For the past decade, the narrative of “Africa Rising” has been dominant. In hindsight, it was largely the product of high prices for Africa’s export commodities, especially oil, the continent’s rapid urbanization, an over-estimation of the growth of a middle class, over-reliance on dubious statistics, and more than a dollop of wishful thinking. “Africa Rising” was also a useful marketing tool for those seeking to raise capital for investment on the continent.
With the collapse of oil and other commodity prices, the slow-down in China’s economy, and second thoughts about urbanization without the necessary infrastructure, especially electric power and schools, the pendulum is swinging the other way. The risk is that overoptimism will be replaced by undeserved pessimism, especially in the United States, where the economic links with Africa are less developed than those with Europe and Asia. Norimitsu Onishi makes the point that excessive pessimism can be as misleading as overoptimism in his thoughtful “African Economies, and Hopes for a New Era, Are Shaken by China,” in the January 25 New York Times.
The current economic woes of Nigeria are largely the result of falling oil prices, the inability of the government to tax the non-oil wealth of the country, and structural corruption. In South Africa, falling commodity prices exacerbate the effects of the region’s worst drought in many years, itself perhaps a consequence of climate change. However, South Africa has a robust institutional and economic infrastructure, and its economy is likely to recover relatively quickly, especially with the return of rain. Onishi also makes the point that East Africa is likely to weather the current economic downturn better than other regions because its economies are not dependent on a single commodity such as oil.
The point is that sub-Saharan “Africa” is a region of countries that no more lends itself to generalization than any other part of the world. In big countries, such as Nigeria and South Africa, there are huge regional differences as well, with plenty of economic opportunites even if the “Rising” narrative is discredited.