The vanishingly small African middle class

The Economist reports:

Screen Shot 2015-10-23 at 12.50.11 PMGood data on the exact size of the middle class are hard to come by, but it remains small across most parts of the continent. The Pew Research Centre, an American outfit, reckons that just 6% of Africans qualify as middle class, which it defines as those earning $10-$20 a day. On this measure the number of middle-income earners in Africa barely changed in the decade to 2011.

…… Unlike Asia, Africa has failed to develop industries that generate lots of employment and pay good wages. Only a few countries manufacture very much, largely because national markets are small and barriers to trading within Africa are huge. Most people who leave the countryside move into labour-intensive but not very productive jobs such as trading in markets. John Page, also of Brookings, reckons that such jobs are on average only about twice as productive as the ones that many left behind.

Did European Colonialism Benefit Africans?

“We find it difficult to bring the available evidence together with plausible counter-factuals to argue that there is any country today in Sub-Saharan Africa which is more developed because it was colonized by Europeans. Quite the contrary.”

That is Leander Heldring and James Robinson writing in a new paper on the negative impact of colonialism on Africa’s economic prospects.

Source: Wikipedia

Source: Wikipedia

Interesting attempt at positive analysis of a difficult subject (esp. with regard to counter-factuals), although normative undertones drive most of the analytical narrative.

The negative legacies of colonialism – despotism, negative ethnicity, aid dependence, and general underdevelopment, etc – certainly do persist.

But for those unwilling to submit to the gods of path dependence, the question remains of how long incompetent African leaders will continue to blame outsiders for their own ineptitude. After half a century of independence, many Africans are wary of being the only ones left in the “bottom billion” once the East and South Asians climb up.

To paraphrase Achebe, the trouble with Africa is simply and squarely a failure of leadership. There is nothing basically wrong with the African character. There is nothing wrong with the African land or climate or water or air or anything else. Even external conquest and subsequent colonialism was not unique to Africa.

H/T Chris Blattman.

Re-assessing Africa’s Resource Wealth

Over at African Arguments Bright Simons tries to debunk the accepted paradox of African poverty in the middle of a natural resource glut. The post is definitely worth reading, and raises some salient questions regarding resource use and development policy in Africa – and by extension, the economic viability of some African states (thinking of Chad, Central African Republic and Niger….)

Of those few minerals that Africa is believed to hold globally significant or dominant reserves, nearly all of them are concentrated in 4 countries: South Africa, Angola, Democratic Republic of Congo and Guinea. When one computes the level of inequality of mineral distribution across different continental regions, Africa pulls up strongly, showing a far higher than average level of distribution ‘imbalance’ per capita or square mile. In very simple terms, it means that mineral wealth is more concentrated in a few countries in Africa compared to other continents. 

Adding that…..

with the exception of bauxite and petroleum, these minerals are not as widely used in industry (or in the same considerable volumes) as a number other minerals, such as tin, copper, nickel, zinc, iron, coal, and lead, that Africa does not produce in sufficient quantities. Indeed, of the top 5 metallic minerals which constitute 62 percent of the total value of global production, Africa is only a significant producer of one of them: gold. Africa has 8 percent of the world’s copper, 4 percent of aluminium, 3 percent of its iron ore, 2 percent of lead, less than 1 percent of zinc, and virtually no tin or nickel. To put these figures into perspective, recall that Africa has about 14.5 percent of the world’s population.

….. Africa’s low production of the ‘hard minerals’ minerals most intensely used in industry compared to the less widely used ‘soft minerals’ reduces its total take from the global mineral trade. But it also makes a nonsense of fashionable policy prescriptions that emphasise import-substitution strategies based on value addition to minerals, rather than export competitiveness through smart trade strategy and the deepening of the financial system to support entrepreneurs.

More on this here.

H/T Africa in Transition.

Persistence of Culture (and Institutions)

“How persistent are cultural traits? Using data on anti-Semitism in Germany, we find local continuity over 600 years. Jews were often blamed when the Black Death killed at least a third of Europe’s population during 1348–50. We use plague-era pogroms as an indicator for medieval anti-Semitism. They reliably predict violence against Jews in the 1920s, votes for the Nazi Party, deportations after 1933, attacks on synagogues, and letters to Der Sturmer. We also identify areas where persistence was lower: cities withhigh levels of trade or immigration. Finally, we show that our results are not driven by political extremism or by different attitudes toward violence.”

That is Voigtlander and Voth writing in the Quarterly Journal of Economics.

Their paper speaks to my previous post on the challenges of institutional engineering given the stickiness of institutions (and by extension the cultures that create and then reinforce them). Of course culture is a dicey subject that is often misused to explain economic and social outcomes. Instead of using the amorphous term “culture” I prefer to hear more about the reward systems that make it beneficial for individuals and communities to engage in certain cultural practices.

On a more positive note, the paper provides some evidence of the power of economic opportunities to dis-incentivize engagement in hateful cultural practices:

“Instead of reinforcing persistence, we argue that economic factors had the potential to undermine it…… Our results also lend qualified support to Montesquieu’s famous dictum that trade encourages ‘‘civility.’’

A critique of african culture

“A way of life which made it possible for our ancestors to be subjugated by a handful of Europeans cannot be described as totally glorious.”  Professor Peter Bodunrin

I am no Western apologist. I am a proud son of the soil (as Wahome Mutahi of the Whispers fame used to say) and a believer in the fundamentals of African socio-economic organization – a way of organizing society in which I am because we are. But I am no blanket African apologist either. And that is why I particularly like the candor of Bodurin. I am sick and tired of hearing Afrocentric thinkers prattle about how the life of the Afircan is serene. How it is untouched by modern greed and desires for material wealth. How it still embodies the true spirit of humanity.

I am tired because this kind of talk reminds me of Rousseau’s critique of arts and sciences in his first discourse – in which he talks about “uncivilized” peoples being noble savages and portraying this as the true nature of man that we should all aspire to. This is bull. It is bull because when you go hungry. When you cannot read or write. When your children die of simple treatable illnesses. When your entire life is lived in a dystopia that has lasted generations. You are not noble, savage or not. You are subordinate to nature and all its mysteries.

A little reality check will establish that there is almost nothing noble about the life of the African at this point in history. We are the laughing-stock of the world. Images of starving children and scary deranged men in war zones are what define us to the rest of the world. It therefore disturbs me quite a bit when I hear our leaders talk about “African culture” and the need to preserve it.

What culture is it that these men are talking about? Is it the culture that keeps millions upon millions hungry and illiterate? Is it the culture that allows them to marry five wives and oppress them as they so wish? Is it the culture that makes us apathetic politically and allows them to steal from us? If this is the culture they are talking about and that they want us to preserve then I am against it. I am against it because it burdens us with a docile and meek morality that is blindly accepting of hierarchy and ideologically impoverished authoritarianism.

I am no sociologist but I know that there is something fundamentally wrong with how we have come to organize our societies in the post-European-contact era. All our social institutions have come to be either European or in reaction to Europe. I say that it is time we went back to true Africanness. True Africanness means caring for one another. It means providing for the hungry and only indulging in excesses after everyone has what they need to live a decent life. It means an appreciation of nature in a way that only Eastern traditions come close. It means being passionate about life and its blessings – I believe it is Senghor who said that Africans are a people of passion and not reason. I want to go further and say that we are a people who are passionate about all that we do (including our use of reason).

The African is alive. We are not like the Westerner who is chained by “norms” or the Easterner who blindly denies his humanity as he strives for higher rewards. We are alive! We embrace humanity with vigor and rhythm. We are as diverse as diverse can get. And we care for one another – valuing human life like no other human society does. (Do not let the wars delude you. I am yet to meet a people who have as much a reverence for human life as does the African. This is one of the foundations of African Philosphy – that life is cyclical, the living, the dead and the unborn all participate and so all life is revered. Just look at African burial ceremonies and mourning rituals if you are in doubt.)

It is time we returned to the fundamentals. We should be careful not to confuse true African culture with practices that came out of poverty or contact with Europe and in some instances Arabia. When we return to these fundamentals, we will find that African culture is not at all incompatible with modernity. We can stop being nomads when it is not economical to do so. We can stop having a thousand children per household. We can stop wife-inheritance. We can stop wife-beating. We can stop female genital mutilation and all evils against our mothers and sisters. All these practices are not African. They are human, and temporal. We should see them as habits from an era gone by. And we can change them.

What makes us African is in our social relations. Not in the environment or our economic condition. We will only return to that greatness when we restructure our social organizations and carefully remove all foreign practices that have tainted the Spirit of Africa.