Coastal West Africa and Nigeria, the Great Lakes region, the Ethiopian highlands, the Nile Delta and the Mediterranean coast pack half of Africa’s population.
Source: interesting maps
Africa’s population is projected to keep growing for the next century (see UN projections below), although current projections most certainly overestimate the rate of growth. 
This is from the China-Africa Project:
In purely economic terms, China matters a LOT to Africa but Africa is effectively meaningless to China. Last year, China did more than $4.14 trillion in total global trade. So that means Africa represents just 4.8% of China’s global trade balance, effectively a rounding error for the world’s second-largest economy.
For some additional context, consider that China does more trade with just Germany ($225.7 billion) and about the same with Australia ($194.6 billion) than it does with all of Africa.
This is from The Economist:
Government revenues average about 17% of GDP in sub-Saharan Africa, according to the IMF. Nigeria has more than 300 times as many people as Luxembourg, but collects less tax. If Ethiopia shared out its tax revenues equally, each citizen would get around $80 a year. The government of the Democratic Republic of Congo is so penurious that its annual health spending per person could not buy a copy of this newspaper.
… Since the 1980s governments have followed an IMF-inspired recipe: slashing trade taxes, reducing top rates on personal and corporate income, and embracing value-added tax. Data from the OECD for 26 African countries show that over half of their tax revenues come from taxes on goods and services. Only a quarter comes from personal income tax and social-security contributions (about the same as in Latin America, but much less than in the rich world). From 2008 to 2017 the ratio of tax receipts to GDP rose by 1.5 percentage points, but in many countries this was offset by falls in non-tax revenues, such as fines, rents and royalties from resource extraction.
Nigeria, Africa’s biggest economy, collects less than 10% of GDP in taxes.
Of course taxation shouldn’t be an end in itself. It must be accompanied with effective provision of public goods and services. Overall, weak state capacity is the most significant barrier to both political and economic development on the Continent.
This is from Aubrey Hruby, one of the sharpest minds on Africa-US business relations:
For American companies to compete properly in African markets, the administration needs to take a broader look at capital flows into African markets and the diversifying forms of Chinese commercial engagement. This report argues for a broadening of the competitive lens beyond infrastructure and seeks to provide a more comprehensive framework for examining China’s commercial interests in Africa. It presents two models through which policy makers can understand recent developments in the region. The first describes the G2G nature of Chinese infrastructure financing, summarizing the mechanisms by which Chinese state-owned enterprises typically secure contracts, and contrasts it with the government-to-business (G2B) structure of US development finance. Secondly, the brief analyzes US investment in African markets across capital flows, and notes the rising competition from Chinese firms in each category.
Here is Hruby talking with Eric & Cobus on The China in Africa Podcast.
This summary of Nigerian president Muhammadu Buhari ‘s cabinet picks says it all:
With an extra five members, stuffed with party loyalists and an average age of 60, President Muhammadu Buhari‘s new ministerial team cannot be accused of exuding dynamism or imagination. Announced two days after about a dozen people were killed in the capital when Shiite protestors clashed with armed police, the composition of the new government reinforced the sense of a lack of executive urgency as the country’s national security crisis was spiraling out of control.
The list reinforces the view that President Buhari’s second term will be like his first: tortuously slow decision-making, a reluctance to sanction bad performance in the security services or in the ministries, personal loyalty trumping competence and a tolerance for politicians facing serial corruption charges.
…. The youngest nominee at 46 – five years older than France’s current president – is Ali Isa Ibrahim Pantami (Gombe), a world class technology expert and trained Imam who has led the National Information Technology Development Agency since 2016.
The median age in Nigeria is 17.9 years (which is not to say that cabinet ministers should be in their twenties).
The problem with having such an old cabinet is that ministers are likely to employ equally old lieutenants, with the outcome being that everyone in government ends up being either too tired to put in the much needed work or too busy with their personal “businesses”.
The trouble with Nigeria is simply and squarely one of leadership.
This is an old piece that is nonetheless fascinating:
Large-scale Nigerian migration to China began in the aftermath of the 1980s Deng Xiaoping reforms, which opened China to the international community. The first wave of Nigerian migrants to China arrived in the late 1990s.
…. The Nigerian community in China has elected officials who preside over matters affecting their members. The post of ‘President General’ is an elected position, in line with a Constitution that gives anyone holding office term limits of two tenures. As of March 2016, the President General had completed the tenure of his predecessor who stepped down and another election was planned towards the end of the year. The President General organizes the community, ensuring that safety, representation and support are accessible. The Nigerian migrant community is also made up of sub-communities between which the President General solves power imbalances.
….. There is an informal justice system within the Nigerian community in China that facilitates dispute resolution at a micro level—which, practically, the Chinese government cannot enforce due to the clandestine existence of many individuals. In my interview with Mr. T (not real name), he stated that the Nigerian community has a task force that handles policing on behalf of the community.
The justice system is presided over by executives (judges) who settle cases brought before them. According to a member of the community, the judges are elected and not appointed. They are often people well respected within and outside the community; as a result, people obey their directives.
Apparently, 20 years.
….. Salgado was to take over his family’s sprawling cattle ranch in Minas Gerais—a region he remembered as a lush and lively rainforest. Unfortunately, the area had undergone a drastic transformation; only about 0.5% was covered in trees, and all of the wildlife had disappeared. “The land,” he tells The Guardian, “was as sick as I was.”
Then, his wife Lélia had an idea: they should replant the forest. In order to support this seemingly impossible cause, the couple set up the Instituto Terra, an “environmental organization dedicated to the sustainable development of the Valley of the River Doce,” in 1998. Over the next several years, the Salgados and the Instituto Terra team slowly but surely rebuilt the 1,754-acre forest, transforming it from a barren plot of land to a tropical paradise.
Now a Private Natural Heritage Reserve, hundreds of species of flora and fauna call the former cattle ranch home. In addition to 293 species of trees, the land now teems with 172 species of birds, 33 species of mammals, and 15 species of amphibians and reptiles—many of which are endangered. As expected, this rejuvenation has also had a huge impact on the ecosystem and climate. On top of reintroducing plants and animals to the area, the project has rejuvenated several once dried-up springs in the drought-prone area, and has even positively affected local temperatures.
Perhaps there is hope for countries like Nigeria (see graph) to eventually reverse the deforestation trends across the Continent over the last five decades.
Urbanization might help in the medium-to-long term, although its effects will be moderated by what happens to agricultural productivity. Climate change will matter, too. Finally, Kenya and Ethiopia provide suggestive evidence that the Continent’s ongoing population explosion might not decimate its forests after all. On Nigeria, it would be interesting to determine if the decline in forest cover is due to population growth or climate change effects in its central and northern regions.
Here are some interesting figures from the Center for Strategic & International Studies. Between 2010 and 2017 trade between African states and China rose from $91.2b to $165.4b. For the U.S. total trade volume contracted from $80.3b to $36.7b (admittedly some of this driven by declining oil prices). All major Western countries saw a decline in their trade volume with the Continent.
Germany is the only major Western country that saw its trade volume with African states increase over the same period.
These figures also underscore the recent narrowing of the Red Sea – with Gulf states pushing for ever closer ties with African governments. A lot of focus has been on the geopolitical aspects of this shift (with Qatar and Turkey jostling for influence vs Saudi Arabia and other Gulf states). But as the trade data suggest, trade is also an important feature of the evolving Afro-Arabia relations.
Overall, it is likely that African states’ economic policies and regulations, as well as votes at the UN, will shift to reflect the changes in the strength of the Continent’s trade links.
Japan is trying to stem the decline of its economic influence on Continent with a new joint insurance product with African Trade Insurance Agency and a Saudi bank. The U.S. is about to launch the U.S. International Development Finance Corporation.
At 35 per cent, the turn-out for Nigeria’s general election in February was the lowest for any presidential (and parliamentary) ballot since democracy succeeded military rule twenty years ago.
According to the International IDEA electoral turnout database, Nigeria’s turnout in the February presidential election was the worst recorded among African states (Click on image to enlarge. Figures indicate the most recent presidential election). That is, it was lower than even in dictatorships where presidential elections are often pro forma exercises designed to stroke autocrats’ egos.
Given what is at stake, one would have expected Nigerian elites to do all they could to make sure that their voters made it to the polls. The fact that they did not suggest a major political market failure, or specific interventions by powerful actors to keep voters from the polls.
Adewale Maja-Pearce, writing in the LRB, provides one possible explanation:
Oshodi is one of the big markets in central Lagos with many Igbo traders. To their exasperation, Tinubu shut it down two days before polling, while he strolled around protected by ‘security agents’, i.e. police. This show of power – which had been preceded by threats of new ‘taxes’ on the traders if they proved ‘stubborn’ – prefigured what was to happen when voting began. A lengthy complaint by PDP agents from several of the polling stations described how ‘hoodlums and miscreants led by Musliu Akinsanya … took over the conduct of the election at the polling units … with arms and ammunition.’ They carried other ‘dangerous weapons such as machetes, charms and amulets’ but the police made no attempt to arrest them. Independent observers concurred, as did YouTube, where you can see the ‘hoodlums and miscreants’ casually trashing ballot boxes while voters flee. In other parts of the state many voters simply stayed at home. The result was that Lagos reported the lowest turnout of any state at just 17 per cent of almost seven million registered voters.
I recommend reading the whole thing. It is a fantastic meditation on the state of Nigeria’s electoral democracy.
You would think that voters in Lagos, the wealthiest state in Nigeria (with a sizable revenue base) would have more skin in the game, and therefore register a higher turnout rate. However, Nigeria is no different than most low-income democracies where turnout rates among relatively poorer voters is often higher than among the rich.
Kasara and Suryanarayan explain why this is so:
The conventional wisdom that the poor are less likely to vote than the rich is based upon research on voting behavior in advanced industrialized countries. However, in some places, the relationship between turnout and socioeconomic status is reversed. We argue that the potential tax exposure of the rich explains the positive relationship between income and voting in some places and not others. Where the rich anticipate taxation, they have a greater incentive to participate in politics, and politicians are more likely to use fiscal policy to gain support. We explore two factors affecting the tax exposure of the rich—the political salience of redistribution in party politics and the state’s extractive capacity. Using survey data from developed and developing countries, we demonstrate that the rich turn out to vote at higher rates when the political preferences of the rich and poor diverge and where bureaucratic capacity is high.
This is from Quartz:
Jumia, the largest e-commerce operator in Africa, has today (April 12th) launched its landmark initial public offering (IPO) on the New York Stock Exchange.
The IPO marks a pivotal fork in the company’s journey since first launching operations in Nigeria in 2012 and expanding over time to 14 African countries with businesses across several verticals including food delivery, real estate, logistics, hotel and flight bookings.
The IPO priced the stock at $14.50. On Tuesday it closed at $43.04. Jumia started operations in Nigeria in 2012 but now has big markets in Cote d’Ivoire, Egypt, Kenya, Morocco, and South Africa. The firm is registered in Germany. South Africa’s MTN remains its largest shareholder.
In my view the most exciting thing about the listing is that it could result in the allocation of significant amounts of capital that is needed to unlock the Continent’s online retail market and link it to the wider world market. According to the FT:
…. mobile broadband penetration in Africa was 32 per cent, or 399m subscribers, in 2017. This was expected to rise to 73 per cent by 2022, to more than 900m subscribers.
The company said that less than 1 per cent of retail sales in the countries it operated in were conducted online, against 24 per cent in China, a sign of how undeveloped the African online market was.
I also foresee African regulators moving to force Jumia to have more of its operations domiciled on the Continent — both to create jobs and for tax purposes. The company CEO recently erroneously claimed that African countries do not have enough developers to justify the fact that its development office is in Portugal (and headquarters in Germany).
This is from Wilson VornDick, a commander in the U.S. Navy Reserve, writing in the National Interest:
It is unclear whether China could handle the financial repercussions of a larger, more systemic default or debt-forgiveness program across the African continent. Seeking relief, debtors to China would likely overwhelm existing mechanisms, like international arbitration, or China-backed forums such as the Export-Import Bank of China , China Development Bank , and Asian Infrastructure Investment Bank . More importantly, debt restructuring, recoupment, and, in the more extreme case, seizure may not be viable, reasonable, or sustainable for Chinese interests or presence continent-wide. Just such a dire economic scenario might push China to use its nascent military force to protect or even seize its interests. Looking back at the previous period of Great Power Competition more than a century ago, leveraging military might to force repayment was commonplace. The U.S. military made multiple incursions into Caribbean and South American nations as did the Western powers in Africa and Asia.
It is reasonable to assume that China would have little or no experience in any dire economic contagion across Africa. The one primary example, the take-over of Hambantota Port, was an isolated incident during calmer times, before the financial uncertainty stoked by a slowing global economy or the current U.S.-China trade war. Moreover, the port takeover has now become a watershed moment in Chinese behavior that has attracted significant international scrutiny and ire.
More broadly, VornDick articulates the potential merits (from a U.S. standpoint) of a “Let China Fail in Africa” strategy as part of Washington’s Great Power global competition with Beijing. The whole argument is worth a read.
A glaring omission in VornDick’s analysis, however, is the interests and roles of Africans in this whole game (note that this is a gap in the “China-in-Africa” genre more generally).
A key weakness that I see in the “Let China Fail in Africa” strategy is that it vastly underestimates the extent to which Africans will be willing to work hand in hand with China to make the Sino-African relationship work.
China’s forays in Africa is creating complex tapestries of personal and institutional relationships that will become ever harder to undo. For example, in both electoral democracies and autocracies in the region, citizens have come to expect political elites to provide public goods — many of them financed and built by China. Demands for more of the same will likely only get stronger. The desire to secure funding for more public goods will likely push African elites even closer to Beijing. Furthermore, at a time when the U.S. is working hard to signal that Africans are not welcome on its shores, tens of thousands of African students are earning degrees in Chinese universities. Many of these students will probably go back to their respective countries and maintain ties with Chinese business and academic contacts. These kinds of investments in soft power will matter in the long run.
Global diplomacy is not just about crass material interests. It is also about values and shared commitments to respectful mutual cooperation. If African elites become convinced that they are better off bandwagoning with China, they will do so.
And most importantly, having made that choice, they will make specific investments (whether deliberately or not) to make their nations ever more closely allied with China. They will adopt specific technologies. Establish specific market relationships. Acquire specific weapons systems. And yes, more of their students will learn Chinese and go on to earn degrees in China. The closer the military, economic and “soft” ties, the more African elites will be willing to make costly investments in order to ensure that their respective states’ relationships with China work.
A good lesson in this regard is francafrique. The relationship between France and its former colonies in Africa is not winning any awards soon. But for almost six decades African elites have remained committed to the relationship and worked to give the French military free rein in the region and French firms access to vast natural resources. The French state, in turn, has worked to prop up the same elites despite massive economic and political failings.
The point is: China’s failure in Africa (if it comes to pass) is not what will determine the future of Sino-African relations. What happens before any such failure will likely matter more.
This is from a story in The Guardian:
The ITDP bemoans Africa’s obsession with metros. Lagos in Nigeria – the largest city in the world without a functioning mass transit system – has been trying to build a metro since the 1980s. In the latest of many incarnations, the project was supposed to begin operations in 2012 at a cost of $2.4bn (£1.9bn). Six years after the supposed start date, construction is “nowhere near complete”, says Kost.
Abidjan, the economic capital of Ivory Coast, began construction of a metro last year. The French-financed and -built line is projected to carry 500,000 passengers a day at a cost of $1.7bn. Dar es Salaam’s bus system, by contrast, has capacity for 400,000 people and cost less than a 10th of that – about $150m.
Addis Ababa in Ethiopia opened a Chinese-built and -operated light rail line last year at a cost of $475m. Shenzhen Metro Group has a deal to run it for the first five years.
“With a metro, an international firm will often just parachute in its own system,” says Kost. “Bus rapid transit allows existing stakeholders to get involved. That’s what we did in Dar es Salaam and what we’re planning in Nairobi, where the bus bodies will be built in the city and local operators will look after tickets, fare collection and IT. It’s good for the development of the local economy.”
Regular readers know that I have a bias for Kost’s argument. Read the whole thing here.
H/T Dina Pomeranz.
This is from Bloomberg:
Nigeria loses $19 billion annually, or about 5 percent of gross domestic product, from the delays, traffic, illegal charges and insecurity that are increasingly prevalent at its ports, the Lagos Chamber of Commerce & Industry said in a report this year.
For perspective, that is slightly larger than the Zimbabwean economy.
So far it appears that the incumbent Muhammadu Buhari will win reelection. According to Africa Confidential:
His street support is still impressive across the north and he remains a force to be reckoned with – even if his APC allies are divided or upset with the primaries or his overall approach to governance. With the powers of incumbency behind him, he may hold the upper hand. Many of the 21 APC governors will also hold this advantage, but more of them will be vulnerable to PDP challengers, especially in Plateau, Kaduna, Kogi, Imo, and perhaps even Lagos and Kano, although these latter two states look stronger for the APC.
Atiku’s deep experience in election matters may outflank Buhari’s APC handlers, but he will need more than just his deep pockets to outbuy or check the APC machine. He will also need to demonstrate genuine public support, mobilised by a major ground operation backed by local PDP networks.
At 71, Atiku is more energetic and comfortable with speaking on the stump than the taciturn, 75-year-old Buhari. That will be important for reaching Nigeria’s social media-savvy voters, who threw their weight behind Buhari in 2015 but have grown frustrated with his slow pace. If the election does end up close, as appears likely, the APC’s control of the security forces may prove pivotal and provoke a crisis. If, however, Atiku does in fact win and the APC respects the result, as Jonathan did in 2015, Nigerians may at least come to feel that elections, however flawed, can lead to change.
And here’s a great report from USIP on the factors at play in Nigeria’s 2019 elections.
Lomé in Togo has become West Africa’s major port, surpassing Lagos. A key development backing Lomé was the commissioning of Lomé Container Terminal. It handles close to 890,000 TEU annually, close to 75 percent of Lomé’s total throughput of 1.2 million TEU. “The establishment of Lomé Container Terminal is part of a greater trend in West Africa, which sees more and more carriers becoming involved in ports and terminals. After all, carriers must go somewhere using their oversized ships,” says Wadey.
In 2017, 285 container ships sailed the seven intercontinental trade lanes to West Africa. Deployed by 24 different operators, their average capacity was 3,300 TEU. The biggest ship, a 13,600 TEU vessel, is operated by MSC in a hub and spoke service, connecting Lomé with a large number of regional ports by feeder.
Togo’s logistics play is an underrated phenomenon. Lome’s new airport is the hub of ASKY, a regional airline operated in conjunction with Ethiopian Airlines (which has a 40% stake in ASKY). Lome also functions as Ethiopia’s global hub in West Africa, with direct flights to the US and Latin America.
Togo, of course, is also led by a dictatorial dynasty which has dominated its political economy for over 50 years. Recent protests against President Faure Gnassingbé Eyadema’s autocratic rule have been met by brutal repression, resulting in dozens of deaths. Togo is the only country in the region that lacks presidential term limits.
kenopalo.com 