AFRICA 2016 .... The Economist magazine
Africa 2016 - From THE ECONOMIST magazine
A revolution from below
Jonathan Rosenthal
Africa is redefining what it means to be middle class
Small as this class may be, it is already having outsized effects in driving innovation
Two crenelated stone towers rise above a medieval portcullis and gate that has sprouted incongruously between the huge grey granite domes that ring Abuja, Nigeria's capital. This is Nigeria's Wonderland Amusement Park, a Disneyesque collection of roller-coaster, Ferris wheel, car rides and snack shops. In most respects it is unremarkable. Like similar parks scattered across the rich world it is designed partly to entertain children and mainly to test the patience of their parents (while separating them from their cash). It is unusual in one crucial respect: for years it was perhaps the only amusement park to be found in the 2,500 or so miles separating the southern fringes of the Sahara and South Africa's northern borders.
In 2016 and over the years that follow ever more African children will be swirled around or hurtled into the air. After a decade of rapid economic growth across most parts of sub-Saharan Africa, millions of families have seen their incomes increase enough that they can start spending on more than life's necessities. Signs of this are visible almost everywhere. In Nairobi cranes jut into the sky while in Lagos new car dealerships shine a blaze of generator-powered light onto streets darkened by blackouts. This growing class of consumers is attracting a herd of private-equity firms and multinational consumer-goods companies, to cash in on what McKinsey, a consultancy, called Africa's "single-largest business opportunity".
This seems fanciful. Even though the region's economy has expanded at an average pace of close to 5% over the past 15 years—enough to have more than doubled economic output—the proceeds of this have not been evenly distributed. Moreover, most poor Africans were in such deep poverty that even a doubling of income (from say $1 to $2 a day) is not enough to lift them out of it. Among the biggest boosters of the idea that Africa's middle class would explode is the African Development Bank. In an influential report in 2011 it reckoned that this class had already tripled in size in 30 years and was 300m strong. Yet its study was based on the bold classification of the category as including anyone with more than $2 a day to spend. About half of this supposed middle class live on less than $4 a day.
A somewhat more sober assessment by South'!
Africa's Standard Bank that is based on the spending power and consumer habits of families (whether they have a television, for instance) reckons that there are just 15m middle-class people in 11 of sub-Saharan Africa's biggest economies. Almost a third of these live in Nigeria; hardly any are in Ethiopia.
Small as this class may be, it is already having out-sized effects in driving innovation that will allow it to enjoy many of the goods that were once the preserve of richer folk. In 2016 the impact will be felt across many areas of life—and in ever more parts of Africa.
Do-it-yourself development
Take private schooling. In Lagos, Nigeria's richest city, most government-run schools are dilapidated and staffed by teachers who often show up drunk, if they show up at all. In 2012, when researchers calculated that almost 60% of children weren't attending school, the state government was flummoxed: tens of thousands of kids could be seen on the streets going to and coming home from schools. A survey of households found that almost all of these children were attending (mostly unlicensed) private schools, many of which charged less than 25,000 naira ($125) a year. This has nudged the government into improving state-funded schools by, among other things, looking at bringing in private-sector operators such as Bridge International Academies, a business that provides schools to about 100,000 Kenyan children at a cost of $70 a year.
In health care, street-side clinics offer many of the services that the state has failed to provide. Cheap equipment (much of it bought second-hand from the rich world) is allowing private doctors in Ibadan, Nigeria's third-largest city, to offer scans and x-rays that the local hospital does not. Mobile phones have moved from the hands of bankers on Wall Street into those of most African adults, helping provide access to financial services.
This emerging middle class, even as it fends for itself in terms of public services, is demanding more of the state. Elections held in Nigeria in 2015 were the cleanest in decades, largely because people with phones recorded the tally in thousands of voting stations, tweeting or posting the results so that they couldn't be rigged by the incumbent party. With presidential or legislative elections coming up in 2016 in several countries (see below story), this new class could find itself on a political roller-coaster too.
Who needs real horn?
Benjamin Sutherland
A new product should change the market for rhino horn
A Chinese brewery has already expressed interest
To reduce the rhino poaching concentrated in South Africa, conservationists have been pumping out media campaigns that tell rich Chinese and Vietnamese consumers that it's a gruesome shame to kill the majestic beasts for horn with no more medicinal or aphrodisiac properties than clippings of human toenail. A South African firm, Rhino Rescue Project, has been trying a more radical approach, sedating rhinos to inject their horns with poison that will sicken and embarrass unwitting consumers. But none of this has helped much, it seems. The end price of horn from a single rhino has risen above $450,000 in some black-market sales. Rhino poaching in parts of Africa has become so aggressive it now resembles "a form of guerrilla warfare", says Roland Goetz, an adviser to Angola's environment minister. If the rhino slaughter is to be slowed, something else is needed, says Matthew Markus, CEO and co-founder of an American biotech startup called Pembient. In 2016 the company will launch a product that it believes will reduce rhino poaching. Conservationists and economists will be watching closely to see if what Pembient terms "conservation 2.0" works—or, in a tragic twist, makes the killing even more lucrative.
Pembient is synthesizing artificial rhino horn to sell so cheaply that, it hopes, buyers will stop paying the high prices that motivate poachers. As it stands, a poacher is typically paid between $10,000 and $30,000 per rhino killed in South Africa's Kruger National Park (KNP), says Annette Hubschle, a Cape Town researcher who interviews poachers (many are in prison). She will study how Pembient's product changes trafficking once sales of faux horn begin at about $7,000 a kilo, a tenth that of real horn. Pembient plans to sell it to producers of medicinal remedies, skin creams, jewellery, carved housewares, snuff and drinks (a Chinese brewery has already expressed interest).
False economy?
An abundance of artificial horn will undercut poachers' pay, Mr Markus argues, leading many to quit risky work: by one tally, more than 220 poachers have been killed since 2008 in KNP alone. Others, however, reckon that demand for the supposedly more prestigious real horn will survive—discount handbags, after all, haven't killed the market for exorbitant designer ones. The demand may even climb thanks to inevitable slick advertising for new types of "rhino" products.
If it does, many in South Africa's government would quietly be pleased. It owns 25 tonnes of rhino horn and will decide in 2016 if it will push for authorizing legal sales that would turn that into cash, says Michael't Sas-Rolfes, a Cape Town economist. Once Pembient's artificial horn hits the market, he will be among those studying its impact on horn trafficking for South Africa's environment ministry. ■
Benjamin Sutherland: freelance correspondent, The Economist
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:2016 = IN BRIEF
Continental drift
Xan Smiley
editor at large, The Economist
The "Africa rising" narrative still prevails, but there are pitfalls ahead
Viewed since the turn of the century, Africa remains far more hopeful on a range of indices than it was during the preceding post-colonial decades. Despite swathes of chaos, corruption and dictatorship, democracy and economic growth are the norm in a fair chunk of its 49 countries south of the Sahara: a far better record than in the neighbouring Arab world. And though the rate of growth in 2016 will plateau or even decline, because of the fall in commodity prices precipitated by lessening demand in China for raw materials, African economies on average will still outpace most of the rest of the world. Western investors will still keenly sniff around.
Western governments, however, will in the year ahead put much of their energy into seeking to contain the spread of terrorism across a vast stretch of Africa's Sahelian belt. It runs from Mali in the west, through northern Nigeria, eastwards along the faultline dividing the rump state of Sudan and the dismal new state of South Sudan, and right across to Somalia. There is no reason to believe that, in the round, the situation will worsen. But nor is it certain to improve.
France and its African allies will not allow jihadists and separatists again to threaten Bamako, Mali's capital. The government of Nigeria under President Muhammadu Buhari will gain ground against the maniacs of Boko Haram in the country's north-east. The UN, again with France to the fore, should hold the ring in the strife-ridden Central African Republic, where Muslim-Christian animosity will remain high. And the African Union, aided by Western mediators, will strive to heal the hideously bloody divisions, to a large degree ethnic, that have blighted the new state of South Sudan. The jihadists of the Shabab in Somalia will not disappear, though they will be contained. They will hobble tourism in neighbouring Kenya, which will nonetheless remain the all-purpose hub of eastern Africa.
But in most of the rest of Africa, economic and political progress will march on with the odd stumble. The two beefiest powers in the continent, Nigeria and South Africa, will see the balance of their relative strengths tip further Nigeria's way, as its higgledy-piggledy economy swells while South Africa's, though still far more sophisticated, will mark time. Much will depend on Mr Buhari, a former general, maintaining the momentum that followed his election in mid-2015. By contrast South Africa's President Jacob Zuma will flounder. Indeed, if the liberal opposition party the Democratic Alliance, makes headway in local elections in mid-2016, perhaps even preventing the ruling African National Congress from having an outright majority in Tshwane or Johannesburg, the two municipalities in the country's industrial heartland, a head of steam may rise within the party to oust Mr Zuma before the end of his term, as happened to a predecessor, Thabo Mbeki.
Elsewhere, the argument will remain unresolved between those who think authoritarian but economically dynamic governments, such as those led by Paul Kagame in Rwanda and Hailemariam Desalegn in Ethiopia, improve lives across a range of measures for ordinary people faster than those that remain more democratic and full of vitality but messier and more corrupt, such as Kenya or Ghana. Ethiopia, the second-most-populous country in Africa, will see more foreign investors than in 2015, especially if its economy loosens up.
Believers in democracy will be hoping that elections in Zambia (in September) and Ghana (in December), both countries where democracy has looked well entrenched of late, will go smoothly. In Uganda President Yoweri Museveni, having changed the constitution to let himself run yet again after 30 years in power, will probably be re-elected, though a rebel from within his own party, Amama Mbabazi, a former prime minister, will try to give him a run for his money.
To stay or to Congo?
In the Democratic Republic of Congo, always one of Africa's least governable countries, Joseph Kabila may perhaps submit to pressure at home and abroad by standing down in November as his constitution requires. Jose Eduardo dos Santos, who has presided over Angola since 1979, faces no such constitutional qualms, but will hear louder-than-usual grumbles as his oil-dependent economy groans; his daughter Isobel should retain top spot as Africa's richest woman.
In Zimbabwe Robert Mugabe, 92 in February and increasingly ga-ga, may at last— even if he stays alive—have to give way to one of the hard men around him, probably Emmerson Mnangagwa, rather than pass the baton to his ambitious wife Grace, his junior by 41 years. But at least African progressives can draw comfort from the fact that in 2016 the likes of Mr Mugabe will be the exception rather than the rule. ■
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