Africa Is Moving Ahead, But Not As Fast As Optimists Would Like – No Electricity, Infrastructure Deficiencies Impede Growth – Yet, The Internet Is Coming

By Paolo von Schirach

January 3, 2012

WASHINGTON – Economics expert Sebastian Mallaby wrote a very hopeful analysis of Southern Africa’s prospects for The Financial Times, (Africa hooked on growth after 12 years of progress, January 2, 2012). Citing hard data Mallaby argues that growth in Southern Africa is no blip. It is about a long term trend that is likely to lift the Continent up and away from stagnation and poverty into at least moderate prosperity.

A word of caution

It is indeed true that aggregate data support this argument. Still, a word of caution. The gap between Southern Africa and more developed country, not just in the West but in Latin America or Asia, is still immense.

Just look at any satellite photo of the Earth taken at night. Look at Europe and you see bright lights. Look at North Africa and, all along the Mediterranean costa line, you see bright lights. If you look south, you see darkness, because that is the mostly uninhabited Sahara Desert. But if you look further south it is still mostly dark. There are exceptions in East Africa around Nairobi and Mombasa and all the way down in South Africa, in the areas surrounding Johannesburg and Capetown. The rest is mostly dark, simply because there is no electricity.

No electricity, no economic growth

Just one satellite picture is evidence of Southern Africa’s current under development and by far the most significant challenges to future growth: no power, no economic activities and no growth. Everything else being equal, there is no way that any country on earth can aspire to significant new growth without access to affordable and reliable electricity. Of course, this huge structural impediment can be overcome. But it is going to take time and major capital investments.

Roads and railways

Then you have other infrastructure deficiencies. While some progress has been made, Africa still lacks a good network of modern highways and railways. In particular, most countries lack a good network of secondary roads linking farming communities to markets. If you combine the inability to transport produce to market and lack of state of the art cold storage facilities, you see that developing agriculture, a good way to lift the standard of living of rural communities while supplying food to the cities, is an immense challenge.

And you have bad governance. In Southern Africa there is still a sad combination of under resourced public administration and widespread corruption. This translates into a major difficulty in supplying basic services.

Missed opportunities in South Africa

And then you must add politics to the mixture. For instance, South Africa, by most measures the most advanced economy in the Continent, does not grow, nor is it able to narrow the gap between rich and poor, mostly because of ineffective leadership provided by a cumbersome ANC party structure. (See Cry, the beloved country, South Africa’s sad decline, cover story in The Economist, October 20 -25, 2012).

Broadband internet is coming

On the positive side, Africa is finally getting connected to the world via high speed internet provided through newly installed, state of the art fiber optic networks.

Prior to this development, internet penetration was only about 10% throughout Africa. And much of it was slow and expensive. Indeed, until yesterday, Africa was the best living demonstration of the negative impact of the “digital divide” on economic and social development.

The end of the “digital divide”

In the future, real time, cheap connectivity, once fully deployed and available to the average consumer, will do wonders to end African isolation and cultural insularity. Affordable communications and interactions with the rest of the world will stimulate everything: reforms, improved education standards, and knowledge transfers in every field, from technology to medicine, to agriculture or water management.

Africa is indeed moving ahead. But realistically it is going to take time, as the hurdles are still immense.

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