Africa Rising? Part 2

In keeping with the theme of posting random links, more reading material for you.  Enjoy.


Developing countries receive about $136 billion in aid from donor countries each year. At the same time, however, they lose about $1 trillion each year through offshore capital flight, mostly in the form of tax avoidance by multinational corporations. That’s nearly 10 times the size of the aid budget.

Because rich countries include debt cancellation as aid, it is only fair that we include debt service payments as part of the equation as well. Today, poor countries pay about $600 billion to rich countries in debt service each year, much of it on the compound interest of loans accumulated by rulers long since deposed. This alone amounts to nearly five times the aid budget. Using this metric, economist Charles Abugre calculates that the net flow of aid from the West to the Global South over the period 2002 to 2007 was minus $2.8 trillion. And that does not include the capital flight that I mentioned above.

Mo Ibrahim’s overall message is that things are improving in Africa, but in a slow and complex fashion. Rather than ‘Afropositive’ or pessimism, he calls for an Afro-realism, which means ‘be patient and study the numbers’. This may not be the sexiest headline, but it does do justice to the fine quantitative work that makes the Index on Governance possible.


The most popular view, supported by the likes of the New York Times and the World Bank, all powerful influencers of how the world thinks about Africa, puts the number of AMAC’s at more than 300 million, a diverse basket that includes all sorts: cattle-ranchers, road-side food vendors, taxi drivers, railway pensioners etc.

But this view has its critics, and though they are not as often heard, they shout when they get the opportunity, saying things like: only 5% of African consumers qualify for the ‘middle-class’ tag. If that position was valid, it would mean the AMAC class has suddenly shrunk from 300 million-plus all the way down to about 40 million or 50 million people (bearing in mind that even the exact population in Africa is debatable due to weak census data in many African countries).

But that is not even the most disconcerting view. Someone has actually said that there is basically no middle class consumer segment worthy of any serious analysis in Africa at all. Mind you, he is not just some party-pooper who just walked in from the street; he is a serious finance professional who only happens to hold the view that Africa has only two super-classes: the uber-rich and a large sprawl of poor people who nevertheless are inclined towards consumption (perhaps in just the same way that Asians are seen as inclined towards saving). You can of course choose to interpret that view to mean either that the celebrated AMACs are just poor people who have developed a habit of living above their means or that they are low-income earners with rapidly rising wages. But however you choose to spin it, the fact remains that your target consumer base has now shrunk to zero. From 300 million to zero, now that’s something.

Failing states without social safety nets and with poor health care, collapsing municipal and state services and a general lack of opportunity to thrive are major drivers of migration.
This the underlying reason that Sengalese, Somalians, Chadians or numerous other African nationals seek refuge and opportunity in Europe. They are no different to Salvadoreans, Mexicans or Columbians seeking Elysian fields in the USA or Canada. These millions of migrants assume huge risks on their perilous journeys and are prone to further exploitation and abuse at their eventual destinations.

Globalisation sees increasing liberalisation of trade in goods and services to the advantage of the developed north. While immigration of skilled labour is embraced by the north - again exploiting scarce African resources - the same does not apply to unskilled migrants. Africa has effectively been reduced to the role of a captive, continental-scale colony, where its land, resources, environment and people are exploited by the developed world.

While the Time article reports that 25.1% of drinkers in the WHO Africa region drink too much, it fails to mention that the majority of people on the continent don’t drink at all, according to the WHO data. The WHO estimated that in 2004, 57.3% of the “Africa region” were lifetime abstainers and 70.8% reported not consuming alcohol in a year. By comparison, only 18.9% of Europeans and 17.7% of the United States population were lifetime abstainers.

So now it's your turn. Take this quiz, compiled by RNW, to find out how corrupt you may be...

Over the past decade Angola has been one of the world’s fastest-growing economies. GDP grew at an 11.6% annual clip from 2002 to 2011, driven by a more than doubling of oil production to 1.8 million barrels a day. The government budget sits at $69 billion, up from $6.3 billion a decade ago.

But predictably, precious little of the windfall has made it to the people. Some 70% of Angolans live on less than $2 a day. And by the government’s own count, 10% of the country’s population is scrambling for food due to drought and bureaucratic neglect. So where’s the money going? Start with a paranoid president-for-life. The state security apparatus sucks more funds from the budget than health care, education and agriculture combined. A lot is clearly stolen: Between 2007 and 2010 at least $32 billion of oil revenue went missing from the federal ledger, according to the International Monetary Fund, which later tracked most of the money to “quasi-fiscal operations.” Angola comes in at 157 out of 176 nations ranked by Transparency International’s Corruption Perceptions Index. It trails shining stalwarts of participatory democracy such as Yemen and Kyrgyzstan. And it’s within this environment that Isabel dos Santos has surfaced with an estimated net worth of $3 billion.

Dr. Mukwege says: “The perpetrators of these crimes destroy life at its entry point. The women can no longer have children. Often they get infected with AIDS… Their men are humiliated. So the perpetrators destroy the entire social fabric of their enemies, their communities, their future generations, without even killing the woman. A line has been crossed here, which should have been an absolute taboo. But because those parts of the body are not usually visible, it is not as obvious as other forms of mutilation.”