, the billionaires’ club, questioned the extent to which they benefit. Globalisation in its recent format is clearly generating inequality and insecurity rather than lifting all boats.

The interplay between inequality and growth

Economic growth and income distribution are the two key variables when forecasting rates of poverty at a national level. In general, higher rates of economic growth are strongly associated with higher rates of poverty reduction, but high levels of inequality limit the extent to which that can occur. If too large, inequalities of wealth, income and consumption constrain economic growth. They hinder educational opportunities, human capital formation and intergenerational mobility. A growing economy must, in particular, increase the number of formal-sector jobs and the amount of money in circulation to provide more revenues to government to invest in infrastructure, health and education (and hence improve the quality of its human capital), as well as for use in more direct measure of poverty alleviation such as social grant programmes.

The most widely used measure to express income distribution is the Gini index, which ranges from 0 to 1. A score of 0 corresponds to complete equality (i.e. everyone earns the same), whereas 1 represents complete inequality (i.e. all the income accrues to only one person in society). Being a summary measure of income distribution, Gini does not identify whether a change in inequality is triggered by shifts at the bottom, middle or top of the income distribution. In addition, it is based on survey data that is often not well suited to capture very high or very low incomes, a challenge that is particularly acute for many developing countries, which generally do not have much information on income distribution.

These limitations aside, when comparing regions according to the Gini index, North Africa is significantly more equal than any other African subregion (Chart 3), largely a function of the central role that the state played in providing all kinds of services and subsidies, often on the back of oil or gas income. Southern Africa is the most unequal region globally. Central, West and East Africa are somewhere between Southern and North Africa. [16The IFs forecast on poverty levels uses the average levels of income and a log-normal distribution as indicated by the Gini index. However, as the internal calculation using those variables will almost inevitably produce a rate of poverty at odds with those provided by national surveys, the system computes an adjustment in the first year for the subsequent forecast years.]

Inequality is a complex phenomenon, well illustrated by the Freedom and Dignity Revolution (the Tunisian name for the so-called Arab Spring or Jasmine Revolution) occurring in North Africa, despite its relatively low levels of inequality. [17North Africa has relatively high levels of education compared with the rest of Africa and scores higher on almost all indicators of human development than sub-Saharan Africa.]

The promise of the Arab Spring has not alleviated the deep sense of frustration among the citizenry. [18S Kwasi, J Cilliers and L Welborn, The rebirth – Tunisia’s potential development pathways to 2040, Institute for Security Studies, 31 August 2020] Tunisia is the only country in North Africa that has transitioned to democracy but the progress in education, women’s rights and general positive macroeconomic indicators since independence several decades ago conceal deep frustration in a populace weaned on large state subsidies of petrol, water, food and a vast array of state-owned enterprises that consume large amounts of revenue, fuel corruption and limit opportunity. Political, social and economic opportunity is constrained by special interest groups that confine the vast majority of the population to dependence. It is no surprise that frustration continues to simmer, and, with little economic growth expected, the potential for violent disruption is increasing.

These concerns and caveats aside, countries with low levels of inequality, such as Ethiopia, a developed bureaucracy and deep sense of nationalism, can generally grow rapidly and translate that growth into extraordinary reductions in poverty until, of course, its ethnic divisions rise to the fore, as happened in Tigray in 2020. Much more is required than economic growth, of course. [19P Edward and A Sumner, The Future of Global Poverty in a Multi-Speed World: New Estimates of Scale and Location, 2010–2030, Center for Global Development, Working Paper 327, 2013.]

For example, since the early 1960s Botswana has consistently grown its economy more rapidly than Ghana and did so until very recently. The average growth rate for Botswana from 1961 to 1999 was 10.1% whereas for Ghana it was only 2.5%. But because Botswana has higher levels of inequality (Chart 4), poverty reduction in the two countries does not differ as much as expected. [20By about 19 percentage points] From 1970 to 1996, poverty in Botswana had come down by 25 percentage points but by 14 percentage points in Ghana (using the US$1.90 poverty line).[21In 1970, Botswana still had an average GDP per capita that was US$1 246 below that of Ghana. Within four years, average income levels in Botswana surpassed Ghana’s and, by 1999, GDP per capita in Botswana was four times higher (US$7 167) than in Ghana.] Clearly, growth matters, but so do levels of inequality and considerations such as the effectiveness and quality of government. Whereas Botswana is generally an island of stability and good governance in its region, Ghana has suffered from a series of coups, significant political instability and high levels of corruption for much of its independent history. 

Chart 4 presents the Gini index for each African country in 2015, arranged by region.

Efforts to ignite development in Africa: 1980 to 2063

If Africa could have talked itself into a higher level of development, it would be doing very well. But only rarely do the many plans and visions translate into reality. These range from the 1980 Lagos Plan of Action for the Economic Development of Africa to Agenda 2063, the current long-term development vision of the African Union (AU). Today, these ambitions extend to regional level. For example, the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS) have each embarked upon a Vision 2050 process. 

Although the decolonisation of most of Africa had largely been completed by the 1960s, outside influence on African development trajectories had not ended. By the 1970s, Africa had hosted numerous proxy wars sponsored by the opposing sides of the Cold War and former colonial overlords and had also suffered from the oil and debt crises in which it did not have representation. Southern Africa was particularly challenged. Portugal still retained its various colonies, such as Angola and Mozambique; Namibia was under the control of apartheid South Africa, which, in alliance with Rhodesia under Ian Smith, violently resisted efforts at majority rule. In an effort to regain agency in the face of externally imposed constraints to economic and political development, African countries agreed in 1980 to implement the Lagos Plan of Action. The intention was, in large, to establish a self-reliant regional African economy, with greater independence from the global economy and ultimately to establish an African Economic Community. [22United Nations Economic Commission for Africa, Appraisal and review of the impact of the Lagos Plan of Action on the development and expansion of intra-African trade, UNECA Conference of African Ministers of Trade Meeting, 11th session, 15–19 April 1990, Addis Ababa, Ethiopia, 1991; FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.]

The Lagos Plan of Action was arguably a pan-Africanist response to the economic problems of Africa, with the underlying assumption that Africa’s economic problems arose primarily from the structure of the international economic system, and thus that independence from this system was the answer. The counter-argument was that Africa’s economic problems arose primarily from the internal structures of their economies, as well as ineffective and corrupt governance structures. This would subsequently inform the Bretton Woods Institutions’ conceptualisation of the structural adjustment programmes. [23FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.] Accordingly, the World Bank and the IMF – the two global financial institutions mandated to respond to under-development – created loan packages for highly indebted poor countries that required them to reduce spending on health and education in favour of debt repayment and the liberalisation of the economy through privatisation and other means. 

These measures were not new. The World Bank and the IMF had been attaching conditionalities to their loans since the early 1950s and their policy prescriptions inevitably closely aligned with the free-market economics dominant in the US, where their secretariats are located and who is the largest contributor to both. 

In return for budget and balance of payments support, the Bank and the Fund required African governments to adhere to an agreed set of policy reforms geared towards achieving macroeconomic stability. Perhaps the most significant impact of these structural adjustment programmes was the devaluation of many of Africa’s overvalued currencies to more reasonable levels. But it also included other requirements, such as for capital account liberalisation, which has subsequently facilitated illicit financial flows along with the influx of multinational companies.

The negative impact on health, education, poverty and agriculture would resonate for many years and earn both institutions the enduring enmity of many Africans in what has been described as an effective ‘race to the bottom’ [24For example, see: A Shah, Structural adjustment—a major cause of poverty, Global issues, 2013]. The associated reforms impacted painfully on large populations in the recipient countries and offered African leaders and activist academics a ready target in externalising the reasons for slow development. 

The conditionalities, generally known as the Washington Consensus, put an effective end to national industrial policies that countries as diverse as Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Senegal and Tanzania had tried to implement, albeit with limited success. Consequently, industrialisation as a development option for Africa was replaced by trade liberalisation, deregulation, the free market and a small state. The Washington Consensus shifted the development framework away from the state as main engine and instigator of growth to a reliance on markets and the private sector for resource allocation. The role of the state subsequently became limited to policymaking and regulatory functions, based on many African states’ inability, in the view of the Bank and the Fund, to effectively deliver public goods and limit the abuse of funds. 

Whereas development elsewhere had been facilitated through an active role for the state, including clear industrial policy, the corruption and mismanagement by African governments now presented the continent with an impossible situation. It had to develop without the guiding hand of the government and depend on the benefits of trade liberalisation at an early stage of development. The inevitable results – lack of industrialisation, poor growth and unequal development – soon become clear.

Unable to rapidly improve productivity and with a fast-growing and youthful population, per capita average income levels in Africa peaked in 1980 and declined to 1994 as trade shocks and economic crises took their toll. The percentage of people living in poverty in Africa followed suit and steadily increased.

As these initiatives were unfolding, the United Nations Secretary-General, Javier Pérez de Cuéllar, appointed the World Commission on Environment and Development in 1983, also known as the Brundtland Commission. 

The purpose of the commission, named after its chairwoman, Gro Harlem Brundtland, former Prime Minister of Norway, was to chart and agree on a common sustainable development pathway at a time of deep pessimism about the environment and Africa’s development prospects. Its report, titled ‘Our Common Future’ and released in October 1987, popularised the notion of ‘sustainable development’ by establishing a clear relationship between economic growth, the environment and social equality, and eventually led to the 1992 Earth Summit in Rio de Janeiro, Brazil. 

The Brundtland Report, and the broader context within which the debates around poverty occurred, also had a wider impact. Among others, it led to deep introspection by the World Bank and the IMF about the effectiveness of their structural adjustment programmes. 

From 1989 onwards, the focus of development assistance from the West – which a number of African states had become addicted to – had shifted to the importance of democracy, good governance and anti-corruption as part of the efforts to correct some of the egregious misuse of public money and abuse of power by many African governments.

Africa’s (Western) development partners subsequently invested in civil service reform and efforts to improve public financial management, and helped to set up anti-corruption watchdogs and public audit bodies. Multiparty elections, decentralisation and other methods to encourage greater citizen participation were equally popular. In the process, democracy became associated with liberal economic policies that envisioned a small state and a dominant role for the private sector, trade and open markets in development. The problem is that poor countries need an activist, developmental state if they are to engineer an escape from poverty. 

By 1999, the IMF had replaced its structural adjustments programme with the Poverty Reduction and Growth Facility and placed poverty alleviation at the heart of its efforts. The following year, the World Bank admitted that the poor are better off without structural adjustment. [25W Easterly, The Effect of International Monetary Fund and World Bank Programs on Poverty, Open Knowledge Repository, Working Paper (No 2517), 2001] Writing for the African Development Bank, John Page notes that ‘structural adjustment had taken place without producing structural change’. [26African Development Bank Group, 2017, Introductory remarks: Promoting sustainable industrial policies, in Industrialize Africa: Strategies, policies, institutions, and financing. Côte d'Ivoire: African Development Bank Group, 74.]

The Lagos Plan of Action

The Lagos Plan of Action had similarly failed to produce results. At a 1991 meeting of African Ministers of Trade at the UN’s Economic Commission for Africa (UNECA), the participants noted that African governments had largely failed to incorporate the plan in their national development frameworks and that it lacked effective monitoring and follow-up mechanisms for its implementation. Similarly, regional schemes aligned with the plan found little success, as the various regional economic communities all lacked supranational authority to monitor or enforce compliance with the plan or related instruments. The meeting lamented the failure of African economies and trade systems to modernise and noted that there remained a need to remove intra-African trade barriers. [27United Nations Economic Commission for Africa, Appraisal and review of the impact of the Lagos Plan of Action on the development and expansion of intra-African trade, UNECA Conference of African Ministers of Trade Meeting, 11th session, 15–19 April 1990, Addis Ababa, Ethiopia, 1991; FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.]

The Lagos Plan of Action required a commitment to regional cooperation, the appetite for which disappeared shortly after it was adopted. Rolling economic crises in the 1980s and a reliance on tariffs for a good part of government revenue spurred intra-Africa trade protectionism. Furthermore, the implementation of the structural adjustment programmes provided African governments with easier access to finance than the more abstract and difficult-to-realise benefits of continental cooperation offered by the Plan, while undercutting its ‘collective self-reliance’ intentions. [28FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.]

Between 1980 and 1990, Africa lost considerable ground – in development terms it was actually moving backwards. Average income per person decreased by about 12% and declined by a further 2% in the early 1990s. 

The Lagos Plan of Action was followed by the Abuja Treaty, signed in 1991. The Abuja Treaty aimed to reconcile pan-Africanist development ambitions with the liberalisation orthodoxy of the time, moving away from the focus on market integration in favour of collaboration, expansion and diversification of production across regions. Although Abuja inspired marginal reforms in some of the continent’s regional economic communities and led to the establishment of an African Economic Community (AEC), which seemed like an improvement on the Lagos Plan, it faced similar challenges, including reluctant cooperation from member states and subsequently also failed in its ambitions. [29FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.]

Eventually, it was the commodities boom, not its own planning, that changed Africa’s prospects. From 1994 until 2008 (when the financial crisis hit), Africa experienced its most sustained period of growth since independence in the 1960s – an average of 4.6% per annum. During this period, the average per capita income increased by 35%. However, the share of Africans living in extreme poverty decreased by only about five percentage points, in part owing to the high levels of inequality on the continent and rapid population growth.

Sustainable development and Agenda 2063

The impact of the Brundtland Report and the Earth Summit continues to resonate several decades later, first with the eight Millennium Development Goals (MDGs), adopted at the UN Millennium Summit in 2000, and more recently with the Sustainable Development Goals 2030 (SDGs), adopted by the UN General Assembly in 2015. 

An important tool for assisting in achieving this vision of sustainable development was international cooperation and solidarity, including the provision of overseas development assistance (aid). However, instead of increasing (when measured in constant dollars), aid levels steadily declined from their peak in 1990 to the Millennium Summit in New York a decade later. Kenya, Somalia, Sudan and the former Zaïre (now the DR Congo) experienced some of the largest declines. 

One of the reasons for this was a prolonged recession that began in Japan in 1991, a major aid provider. A second reason was the resource pull exerted by transition economies in South Asia, which was steadily diverting attention away from Africa. But the most important reason was that the dissolution of the Soviet Union freed Western countries from the need to prop up African dictators as part of the efforts to confront the Soviet bloc in Africa during the Cold War. With the collapse of the Berlin Wall, Africa lost much of its previous geostrategic relevance and hence the external motivation to assist. 

Aid only started to regain momentum with the 2000 UN Millennium Summit in New York. It was substantially bolstered by the support of international celebrities such as Bono and Bob Geldof, who campaigned for greater awareness about poverty and the acquired immunodeficiency syndrome (AIDS) crisis and also helped to raise funds for relief programmes in Africa. 

In addition, the post-2000 momentum was marked by various initiatives, such as the Report of the Commission for Africa, spearheaded by UK prime minister Tony Blair and the European Consensus on Development. The 2005 World Summit in New York called for increased aid transfers in order to reach the MDGs of halving poverty and hunger by 2015. 

While progress was made on the MDGs, many goals remained unachieved in Africa, although there is a convincing argument that the MDGs were poorly tailored for Africa and set unrealistically ambitious goals. [30W Easterly, How the Millennium Development Goals are unfair to Africa, November 2007] Even before the 2015 deadline for the MDGs, governments began to look at the post-MDG development framework and what would ultimately become the Sustainable Development Goals (SDGs).

In the meanwhile, the Lagos Plan of Action and the AEC concepts had largely fallen by the wayside and been eclipsed by the establishment of the New Partnership for Africa’s Development (NEPAD) in 2001. NEPAD departed from the Lagos Plan of Action with a greater focus on political reform as a core component of development, and efforts to improve accountability of member states were also strengthened by the institution of the African Peer Review Mechanism. While remaining Africa centred and led, NEPAD eschewed regional isolationism and embraced global partnerships and has since been integrated into the AU as its core development agency, as well as the implementing agency for Agenda 2063. [31Z Bostan, Another false dawn for Africa? An assessment of NEPAD, 2011]

Cooperation for Africa’s development is now largely guided by the SDGs and Agenda 2063, although it is already looking unlikely that Africa will achieve the aspirations of these instruments in the wake of the unanticipated COVID-19 pandemic and more recently the impact of war in Europe and associated food and supply chain disruptions. Indeed, these goals may require revision to contemplate what is reasonably achievable in the context of a recovery from the pandemic, but they nevertheless provide a useful framework for guiding and assessing Africa’s development trajectory.

Africa’s growing dependence on commodities

Instead of the more productive (re)structuring of its economies, much of Africa’s recent growth was enabled by the commodities supercycle that started in 1996 and peaked in 2011. 

What made this cycle so powerful is that the prices for oil, base metals and agricultural produce all started to increase at roughly the same time. It was therefore generally a stronger and more uniform up and down than previous supercycles, lifting economic growth across all regions in the world, including in Africa, resulting in rapid growth prior to the 2007/08 financial crisis. 

The demand behind the supercycle came from the higher primary export volumes required to feed Asia’s manufacturing and construction boom, much of which was in China. In the process, China’s consumption of commodities grew from between 10% and 15% of total world demand to more than 50% for most commodities. The subsequent decline in commodity prices is largely a function of the economic restructuring and modestly lower growth in China. 

The Arab Spring caused a brief spike in oil prices, but the ongoing shale oil and gas revolution in the US led to a subsequent downswing ahead of the COVID-19 pandemic. Eventually, growth in India could reignite deep and broad demand for commodities and there are some indications of a turnaround as liquid natural gas, iron ore, copper, rice and soybeans started to surge early in 2021 as the economies of high-income countries (and China) rebounded after the initial impact of COVID-19. Russia’s invasion of Ukraine also saw oil and gas prices spike as Europe struggled to balance its desire to assist the government of President Zelensky against Russian aggression while simultaneously paying Russia almost a billion dollars a day for oil and gas.

The global energy transition will eventually play an important role in a next upward commodities cycle, as demand for copper, cobalt, platinum, nickel and lithium – all important for batteries, generating power from solar and wind and the manufacture of hydrogen fuel cells – accelerates as part of the fight against climate change and the shift to build renewable energy infrastructure. In addition to more aggressive environmental policies, commentators speculated that the upswing was being driven by stimulus spending, growth in China, rising inflation and a weaker US dollar. [32S Planting, A new ‘commodity supercycle’ is lifting the JSE, Daily Maverick, 14 February 2021]

Supercycles are not smooth and consequently the ups and downs can vary greatly, and it is too early to see a decades-long, above-trend movement in a wide range of base material prices (the definition of a supercycle). Typically, each commodity class has its own pendulum, so shifts in the price of base metals do not generally correspond with that of livestock, agricultural products or oil, which has evidenced most volatility as the Organization of Petroleum Exporting Countries (OPEC) tries to govern oil prices. For example, commodity prices remained depressed for a year after 2007/08 before recovering, only to be hammered by the COVID-19 pandemic in 2020. 

In its 2021 report ‘The State of Commodity Dependence’, the UN Conference on Trade and Development (UNCTAD) noted that 101 out of 189 countries were dependent on commodity exports; the number for Africa in 2018/19 was 45 out of 54 (80%). [33United Nations Conference on Trade and Development, The state of commodity dependence, Geneva: UNCTAD, 2021, 9, https://unctad.org/system/files/official-document/ditccom2021d2_en.pdf.]

Although the number of commodity-dependent countries in Africa has increased markedly in recent years, it generally remained static in other global regions, contributing to the relative decline in Africa’s competitiveness. In fact, the extent to which African countries are dependent on commodities when measured by value of exports has increased, with most being exported to Europe and increasingly to China. 

Ironically, Africa’s low levels of integration into the global economy provided it with a degree of protection from the global financial crisis of 2007/08, although the impact was nevertheless significant. Global and African growth was significantly slower in the aftermath of the crisis and from 2010 to 2019 Africa experienced average growth of only 3.1%. 

In addition to the general decline in commodity prices that follows the restructuring of China’s economy, three factors likely explain Africa’s modest rates of growth after the global financial crisis: 

  • Outside of Africa, the size of the working-age population relative to dependants had started to decline, meaning that labour was no longer contributing positively to improvements in productivity (as discussed in Demographics). 
  • North African countries and the Sahel region have been caught up in the turmoil that followed the Arab Spring (as discussed in Stability). A decade later, Libya is still trapped in a debilitating civil war and the region is awash with weapons spreading across the Sahel to West Africa. 
  • Oil exporters have been affected by the sharp decline in oil prices that has accompanied the shale revolution in the US, which saw demand for oil decline, although prices again increased in 2022 with the war in Ukraine. 

Based on the duration of previous cycles, it can take between five and seventeen years before a general improvement in commodity prices occurs again. [34According to research by the Bank of Canada, the previous commodity supercycles have peaked in 1904, 1947 and 1978 and lasted for 33, 29 and 34 years, respectively, from trough to trough. Commodity prices subsequently declined to 1995. The most recent supercycle peaked in 2011; B Bahattin Büyükşahin, K Mo and K Zmitrowicz, Commodity price supercycles: What are they and what lies ahead?, in Bank of Canada Review, Ottawa: Bank of Canada, 2016, 37.] On average, full trough-to-trough supercycles take 32 years – but no two supercycles are the same and the length and intensity of each downturn and upswing varies considerably from cycle to cycle. That said, working on a 32-year average, we should reach the trough around 2027 and a peak expected around 2043.

In addition to favourable demographics, the next commodities supercycle will lift African growth rates, although likely to a lesser extent than before the 2007/08 global financial crisis, and it may also take several years before the demand for commodities recovers from the impact of the COVID-19 pandemic. The world will still require commodities, but the resource intensity of economic growth is declining. Recently, Chinese demand for base commodities has been shifting from iron ore, copper and coal to consumer-related commodities such as meat, dairy and apparel, as well as the rare earth metals used for batteries and computers. 

Just how rapidly China is growing (in spite of moderating rates in recent months) is difficult to grasp. For example, between 2014 and 2018, China added the size of the entire economy of Africa to its GDP in market exchange rates. The Chinese economy is already larger than the US economy in purchasing power parity and is expected to overtake the size of the US economy in market exchange rates around 2027.

In addition, a next supercycle (i.e. from around 2030 onward) would be driven by the expected demand for commodities from rising India, which is experiencing a steady improvement in growth rates. Steady global growth will continue to generate demand for commodities. Global GDP is expected to expand by almost 30% by 2030 (from 2019) and 60% by 2040 (all calculations in market exchange rates). 

However, there is ample evidence that commodity dependence leads to slow and poor-quality growth over long time horizons. Extreme commodity dependence is closely associated with poor governance and supporters of the ‘resource curse’ hypothesis argue that too heavy a dependence on energy resources such as oil or gas impedes rather than accelerates economic growth and investment. It may also hinder the broadening of the economic base by impeding value-add in agriculture and manufacturing, as well as the development of the various institutions of good government. [35T Gylfason and G Zoega, Natural Resources and Economic Growth: The Role of Investment, World Economy, 29:8, 2006, 1091–115.]

Some of the severe risks that single-commodity exporters face include: 

  • exposure to price volatility, as occurred, for example, in 2014 and again early in 2020 with the collapse of the oil price.
  • decline in the contribution from other economic sectors – the so-called Dutch disease.
  • increased likelihood of undemocratic government, as governance is dominated by competition for control over the income stream from its single commodity and not by diverse considerations such as agriculture, manufacturing and services.
  • prevalence of a rentier state, where the state is not accountable to citizens but to special interest groups aligned to the commodity income.
  • pressures to spend within a short-term horizon to maintain support – also to align with surge in commodity incomes.
  • a greater likelihood of low-quality institutions – the sum impact of all of the above. 

Larry Diamond and Jack Mosbacher summarise it as follows: 

The surge of easy money fuels inflation, fans waste and massive corruption, distorts exchange rates, undermines the competitiveness of traditional export sectors such as agriculture, and preempts the growth of manufacturing … Rather than fostering an entrepreneurial middle class, oil wealth, when controlled by the government, stifles the emergence of an independent business class and swells the power of the state vis-à-vis civil society. [36L Diamond and J Mosbacher, 2013, Petroleum to the People: Africa’s Coming Resource Curse – and How to Avoid It, Foreign Affairs, September/October, 87–88.]

The result is an ‘observable correlation between resource abundance and political corruption.’ [37L Diamond and J Mosbacher, 2013, Petroleum to the People: Africa’s Coming Resource Curse – and How to Avoid It, Foreign Affairs, September/October, 87–88.]

To date, Botswana is the only African country that has successfully and sustainably developed its resources sector (diamonds) to the general benefit of its population. Despite relying heavily on commodities, Botswana has had the lowest percentage share of primary commodities in exports in Africa, in part by stimulating domestic processing industries. [38United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016] Yet it too struggles to spread its commodity-led growth beyond a small, privileged elite in a country that has the third highest level of inequality globally.

Resource-poor economies generally outperform resource-rich countries, with South Korea, Japan and Taiwan often cited as the best examples of the former, and Nigeria, Angola and Equatorial Guinea as examples of the latter. South Korea has virtually no commodity reserves of significant value. In 1962, the country exported mostly raw materials such as fish, rice, iron ore and unprocessed silk, whereas today it boasts a well-diversified export portfolio that includes electronics, cars, ships and other high-end machinery.

By contrast, Nigeria’s main exports in 1962 were assorted agricultural products – mostly groundnuts, soybeans and cocoa beans – and crude petroleum. In 2019, crude petroleum and liquified petroleum gas accounted for almost 60% of Nigeria’s total exports by value. In 1962 GDP per capita in South Korea was about half that of Nigeria; in 2018 it is seven times more. Similarly, Africa’s two richest countries (in terms of GDP per capita), Mauritius and Seychelles, have almost no reliance on commodities, relying instead on their services sectors and yet maintaining average or better growth rates between 1990 and 2014. [39United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016]

This is not to say that commodities cannot play a powerful role in development. Norway famously made excellent use of its oil and gas reserves for development, saving much of the proceeds in a sovereign wealth fund. Although politically difficult, managing spending and planning for the future are key to making the most of national commodity endowments. 

In the 1970s, Cameroon adopted a similar strategy as it began producing oil, opting to increase government savings while moderating spending and borrowing during the upcycle. Despite a decline in commodity prices in the early 1980s, Cameroon’s growth rate remained at about 7% per year, while maintaining low inflation and borrowing rates (although its success was eventually short lived). [40United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016]

At the same time, Kenya and Nigeria spent most of their revenues from coffee and oil price booms in the late 1970s and could not reel in expenditure in the 1980s when prices, and thus revenue, ultimately fell. Growth rates declined, while inflation and borrowing increased. [41United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016]

Since then, several African countries have attempted to make better use of their resource booms by saving more of the associated revenue in sovereign welfare funds, including Angola, Mauritania, Botswana, Chad, Gabon, and Equatorial Guinea (Nigeria accomplished something similar in the form of the excess crude account, subsequent to the 2008 financial crisis). 

Although such savings have been associated with better macroeconomic management, they are also regularly undermined by subsequent over-withdrawals from the funds and political interference in their governance. Of all Africa’s many resource-rich countries, and the many sovereign wealth funds established, Botswana’s Pula sovereign wealth fund arguably stands alone in attaining sustained improvements in macroeconomic management, thanks to excellent governance and management. [42United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016]

In late 2019, the Sars-CoV-2 virus spread to humans in China’s Wuhan province and the subsequent COVID-19 pandemic brought the global economy to a shuddering halt. 

Initially it was feared that mortality from COVID-19 would hit Africans harder than other regions due to higher levels of poverty, lower quality health services, and the higher prevalence of HIV/AIDS and other comorbidities, but eventually the reverse transpired, generally attributed to the continent’s youthful population. More than 80% of Africans who were infected with the virus were asymptomatic, meaning they showed no symptoms and could carry on with their normal activities, almost double the average for the rest of the world. [43G York, Africa’s low COVID-19 death rate has multiple causes, WHO says, Globe and Mail, 25 September 2020] However, Africa has not been spared the dire economic impacts associated with the virus, such as on tourism, and the efforts to contain the spread of the pandemic globally.

Before the COVID-19 pandemic, the IMF expected that Africa would register close to 3.2% average growth. Eventually the health crisis caused a collapse of 6.4 percentage points in growth compared with the pre-COVID forecast, equivalent to a difference of US$200 billion in the size of the African economy. With a population that is increasing at 2.7% annually, average GDP per capita in Africa fell by more than US$300 in 2020 compared with a no-COVID forecast. 

Although wealthier African countries have more resources to face the pandemic, they also tend to have a larger decrease in GDP. Hence, the Seychelles and Mauritius were hit hardest (at about 17% decline in the size of their economies compared to a no-COVID scenario), followed by Botswana (–14% difference compared to no-COVID forecast), South Africa and Namibia who also did worse than the continental average (–9% and –7.4%, respectively). 

The impact of COVID-19 is that 31 million more Africans were likely to have been classified as extremely poor in 2020 than would have been the case in a no-COVID scenario. [44J Cilliers et al, Impact of COVID-19 in Africa: A scenario analysis to 2030, Institute for Security Studies, 23 July 2020] Government revenues in Africa were estimated to decline by US$66 billion in 2020 and US$61 billion in 2021 compared with a no-COVID forecast. The effects will linger. By 2030, more Africans are likely to have succumbed to the secondary impact of the associated reductions in government revenues – reductions in health expenditure in particular – than from the direct effect of the virus. 

The response by African governments to the threat of COVID-19 differed sharply between countries, with most adopting variations of lockdown measures and instituting harsh travel restrictions. Necessary spending on health interventions, social grants, and general fiscal stimulus to drive recovery, together with reduced government revenues, have also increased debt dependence and reduced debt sustainability, even in Africa’s wealthier countries. African countries estimated (in 2020) that they would need annual support of US$100 billion for the next three years plus the extension of a moratorium on debt repayments announced by the G20. [45T Chambraud, African countries ask for Moratorium extension 'until 2021', AfricaNews, 27 September 2020]

Economic recovery in Africa will depend on the roll-out of vaccines. In April 2021, the World Bank estimated that non-resource-intensive countries (e.g. Côte d’Ivoire and Kenya) and mining-dependent economies (e.g. Botswana and Guinea) would likely see robust growth in 2021 on the back of consumption picking up, more investment confidence and increased exports, and tourism-based economies (e.g. Cabo Verde and Mauritius) were expected to gradually recover as vaccination efforts gained momentum. However, the impact of the pandemic was forecast to compound existing security challenges in oil-exporting economies in West and Central Africa, leading to subdued recovery. [46Office of the Chief Economist for the Africa Region, Africa’s Pulse: COVID-19 and the future of work in Africa: Emerging trends in digital technology adoption, World Bank Group, April 2021]

Africa’s recurring debt challenge

Among its other impacts, COVID-19 has elevated Africa’s pre-COVID rising debt levels to a crisis. It recalls the extent to which alleviating Africa’s large debt burden focused the minds of many in the development community during the 1980s and 1990s. 

Whereas a debt-to-GDP ratio of 60% is generally seen as a responsible ceiling, the suggested long-term debt-to-GDP ratio for developing and emerging countries is often set at 40%. In a wide-ranging study on the relationship between debt and growth, Carmen Reinhart and Kenneth Rogoff concluded that ‘when external debt reaches 60% of GDP, annual growth declines by about 2%’. [47CM Reinhart and KS Rogoff, Growth in a Time of Debt, American Economic Review, 100, 2010, 573–78, The 1995 debt ratio is from IFs.] However, the debt trajectory and rate of economic growth rather than the absolute debt level may be more important. African countries generally pay punitive interest rates on debt compared with other regions (e.g. South America) – a function of the negative views on Africa that dominate among the (Western) rating agencies. [48A Pescatori, D Sandri and J Simon, Debt and Growth: Is There a Magic Threshold? International Monetary Fund, Working Paper (WP/14/34); M Mutize, African countries aren’t borrowing too much—they’re paying too much for debt, Quartz Africa, 22 February 2020]

For almost two decades since the mid-1980s, Africa’s low- and lower middle-income countries consistently had average debt levels above 60% of GDP (Chart 5).

In 1995, public debt for Africa’s lower middle-income countries peaked at 97% of GDP. In the following year, public debt for low-income Africa was at an astounding 174% of GDP. In response, the IMF, the World Bank and other creditors began the Heavily Indebted Poor Country (HIPC) Initiative in 1996, which was reviewed and comprehensively expanded in 1999 and complemented by the Multilateral Debt Relief Initiative, a debt relief proposal initially advanced by the Group of Eight (G8) countries, since 2005. [49World Bank, Debt in low-income countries: A rising vulnerability, January 2019]

As the HIPC programme matured, the international community focused on strengthening the links between debt relief and progress in implementing poverty reduction strategies and macroeconomic and structural reform programmes. [50World Bank, Heavily Indebted Poor Country (HIPC) Initiative, 2018] As a result, public debt among low-income African countries declined to 15% of GDP in 2013 and to 11% among lower middle-income countries the following year.

However, debt levels subsequently started to increase again, largely owing to declining commodity prices after 2011, which hit Angola, Chad, the Republic of the Congo, Niger, Nigeria and Zambia particularly hard. Other factors also contributed, such as internal conflict (Burundi), the impact of epidemics such as Ebola (in Liberia and Sierra Leone) and corruption (Mozambique and The Gambia). Finally, a larger liquidity crunch, delays in the start of natural resource production and weaknesses in revenue administration negatively affected debt levels in Benin, Cameroon, Djibouti, Ethiopia, Ghana, Kenya, Senegal, São Tomé and Príncipe, Rwanda, Togo, Uganda and Zimbabwe. [51International Monetary Fund, Macroeconomic developments and prospects in low-income developing countries, Washington: IMF, 2018, 39-40]

In 2018, the IMF noted that public debt rose above 50% of GDP in 22 countries at the end of 2016, up from ten countries in 2013. [52International Monetary Fund, Regional Economic Outlook. Sub-Saharan Africa: Capital flows and the future of work, Washington: IMF, 2018, 6]

It was against this background that the announcements of large additional loans from China (such as on the margins of the Forum on China-Africa Cooperation meeting held in September 2018 in Beijing) elicited concern. Exact information is hard to decipher as national banks, both Chinese and Western, do not release comprehensive data, but it seems that interest-bearing loans from the Chinese government, banks and contractors have gone from almost nothing in 2000 to US$143 billion in 2017, about a third of Africa’s overall debt of around US$365 billion. Chinese lending now dwarfs World Bank loans in Africa. [53Johns Hopkins School of Advanced International Studies, Data: Chinese loans to Africa; Exx Africa, Africa lobbies for debt swap to avoid wave of sovereign defaults, Exx Africa Insight, 4 May 2020] To some analysts it appeared that Africans were having to borrow money from the IMF to repay China. In response, the US administration under President Donald Trump launched an aggressive campaign to characterise Chinese loans as ‘debt-trap diplomacy’ – arguing that China is seeking to use debt for strategic leverage to eventually gain control over strategic resources such as rail and harbours.

Chinese lending appears to have resulted in an increase of nearly 4% in debt-to-GDP of low-income countries in recent years while that of multilateral institutions such as the World Bank had seen an equal decline. Chinese lending to developing countries is generally offered on less concessional terms than those offered by Western and multilateral creditors, although more favourable than what the market would offer. [54S Morris, B Parks and A Gardner, Chinese and World Bank lending terms: A systematic comparison across 157 countries and 15 years, Center for Global Development, 2 April 2020] The shift in debt away from the concessional rates offered by the World Bank and IMF towards China has also seen other effects, such as shorter maturities and shorter grace periods. [55S Morris, B Parks and A Gardner, In global COVID-19 response, new CGD research shows China should lead on poor country debt relief, Center for Global Development, 2 April 2020]

In 2019, Beijing announced that it would establish an analysis framework on debt sustainability for Belt and Road Initiative projects and improve transparency.[56K Yao, China in bid to allay fears of debt risk in its Belt and Road Initiative, Business Day, 25 April 2019] The IMF assessed that about 17 low-income African countries were either in or at risk of debt distress. 

To cushion the economic and social impacts of the subsequent COVID-19 pandemic, a number of African governments announced fiscal stimulus packages that averaged about 3% of GDP, financed partly by debt. The average debt-to-GDP ratio, which had somewhat stabilised at around 60% of GDP at the end of 2019, was increasing rapidly when, in April 2020, the G20 countries, the IMF and the World Bank announced an initial one-year debt standstill for 76 low-income countries, including 40 in sub-Saharan Africa. The IMF also approved six months of debt service relief for 25 low-income countries, including 19 in Africa, and approved additional funding support for several. [57D Gandi and C Golubski, International community looks to support Africa with debt relief, health aid, Brookings Institution, 18 April 2020] It proved too little too late for, in November 2020, Zambia became the first African country to default on its debt. [58O Williams, Zambia’s default fuels fears of Africa’s ‘debt tsunami’ as Covid impact bites, The Guardian, 25 November 2020] 

When newly elected Zambian Prime Minister, Hakainde Hichilema, reviewed the books in September 2021, he found that Zambia owed US$2 billion more to foreign creditors than previously thought, with more than US$6 billion owed to China alone. External debt stood at US$14.48 billion – more than 60% of GDP – of which Zambia owed China US$5.75 billion (or US$6.18 billion once unpaid interest was included). [59Staff writer, Zambia finds $2 bn more debt on books, with China major creditor, The East African, 8 October 2021]

Almost simultaneously, in neighbouring Angola, the country opened the door to China to extend its oilfield holding as its previous system of using oil to pay for debt came under pressure with falling oil prices. Oil-backed loans then already accounted for two-fifths of Angola’s external debt, most of it to China, which agreed to provide deferment over and above that promised under the G20 debt service suspension initiative. [60D Whitehouse, China’s Angola relief proves Africa can withstand Zambia default, The Africa Report, 8 October 2020] In Kenya, China agreed to a six-month debt repayment holiday worth US$245 million in January 2021, shortly before a critical deadline when a US$1.4 billion loan from the China Exim Bank to build the Nairobi-to-Naivasha standard gauge railway would have come due. [61F Muli, China promises to help Kenya deal with debt challenges, KahawaTungu, 18 January 2021]

Actually, China has probably taken more aggressive assistance measures to assist Africa during COVID-19 than much of the West, providing restructuring and postponing of debt repayments to Angola, Zambia and Ethiopia in rapid succession in 2020. However, it has not offered substantive debt cancellation. [62J Nyabiage, Chinese lenders have extended US$7.6 billion in pandemic debt relief, mainly to Africa, South China Morning Post, 9 March 2021]

In this context, the administration of US President Joe Biden agreed, in April 2021, to the allocation of US$650 billion in special drawing rights (or emergency credit) via the IMF, although only a limited amount (around US$33 billion) will flow to Africa. Having been able to stimulate their domestic economies with several trillion dollars, a number of G7 members donated their Special Drawing Rights to low-income countries. [63J Wheatley, IMF prepares to bolster developing countries’ finances, Financial Times, 5 April 2021]

China is now a Africa’s largest single official bilateral lender, owning anything between 12 and 21% of the continent’s outstanding debt although debt owed to Western banks, asset managers and oil traders are, according to Debt Justice, three times larger. This ties Africa increasingly to China, in addition to having it as its single largest trading partner[64K Acker, D Brautigam and Y Huang, The pandemic has worsened Africa’s debt crisis. China and other countries are stepping in, The Washington Post, 26 February 2021]. Looking to the future, it could be that China may opt for a majority shareholder in some of the assets of countries with high debt levels as an alternative to repayment of maturing debt. [65C van Staden, China holds all the cards as pandemic pushes African countries to default on loans, South African Institute of International Affairs, 30 September 2020 and Debt Justice, African governments owe three times more debt to private lenders than China, 11 July 2022.]

China’s spectacular growth rates are also set to steadily decline (forecast in IFs to decline to below 4% per annum by 2034), meaning that its surplus cash will decline as its focus will increasingly be on its neighbourhood. The growth slowdown will decrease its demand for commodities such as iron ore, oil and gas from Africa as China’s massive domestic infrastructure programmes taper down. In 2021, data emerged that pointed to an alarming trend since the launch of the Belt and Road Initiative in 2013, [66Banking on the Belt and Road Dataset: AidData's Global Chinese Development Finance Dataset, Version 2.0] namely a decline in Chinese official-sector lending to African governments (so-called sovereign debt by the two ‘policy banks’, China Eximbank and China Development Bank) in favour of a dramatic rise in so-called ‘hidden debt’ from state-owned Chinese commercial banks. [67For example, Bank of China, Industrial and Commercial Bank of China, and China Construction Bank.] For example, whereas Zambia (before its September 2021 elections) admitted to sovereign debt of US$3.4 billion, research by AidData indicated that Zambia actually owed US$6.6 billion to 18 different Chinese creditors once the hidden debt component was included. 

Hidden debt does not appear on public balance sheets. The average annual underreporting of repayment liabilities to China, according to AidData, is equivalent to 5.8% of GDP. Hidden debt is different from sovereign debt, which is directly owned by central government institutions, as it is debt between a Chinese commercial bank and, often, a special-purpose vehicle specifically created to ‘hold’ the debt in the African country requiring the loan. Such debt is still guaranteed by the respective African government, but indirectly. 

What makes this trend alarming is not only the extent of the debt including the lack of public reporting, but the nature of collateral (such as profits from the port of Mombasa) and the steep terms. ‘A typical loan from China has a 4.2% interest rate and a repayment period of less than 10 years. By comparison, a typical loan from an OECD-DAC lender like Germany, France or Japan carries a 1.1% interest rate and a repayment period of 28 years,’ writes AidData. [68A Wooley, AidData’s new dataset of 13,427 Chinese development projects worth $843 billion reveals major increase in ‘hidden debt’ and Belt and Road Initiative implementation problems, AidData, 29 September 2021] Accordingly it seems that ‘Beijing has used debt rather than aid to establish a dominant position in the international development finance market.’

The Sustainable Development Goals and measuring extreme poverty

Many of the goals and targets of the SDGs refer to the relationships between economic growth, inequality (using various different indices and measures) and decent employment, three of the key factors that determine poverty rates. [69For example, see SDG Target 8.1, Target 8.5 and Target 10.1; https://sdgs.un.org/goals/goal8.]

The SDG goals and targets have led to a global effort to develop the data and associated tools with which the international community can more accurately measure progress. Measuring poverty has received significant attention as it is closely related to the imbalances in people’s opportunities in education, health, level of empowerment and access to technology. 

Poverty does not look the same everywhere:

  • It differs between and within countries. For example, in the eastern parts of the DR Congo poverty looks quite different from that experienced in Mali or South Africa. 
  • It differs according to location. Poverty in rural Uganda is different from that in the capital city of Kampala. 
  • It also differs according to demographics. Poverty is different between men and women, and poverty among adults is different from that experienced by children. For example, since women tend to be disproportionately responsible for household chores and caregiving, poverty restricts the time that girls can commit to staying in school. It also determines whether families can afford school fees, purchase supplies, or guarantee that their children can attend school when their help is needed at home, either to help generate income or to take care of household tasks. 
  • Different regions also use different measures to reflect poverty more accurately in their member states. For example, the European Union typically uses a relative poverty line that is set at 50% or 60% of national median income. 

As average income is quite a blunt instrument through which to view poverty, new approaches and definitions have been suggested. For example, the Multidimensional Poverty Index (MPI) [70The MPI measures multiple deprivations in the same households in education, health and living standards across 10 indicators ranging from nutrition and child mortality to assets.], developed by the Oxford Poverty and Human Development Initiative and subsequently adopted by the United Nations Development Programme [71In 2010, the UN Development Programme also launched its Inequality Adjusted Human Development Index and Gender Inequality Index.], is focused on a set of tangible goods and services without which people might be defined as poor.[72See: Oxford Poverty and Human Development Initiative, Global Multidimensional Poverty Index, 2018] The 2019 edition of the Human Development Report [73United Nations Development Programme, Human Development Report 2019: Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century, New York: UNDP, 2019.] is entirely devoted to exploring the different dimensions of inequality and poverty and carries the subtitle ‘Inequalities in human development in the 21st century’.

For many years the international community used a single income-based definition of extreme poverty for the purposes of cross-country comparisons, although it has often been criticised for its focus on income and that it does not reflect the lived experience of extreme poverty. The threshold was initially set at US$1.00, later increased to US$1.25 and when the negotiations on the SDGs were finalised, the benchmark was living below a daily income of US$1.90 per person in 2011 prices. That value was, in turn, anchored in the poverty thresholds used by some of the world’s poorest countries since national poverty lines inevitably increase as national incomes rise. 

Using the US$1.90 threshold, 35% of Africa’s total population was considered extremely poor in 2019 – a ratio that will decline to 31% by 2030 and 23% by 2040. Owing to rapid population growth, by 2040, 486 million Africans would therefore still live in extreme poverty compared with 455 million in 2019. In 2040, extreme poverty in the rest of the world is expected to be at about 116 million people, down from 286 million in 2019.

Charts 6 and 7 present two comparative views of extreme poverty in Africa from 2015, with a forecast to 2043. With more than 450 million extremely poor people in 2019, sub-Saharan Africa is by far the region with the largest burden of extremely poor people globally.

Charts 8–10 present the Current Path forecast of extreme poverty vs population for individual African countries in 2019, 2030 and 2043, using US$1.90 throughout.

The impact of the additional poverty lines

To compensate for extreme poverty in richer countries occurring at higher levels of income than in poor countries, the World Bank announced that although the headline goal of eliminating extreme poverty would still be measured using US$1.90 per person per day for low-income countries, three additional poverty lines would be used for lower middle-income, upper middle-income and high-income countries (US$3.20, US$5.50 and US$22.70, respectively). [74F Ferreira and C Sánchez-Páramo, A richer array of international poverty lines, World Bank, 13 October 2017]

Previously, using US$1.90, North Africa was the only region in Africa that would achieve the goal of eliminating extreme poverty as set out in the headline goal. In fact, as a group it has already done so (except for Mauritania), with the portion of its extremely poor population at below 3%. 

The Bank also moved away from the household measure in favour of an individual threshold owing to considerable evidence that there are poor women and children living in non-poor households. So, while the main breadwinner in a household may technically not be classified as extremely poor, others in the same household may be living on much lower levels of income. [75D Sharma, Why the World Bank is taking a wide-angle view of poverty, Brookings Institution, 14 November 2018]

The three additional poverty lines compensate for a crucial imbalance in that the amount of income that a person needs to escape the burden of extreme poverty in low-income Mozambique is quite different from the income that a person in upper middle-income South Africa would need. 

As shown in Chart 11, once the differentiated poverty rates are applied in Africa, the impact is to sharply increase the number of Africans deemed to live in extreme poverty.

Using the four poverty lines, each applied to the relevant income group, the Current Path forecast is that the extreme poverty rate in Africa will, by 2043, have declined from 49% in 2019 (640 million out of a total of 1.3 billion people) to 44% (or 755 million out of 1.7 billion people) in 2030, and 33% (731 out of 2.1 billion people) in 2043, as shown in Chart 11.

Other regions and countries are similarly affected. Whereas China met the US$1.90 goal of eliminating extreme poverty some years ago, using the US$5.50 extreme poverty line for upper middle-income countries (its current status according to the World Bank), China had around 217 million extremely poor people in 2019. With an average GDP growth rate of 5% from 2020, China will get below 3% of its population living in extreme poverty by 2037. However, China is estimated to qualify as a high-income country from 2023, and therefore a more reasonable estimate of its rate of extreme poverty in 2037 (using US$22.70) would be 813 million people or 56% of its population. In spite of its amazing progress, China too still has a long journey to complete.

In May 2022, the World Bank announced that the international poverty line would be updated from $1.90 in 2011 prices to $2.15 in 2017 prices and explained that the real value of $2.15 in 2017 prices is the same as $1.90 in 2011 prices. [76World Bank, Fact Sheet: An adjustment to global poverty lines, 2 May 2022] This does not lead to a substantial change to global poverty although ‘extreme poverty is reduced in Sub-Saharan Africa and increased slightly in each of the other regions’. Instead of the previous US$3.20 for lower middle-income countries, the adjusted poverty line is now $3.65, and $6.85 for upper middle-income countries (instead of $6.20 in 2011 prices). The Bank has not yet announced the new poverty line for high-income countries, previously set at $22.70 in 2011 prices. 

It will take some time for these new poverty lines to settle down in the associated analysis and the Bank intends to release the associated estimates in 2023. In the meanwhile, this site will continue to use the $1.90, $3.20, $6.20 and $22.70 poverty lines.

Conclusion: The lack of productive realignment of African economies

With Africa’s large and growing labour force, the matter of labour’s contribution to economic growth is of particular importance to the continent, which does not have deep pockets of capital and does not benefit from high levels of technology – the other two sources of productivity improvements. 

Global labour productivity growth slowed from a peak of 2.7% in 2007, just before the global financial crisis, to a post-crisis trough of 1.5% in 2016, and it remained below 2% a year in 2017/18. By 2018, the output per hour of work had actually been declining for more than a decade. 

In theory, the potential for improvements in productivity as part of digitisation and automation is large. But with a shrinking labour force as a portion of the total population in most middle- and high-income countries, artificial intelligence and automation first need to offset the reduction in production from that smaller labour force before these countries will experience an increase in their economy. With its growing working-age population, Africa is potentially in a positive position, but it comes off a very low base and many countries are still several decades away from generally achieving a positive ratio of working-age persons to dependants (as discussed in Demographics

A second reason for low productivity to date is that instead of the transition from agriculture to manufacturing to services, which is the growth trajectory that delivered the most rapid improvements in general well-being in other regions, the African transition is from subsistence agriculture to low-end services in urban areas. Africa has not benefited from a revolution in its agricultural sector. Currently, the service sector (lending, recreation, tourism, transport, food) constitutes the largest economic sector by value and is significantly larger than any other sector in Africa, including agriculture and manufacturing. However, the impact of COVID-19 is likely to accelerate the growth in the low-end service sector as a result of lower investment, erosion of human capital because of unemployment and loss of schooling, and a retreat from global trade and supply chains. COVID-19 could encourage the digitisation and more rapid adoption of new technologies, but the associated productivity gains may be unevenly distributed – in particular, bypassing those countries with widespread, stable Internet access, strong institutions and good education systems, and causing employment losses in some sectors. 

Unlike the manufacturing sector, the service sector was, prior to COVID-19, not fully disrupted by technology. As the service sector is more labour intensive, the shift to services reduced overall productivity, but that is now rapidly changing although more slowly in Africa given the dominance of low- rather than high-end services, often provided in informal settings such as barber shops and vehicle repair along the side of the road.

COVID-19 is likely to finally drag the services sector into the modern world. According to the McKinsey Institute, productivity growth could potentially reach 2% annually over the next decade, with 60% of this increase due to digital opportunities. [77J Manyika and K Sneader, AI, automation and the future of work: Ten things to solve for, 1 June 2018]

Africa’s already small manufacturing sector is declining, suggesting that Africa is experiencing so-called ‘premature deindustrialisation’. Whereas manufacturing is often referred to as the automatic escalator that lifts countries to higher levels of productivity, Africa appears to be embarking on a low-productivity, service and commodity escalator. Africa’s service escalator does go upward, but only slowly while the manufacturing window is closing. This is largely because the share of workers employed in higher-productivity sectors such as manufacturing is declining, resulting in a drop of the average growth output per worker. [78UNU-WIDER, Studies in Development Economics, in C Newman, et al. (eds), Manufacturing Transformation: Comparative Studies of Industrial Development in Africa and Emerging Asia, Helsinki:Oxford University Press, 2016, 5; See also: H Bhorat, R Kanbur, C Rooney and F Steenkamp, Sub-Saharan Africa’s manufacturing sector: Building complexity, Abidjan: African Development Bank, 2017.] In addition, it has become much harder to establish export manufacturers. The entire sector is shrinking globally and competition is fierce. This may all change in the wake of the COVID-19 pandemic and the global competition between the West and China and subsequent themes explore some of the associated trends.

The general shift seems to be that labour is moving from subsistence agriculture in rural areas to informal jobs in the urban service sector. Investment and jobs are often limited to capital-intensive commodity enclaves such as in northern Mozambique’s gas fields, with little or no forward or backward linkages into the surrounding economy. The few jobs that are created through these megaprojects do little to provide employment or create local value chains. They provide jobs for a small number of expatriates and generate large streams of revenue for governments, but generally enclave economics do not benefit broad welfare improvements within the economy. Yet commodity-based enclave development is often the norm in commodity-rich countries, and in fact, Africa is becoming even more dependent on low-value commodity exports for its foreign exchange earnings. It is the only region globally where the number of commodity-dependent countries (in terms of value of export earnings) increases year on year. [79United Nations Conference on Trade and Development, The state of commodity dependence, Geneva: UNCTAD, 2019]

Going forward, Africa needs to seize the opportunity offered by renewable energy and the promise of the Fourth Industrial Revolution to rapidly improve productivity growth and to provide more jobs. But how can that be achieved in a global economic environment where Africa is becoming more, not less, dependent on the export of commodities and where the contribution of its small but growing labour force (as a portion of the total population) is likely to decline in value? And all of this while growth of the manufacturing sector is constrained by Southeast Asia having become the world’s factory?

The debate about the role of the state in Africa’s development trajectory evolved markedly over recent decades. The mantra of ‘good governance’ – defined as ‘the manner in which power is exercised in the management of a country's economic and social resources for development’ – steadily replaced the need to downsize the state. For donors such as the IMF and the World Bank, the focus on good governance was a way to respond to the inefficiencies, corruption and predation that had become a defining characteristic of many African governments. Ideologically, it also reflected the orientation of its most important member, the US.

Later, the debate would shift again, now to the need to attract and enable foreign direct investment from the private sector as the best means to facilitate growth. In its most recent incarnation, the focus is on the importance of domestic resource mobilisation, effectively completing a circle where the role of capable African governments is again recognised as key to the continent’s future. 

Endnotes

  1. Consisting of China, Hong Kong, Japan, North Korea, South Korea, Mongolia and Taiwan.

  2. Consisting of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela.

  3. Consisting of Afghanistan, Bangladesh, Bhutan, India, Iran, Maldives, Nepal, Pakistan and Sri Lanka.

  4. F Bourguignon and C Morrisson, Inequality among World Citizens: 1820–1992, American Economic Review, 92:4, 2002, 727–28

  5. G Wu, Ending poverty in China: What explains great poverty reduction and a simultaneous increase in inequality in rural areas?, World Bank, 19 October 2016

  6. In May 2022, the World Bank adjusted the US$1.90 measure from 2011 prices to US$2.15 in 2017 prices, discussed in more depth later in this theme. However, the associated data is expected only in 2023.

  7. R Sharma, The Rise and Fall of Nations - Ten Rules of Change in the Post-Crisis World. New York: Penguin Random House, 2016, 5; B Milanovic, The World is Becoming More Equal - Even as Globalization Hurts Middle-class Westerners, Foreign Affairs, 2020, September/October, 1–2.

  8. Updated from J Cilliers et al, Impact of COVID-19 in Africa: A scenario analysis to 2030, Institute for Security Studies, 12 July 2020

  9. K Georgieva, The great divergence: A fork in the road for the global economy, International Monetary Fund, 24 February 2021

  10. K Georgieva, The great divergence: A fork in the road for the global economy, International Monetary Fund, 24 February 2021

  11. For example, see: United Nations Department of Economic and Social Affairs, Income inequality trends: The choice of indicators matter, Social Development Brief #8, December 2019

  12. R Kozul-Wright, The Trade and Development Report 2017. Beyond austerity: Towards a global new deal, New York: United Nations Conference on Trade and Development, 2017.

  13. See T Piketty, Capital in the Twenty-First Century, Harvard University Press, 2018; Also: P Collier, The Future of Capitalism: Facing the New Anxieties, Allen Lane, 2018; D Moyo, Edge of Chaos: Why Democracy is Failing to Delivery Economic Growth and How to Fix It, Little Brown, 2018.

  14. The Economist, Inequality could be lower than you think, 28 November 2019

  15. For example, see: United Nations Department of Economic and Social Affairs, Income inequality trends: The choice of indicators matter, Social Development Brief #8, December 2019; Oxfam, The Commitment to Reducing Inequality Index 2018, October 2018

  16. The IFs forecast on poverty levels uses the average levels of income and a log-normal distribution as indicated by the Gini index. However, as the internal calculation using those variables will almost inevitably produce a rate of poverty at odds with those provided by national surveys, the system computes an adjustment in the first year for the subsequent forecast years.

  17. North Africa has relatively high levels of education compared with the rest of Africa and scores higher on almost all indicators of human development than sub-Saharan Africa.

  18. S Kwasi, J Cilliers and L Welborn, The rebirth – Tunisia’s potential development pathways to 2040, Institute for Security Studies, 31 August 2020

  19. P Edward and A Sumner, The Future of Global Poverty in a Multi-Speed World: New Estimates of Scale and Location, 2010–2030, Center for Global Development, Working Paper 327, 2013.

  20. By about 19 percentage points

  21. In 1970, Botswana still had an average GDP per capita that was US$1 246 below that of Ghana. Within four years, average income levels in Botswana surpassed Ghana’s and, by 1999, GDP per capita in Botswana was four times higher (US$7 167) than in Ghana.

  22. United Nations Economic Commission for Africa, Appraisal and review of the impact of the Lagos Plan of Action on the development and expansion of intra-African trade, UNECA Conference of African Ministers of Trade Meeting, 11th session, 15–19 April 1990, Addis Ababa, Ethiopia, 1991; FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.

  23. FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.

  24. For example, see: A Shah, Structural adjustment—a major cause of poverty, Global issues, 2013

  25. W Easterly, The Effect of International Monetary Fund and World Bank Programs on Poverty, Open Knowledge Repository, Working Paper (No 2517), 2001

  26. African Development Bank Group, 2017, Introductory remarks: Promoting sustainable industrial policies, in Industrialize Africa: Strategies, policies, institutions, and financing. Côte d'Ivoire: African Development Bank Group, 74.

  27. United Nations Economic Commission for Africa, Appraisal and review of the impact of the Lagos Plan of Action on the development and expansion of intra-African trade, UNECA Conference of African Ministers of Trade Meeting, 11th session, 15–19 April 1990, Addis Ababa, Ethiopia, 1991; FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.

  28. FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.

  29. FN Ikome, From Lagos Plan of Action (LPA) to the New Partnership for Africa’s Development (NEPAD): The political economy of African regional initiatives, PhD thesis, University of the Witwatersrand, Johannesburg, 2004.

  30. W Easterly, How the Millennium Development Goals are unfair to Africa, November 2007

  31. Z Bostan, Another false dawn for Africa? An assessment of NEPAD, 2011

  32. S Planting, A new ‘commodity supercycle’ is lifting the JSE, Daily Maverick, 14 February 2021

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  34. According to research by the Bank of Canada, the previous commodity supercycles have peaked in 1904, 1947 and 1978 and lasted for 33, 29 and 34 years, respectively, from trough to trough. Commodity prices subsequently declined to 1995. The most recent supercycle peaked in 2011; B Bahattin Büyükşahin, K Mo and K Zmitrowicz, Commodity price supercycles: What are they and what lies ahead?, in Bank of Canada Review, Ottawa: Bank of Canada, 2016, 37.

  35. T Gylfason and G Zoega, Natural Resources and Economic Growth: The Role of Investment, World Economy, 29:8, 2006, 1091–115.

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  37. L Diamond and J Mosbacher, 2013, Petroleum to the People: Africa’s Coming Resource Curse – and How to Avoid It, Foreign Affairs, September/October, 87–88.

  38. United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016

  39. United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016

  40. United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016

  41. United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016

  42. United Nations Development Programme, Primary commodity boom and busts: Emerging lessons from sub-Saharan Africa, March 2016

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  52. International Monetary Fund, Regional Economic Outlook. Sub-Saharan Africa: Capital flows and the future of work, Washington: IMF, 2018, 6

  53. Johns Hopkins School of Advanced International Studies, Data: Chinese loans to Africa; Exx Africa, Africa lobbies for debt swap to avoid wave of sovereign defaults, Exx Africa Insight, 4 May 2020

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  61. F Muli, China promises to help Kenya deal with debt challenges, KahawaTungu, 18 January 2021

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  63. J Wheatley, IMF prepares to bolster developing countries’ finances, Financial Times, 5 April 2021

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  66. Banking on the Belt and Road Dataset: AidData's Global Chinese Development Finance Dataset, Version 2.0

  67. For example, Bank of China, Industrial and Commercial Bank of China, and China Construction Bank.

  68. A Wooley, AidData’s new dataset of 13,427 Chinese development projects worth $843 billion reveals major increase in ‘hidden debt’ and Belt and Road Initiative implementation problems, AidData, 29 September 2021

  69. For example, see SDG Target 8.1, Target 8.5 and Target 10.1; https://sdgs.un.org/goals/goal8.

  70. The MPI measures multiple deprivations in the same households in education, health and living standards across 10 indicators ranging from nutrition and child mortality to assets.

  71. In 2010, the UN Development Programme also launched its Inequality Adjusted Human Development Index and Gender Inequality Index.

  72. See: Oxford Poverty and Human Development Initiative, Global Multidimensional Poverty Index, 2018

  73. United Nations Development Programme, Human Development Report 2019: Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century, New York: UNDP, 2019.

  74. F Ferreira and C Sánchez-Páramo, A richer array of international poverty lines, World Bank, 13 October 2017

  75. D Sharma, Why the World Bank is taking a wide-angle view of poverty, Brookings Institution, 14 November 2018

  76. World Bank, Fact Sheet: An adjustment to global poverty lines, 2 May 2022

  77. J Manyika and K Sneader, AI, automation and the future of work: Ten things to solve for, 1 June 2018

  78. UNU-WIDER, Studies in Development Economics, in C Newman, et al. (eds), Manufacturing Transformation: Comparative Studies of Industrial Development in Africa and Emerging Asia, Helsinki:Oxford University Press, 2016, 5; See also: H Bhorat, R Kanbur, C Rooney and F Steenkamp, Sub-Saharan Africa’s manufacturing sector: Building complexity, Abidjan: African Development Bank, 2017.

  79. United Nations Conference on Trade and Development, The state of commodity dependence, Geneva: UNCTAD, 2019

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Cite this research

Jakkie Cilliers (2022) Current Path. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/thematic/01-africas-current-path/ [Online Resource] Updated 24 August 2022.