Is the con­ti­nent truly on its way up? Many African coun­tries are still overly de­pen­dent on com­modi­ties, while sev­eral also lack ba­sic in­fra­struc­ture. Now grass­roots move­ments are chal­leng­ing the eco­nomic sta­tus quo on the con­ti­nent.

Finweek English Edition - - IN DEPTH - By Pa­trick Bond

self- con­grat­u­la­tory rhetoric keeps spring­ing from the lips of World Eco­nomic Fo­rum (WEF) elites – at the ex­pense of re­al­ity.

Soft­ware ex­ec­u­tive Brett Parker claims that “Africa will prob­a­bly re­main nat­u­ral re­sources­driven for the next two decades at least”. African

Lead­er­ship Univer­sity’s Fred Swaniker says, “the Africa Ris­ing nar­ra­tive presents the most com­pelling ar­gu­ment for the con­ti­nent’s pros­per­ity”.

Their state­ments come at a time of low com­mod­ity prices. This has left so­ci­eties like Nigeria in pro­found cri­sis. And in spite of pe­tro­leum fall­ing below $30 per bar­rel ear­lier this year and hov­er­ing at $48 (at the time fin­week went to print), Stan­dard

Char­tered Bank econ­o­mist Razia Khan ar­gues that Uganda should keep pump­ing scarce in­vest­ment funds into oil ex­plo­ration. Pro­duc­tion in the coun­try will cost an es­ti­mated $70 per bar­rel.

The 2016 WEF on Africa, hosted in Ki­gali, claimed the “fourth in­dus­trial rev­o­lu­tion” – the use of “cy­ber­phys­i­cal sys­tems” like ar­ti­fi­cial in­tel­li­gence, robotics, nan­otech­nol­ogy and biotech – as Africa’s fu­ture. This is be­cause the con­ti­nent is “the world’s fastest-grow­ing dig­i­tal con­sumer mar­ket”. Yet fewer than a third of sub-Sa­ha­ran Africans have elec­tric­ity in their homes. The sum­mit merely re­in­forced ex­trac­tive-in­dus­try and high-tech myths.

But there is wide­spread so­cial re­sis­tance un­der way in Africa. Grass­roots protesters are ques­tion­ing the logic of ex­port-led “growth” and re­newed fis­cal aus­ter­ity. They are de­mand­ing that poli­cies meet their ba­sic needs in­stead.

Since 2011 the con­ti­nent has wit­nessed a dra­matic spike in so­cial protests, as recorded by the African De­vel­op­ment Bank (AfDB). The wave has not re­ceded. The bank said in its 2015 African Eco­nomic Out­look that there were five times more protests an­nu­ally be­tween 2011 and 2014 than in 2000. And af­ter the dra­matic “Arab Spring” – the 2011 North African demo­cratic up­ris­ing that was es­pe­cially acute in Tu­nisia, Egypt, Libya and Morocco – protesters picked up the pace in Al­ge­ria, An­gola, Chad, Gabon, Kenya, South Africa, Uganda and many other coun­tries.

The power of protests

Press re­ports col­lated by the AfDB con­firm that al­most all protests since 2011 have been about in­ad­e­quate wages and work­ing con­di­tions, the low qual­ity of pub­lic ser­vice de­liv­ery, so­cial di­vides, state re­pres­sion and a lack of po­lit­i­cal re­form. A few ex­am­ples il­lus­trate the im­pres­sive re­sults of re­cent protests. In Mozam­bique, wa­ter and food price hikes in Septem­ber 2010 catal­ysed con­sumers. Text mes­sages pro­posed a mass “strike”. This paral­ysed Ma­puto for a week­end. The protesters were met by lethal po­lice vi­o­lence. But they won: a price freeze was im­posed and new state ser­vice sub­si­dies were in­tro­duced. In Sene­gal, sus­tained demon­stra­tions in 201112 pre­vented au­thor­i­tar­ian ne­olib­eral pres­i­dent

Ab­doulaye Wade from serv­ing a third term. In Nigeria, the In­ter­na­tional Mon­e­tary Fund (IMF) im­posed the dou­bling of lo­cal petrol prices in Jan­uary 2012. This caused an up­ris­ing that, in the sub­se­quent fort­night, nearly over­threw the gov­ern­ment be­fore the in­crease was re­versed. In 2014 the most spec­tac­u­lar protest was in Burk­ina Faso. In the spirit of 1980s rev­o­lu­tion­ary Thomas Sankara, mass demon­stra­tions over­threw Pres­i­dent Blaise Com­paoré. The protests had be­gun in 2011 with vig­or­ous Burk­in­abé food riots. These were put down by lethal po­lice force that left more than a dozen peo­ple dead. Com­paoré’s at­tempt at a come­back in 2015 was sim­i­larly foiled. In Oc­to­ber 2015 South African stu­dents and low-paid univer­sity work­ers won the bat­tle for a 0% fee in­crease for 2016 and “in­sourc­ing” of ca­sual em­ploy­ment.

Some so­cial tur­moil is lo­calised, tak­ing place in the vicin­ity of mines and oil wealth. This is cor­re­lated in re­cent map­pings by the Lon­don-based Cen­tre for Eco­nomic Pol­icy Re­search, based on data gath­ered by Univer­sity of Sussex re­searchers, and on more than 200 stud­ies in the En­vi­ron­men­tal Justice Li­a­bil­i­ties and Trade re­search project’s “EJ At­las”.

Labour also reg­u­larly protests in Africa. Au­thors of the WEF’s Global Com­pet­i­tive­ness

Re­port ask busi­nesses in 140 coun­tries each year how they rate labour-em­ployer re­la­tions in terms of co-op­er­a­tion ver­sus con­fronta­tion. Of the third most mil­i­tant coun­tries in the world, African coun­tries typ­i­cally ac­count for 40%, far higher than any other re­gion.

Since 2012 – the year in which 34 min­ers were killed by po­lice in the Marikana Mas­sacre – the South African work­ing class has been ranked an­gri­est. The 2015 WEF rank­ings for the other most “con­fronta­tional” work­ers in­clude those from Al­ge­ria, Tu­nisia, Mozam­bique, Guinea, Chad, Liberia, Mau­ri­ta­nia, Le­sotho, Morocco, Cape Verde, Zim­babwe, Tan­za­nia, Sierra Leone, Sey­chelles, Ethiopia, Kenya, Cameroon and Gabon.

Fi­nan­cial out­flows

The pres­sures on many African so­ci­eties re­late to the con­ti­nent’s fis­cal stresses, since de­clin­ing com­mod­ity prices lower state rev­enues. These stresses also re­flect the mas­sive out­flow of funds by multi­na­tional cor­po­ra­tions via tax dodges and other il­licit routes. The African Union Panel on Il­licit Fi­nan­cial Flows last month raised the es­ti­mate to $80bn lost each year.

There is also the mat­ter of licit fi­nan­cial out­flows: the prof­its and div­i­dends taken off­shore legally by multi­na­tion­als thanks to dereg­u­lated ex­change con­trols, which must be paid in hard cur­rency. In South Africa, these have driven the past 15 years of cur­rent ac­count deficits – the trade deficit plus the out­flow of prof­its – which in turn led to a huge in­crease in the coun­try’s for­eign debt: from $32bn in 2000 to $140bn to­day. What to do next? The IMF’s April 2016 Re­gional

Eco­nomic Out­look for Africa sug­gests that “a sub­stan­tial pol­icy re­set is crit­i­cal in many cases […] Be­cause the re­duc­tion in rev­enue from the ex­trac­tive sec­tor is ex­pected to per­sist, many af­fected coun­tries also crit­i­cally need to con­tain fis­cal deficits and build a sus­tain­able tax base from the rest of the econ­omy”.

Pre­cisely this ne­olib­er­al­ism – a pol­icy “re­set” that in re­al­ity is more of the same – is one rea­son for what US aca­demics Adam Branch and Zachariah Mampilly term “Africa Up­ris­ing”.

Even if it is ig­nored in Ki­gali, or re­pressed on the ground, the pop­u­lar ris­ings against the WEF’s du­bi­ous “Africa Ris­ing” rhetoric await the sol­i­dar­ity of those with a more pa­tri­otic per­spec­tive on the con­ti­nent’s prospects.

Fred Swaniker Founder and chair­man of African Lead­er­ship Univer­sity

Razia Khan Econ­o­mist at Stan­dard Char­tered Bank

Ab­doulaye Wade For­mer pres­i­dent of Sene­gal

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