Interesting Fact of the Month

On life expectancy on the Continent:

Malawi has led the way, with life expectancy at birth rising 42 per cent from 44.1 years in 2000 to 62.7 in 2014, according to data from the World Bank.

Zambia and Zimbabwe have both seen rises of 38 per cent over the same period, with longevity in Rwanda, Botswana and Sierra Leone up more than 30 per cent.

Uganda, Ethiopia, the Republic of Congo, Niger and Kenya have all witnessed rises of more than 20 per cent. Overall, of the 37 countries to have seen life expectancy rise by more than 10 per cent since 2000, 30 are in sub-Saharan Africa, including the 15 with the biggest gains, as the table below shows.

Not one sub-Saharan country saw life expectancy fall between 2000 and 2014.

Public health for the win.

The full FT piece is here.

Why is Barclays exiting its Africa business?

The FT reports:

Firstly, he said it would create “a very simple, clear vision for Barclays” as a bank focused on its two core markets of the UK and US.

Secondly, he explained that Barclays was “structurally challenged” as the majority owner of the African operation. It has all the downsides of owning 100 per cent of the business, but benefits from less than two-thirds of its profits.

……. The African operation produced an attractive 17 per cent return on equity last year in local currency, but this fell to 8.7 per cent at group level, below its 10 per cent target.

In addition, the Wall Street Journal reports that the bank is selling its Asian wealth management fund in order to focus exclusively on the US and UK markets.

According to the Journal:

Cutting the African division “was a very difficult decision,” Mr. Staley said. A U.K. tax on bank balance sheets and the regulatory costs that come with holding the unit outweighed the benefits of keeping it, he added. It is unclear when Barclays will start to sell out of the business.

In short, this data point does not reveal any new information on the state of the African economies in which Barclays is a major player.

Powering Africa Into the Next Decade

The African Development Bank has made power generation its top priority (see list of power projects here). The US-led initiative, Power Africa, is focusing capital on some very big and interesting projects. I’m not sure if the AfDB was the instigator of the new trend (even before President Adesina), but several serious African governments have recently prioritized power generation (looking at you, Pretoria). Here’s a sample:

A 450MW gas-fired power plant near Nigeria’s Benin City. In 2014 Nigeria flared more than 290b standard cubic feet of gas.

Twenty international banks and equity funders have committed $900m to the Azura-Edo Independent Power Project, a 450MW gas-fired open-cycle power plant to be built in the country’s Edo State.

A joint venture of Siemens and Julius Berger Nigeria will start building the plant, which is expected to start generating in 2018.

Considered a model for future plants in terms of its private financing, the plant will also burn Nigeria’s natural gas, of which many billions of cubic feet are now routinely flared off as waste.

Zambia and Zimbabwe are in an advanced stage of making the 2400MW Batoka Gorge dam and power station a reality.

Construction of the Batoka Gorge hydroelectric power station to be located on the Zambezi River approximately 54km downstream of Victoria Falls is projected to commence early next year.

….That is why I am saying that we are closer to the fulfillment of the dream for the construction of the dam. Once construction starts it will take five years and we expect it to be completed by 2023.

Nambia set to build its biggest gas-fired power plant since independence.

The $450m plant to be located in Walvis Bay, is set to generate about 250 megawatts, 50 per cent of what the country currently generates internally (500 megawatts)

And lastly, Ethiopia’s mega dam and power plant will generate about 6,000MW:

When Ethiopia completes construction of the [Grand Renaissance] dam in 2017, it will stand 170 metres tall (550 feet) and 1.8km (1.1 miles) wide. Its reservoir will be able to hold more than the volume of the entire Blue Nile, the tributary on which it sits (see map). And it will produce 6,000 megawatts of electricity, more than double Ethiopia’s current measly output, which leaves three out of four people in the dark.

 

Some Africanist inside baseball

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More on the politics of land redistribution in South Africa (Guest Post)

Ongoing student protests in South Africa over university fees are a reminder of the political risks facing South Africa in light of its levels of income inequality and general economic hardship. Last month I wrote on inequality and its likely political consequences in South Africa.

Friend of the blog and Harvard-trained historian Matthew Kustenbauder read the post and wrote this thoughtful response. I am posting it with his permission.

I agree with you, Ken, that the implementation of Mugabe’s land reform in Zimbabwe was a disaster.  I also agree that South Africa must reorganise its political economy or risk stability and the dividends that come with it.  It is the latter observation – that stability brings dividends – that gives me pause, however, when you suggest that the same situation of land inequality holds true in South Africa.  Despite recent comments by rockstar economist Thomas Piketty at this year’s Mandela Lecture, land and land redistribution is not the central issue upon which South Africa’s economic future hinges.  In the South African political context (about which Piketty knows little), the land question is a stalking horse.

First of all, farmers in South Africa ­ just like those in Zimbabwe today
get little support from their current governments (unlike the old
Rhodesian and Afrikaner governments, or the governments of the EU, which highly subsidise farmers) and are generally not members of the country’s super-wealthy elite.

Second, the only thing standing in the way of constitutional (emphasis
needed here, because the limits of land rights and conditions under which land reform is to take place in ZA is enshrined in the constitution) land reform progress in South Africa is the ANC.  The ruling party has refused to complete a land audit for years, while simultaneously entrenching the power of traditional authorities who hold sway over great swaths of land.

The largest landholder in KwaZulu-Natal, for instance, is the Zulu King, Goodwill Zwelithini.  As far as land rights and restitution go, the single greatest thing the ANC could do would be to grant legal title deeds to all those people living on “tribal lands” so that they can break free from feudalism and the shadow economy.  For instance, some of the students presently protesting the high cost of university fees that put tertiary education out of their reach could, if their parents had collateral such as a land title, obtain a loan that would allow them to get an education and skills they need to get a better paying job.

Third, when all of this business about percentages of land owned by whites 
in South Africa at the end of 1994 and today is quoted, it deceptively 
excludes vast tracts of land owned by tribal chiefs and kings because this is technically considered government land.  Again, there is a fundamental problem that the ANC has never addressed – land ownership and type has not been audited, even to this day.  The political opposition has repeatedly asked for a land audit to be completed, and they are ignored.

Why? 

As Jonny Steinberg recently observed: “The current government is twisting communal tenure into new forms, creating large blocs of ethnic power, giving rural aristocrats scandalous control over the distribution of land. This is a barely modified version of what Mahmood Mamdani described, a degradation of the citizenship of rural people.

Which brings me to the stalking horse bit.  Land reform is a useful
political tool, because, in addition to locking up rural votes for the ANC
just when its urban vote share is haemorrhaging,  it also serves to mask
the ANC¹s failure to address the country¹s real economic problems by
pleading to historical grievance and identity politics.  First, it is a
stick with which the black intelligentsia and political ruling class can
beat Œprivileged whites¹.  Second, it is an issue that stirs up strong
feelings among black voters and distracts from the real question people
should be asking in a democratic capitalist economy: Why hasn¹t the ANC produced more jobs and cleaned up crime and corruption?  Third, it takes the spotlight off the mining companies and other monopoly industry in ZA that enjoy far too much protection from government already, employ more workers for better pay than the agriculture sector, and contribute a far greater percentage of national domestic product than agriculture does.

A final point, one informed by an academic who, unlike Picketty, is doing real research in South Africa.  A colleague of mine is writing her
dissertation on land issues, labor disputes, etc. on farms in KZN, which
has one of the highest rates of farm murders among the provinces.  After extensive interviews and field research, she has found that, almost
without fail, when black farmworkers are offered either land or cash as
compensation for land claims filings, they take the cash ­ they simply
don’t want to farm.  So this land obsession is really more of a
psychological and opportunistic symbolic issue for the ruling bourgeoisie than a real concern of the working poor.  What people really need are decent-paying jobs, and flushing land rights down the toilet in the name of settling historical grievances or scoring political points against the opposition during election season will only leave South Africans poorer and hungrier in the end.

Incidentally, following Piketty’s call for land redistribution in South Africa Michael Albertus wrote a piece in the WaPo on why the ANC is unlikely to redistribute land.

Mbembe on the State of South African Politics

Rainbowism and its most important articles of faith – truth, reconciliation and forgiveness – is fading. Reduced to a totemic commodity figure mostly destined to assuage whites’ fears, Nelson Mandela himself is on trial. Some of the key pillars of the 1994 dispensation  – a constitutional democracy, a market society, non-racialism – are also under scrutiny. They are now perceived as disabling devices with no animating potency, at least in the eyes of those who are determined to no longer wait. We are past the time of promises. Now is the time to settle accounts.

But how do we make sure that one noise machine is not simply replacing another?

That is Wits professor Achille Mbembe writing on the state of politics in South Africa. The whole piece is definitely worth reading (also liked this response from T. O. Molefe).

Economic elites in South Africa (both black and white) are playing with fire. The lessons of Zimbabwe were not learned. The implementation of Mugabe’s land reform project was a disaster, but there is no question that the levels of land inequality in Zimbabwe were simply politically untenable. Something had to give.

One need not be against everything neoliberal (whatever that means) to acknowledge that the same situation holds in South Africa, and that something will have to give. Consider Bernadette Atuahene’s observations on the land situation in South Africa:

When Nelson Mandela took power in South Africa in 1994, 87 percent of the country’s land was owned by whites, even though they represented less than ten percent of the population. Advised by the World Bank, the ruling African National Congress (ANC) aimed to redistribute 30 percent of the land from whites to blacks in the first five years of the new democracy. By 2010 — 16 years later — only eight percent had been reallocated.

In failing to redistribute this land, the ANC has undermined a crucial aspect of the negotiated settlement to end apartheid, otherwise known as the liberation bargain. According to Section 25 of the new South African constitution, promulgated in 1994, existing property owners (who were primarily white) would receive valid legal title to property acquired under prior regimes, despite the potentially dubious circumstances of its acquisition. In exchange, blacks (in South Africa, considered to include people of mixed racial descent and Indians) were promised land reform.

Rapid economic growth and mass job creation could have masked the structural inequalities that exist in South Africa. Instead the country got Jacob Zuma and a super wealthy deputy president (and BEE beneficiary), both of whom are singularly out of touch with the vast majority of South Africans.

There is no doubt that South Africa needs a complete reorganization of its political economy. The question is whether the process will be managed by a “moderate” outfit like the ANC; or whether leaders will continue to sit on their hands and allow voices of less moderate groups like the Economic Freedom Fighters to gain traction.

ps: Just in case it is not obvious, South Africans are unambiguously better off now — as a people — than they were under apartheid rule.

The politics of unemployment numbers

I just discovered the website Africa Check. It’s a fantastic resource dedicated to “sorting fact from fiction.” Three posts caught my eye, on unemployment numbers in Nigeria, Zimbabwe, and South Africa.

In Zimbabwe:

Zimbabwe’s unemployment rate is 4%, 60%, or 95% depending on who you ask. The ruling ZANU-PF, in a campaign manifesto, admitted that the rate was 60%! You know things are really bad when a ruling party (in an election year!) says that this big a proportion of the working-age population is unemployed. The World Bank apparently claims that the rate is closer to 5.4%.

In Nigeria:

The state stats agency controversially claimed that the unemployment rate is only 7.5% (for the last quarter of Goodluck Jonathan’s presidency). Tolu Ogunlesi then offered this explainer on how the government arrived at the number. The numbers suggest that the actual figure varies from 7.5 to 24.2 depending on the choice of cut-off for what it means to be employed. 

And in South Africa:

ANC claims that the unemployment rate at the end of 2013 was 21.9% but skeptics insist that the actual figure closer to 24.1%. 

Summer Reading List

For only the second time in the last 10 years I am spending the whole summer in North America (and terribly missing the Jamuhuri). Which means I’ll have a little bit of time for some reading beyond my immediate research work. Here are some books that I have started reading since the beginning of the year or plan to read this summer. I’ll write reviews on a few of them over the next two months.

Fiction: 

We Need New Names – NoViolet Bulawayo

Waiting for the Wild Beasts to Vote – Ahmadou Kourouma

Nervous Conditions – Tsitsi Dangaremba (I am deeply embarrassed to say I’ve never finished reading this classic)

Stoner – John Williams

Political Economy:

The Settler Economies (Kenya and Zimabwe, 1900-63) – Paul Mosley

Medieval Africa, 1250-1800 – Roland Oliver and Anthony Atmore

Democracy in Africa – Nic Cheeseman

Ethnic Patriotism and the East African Revival – Derek R. Peterson

Economic Crises and the Breakdown of Authoritarian Regimes – Thomas B. Pepinsky (If you are a Comparativist, read Pepinsky often)

The Mind of the African Strongman – Herman J. Cohen

Political Order and Political Decay – Francis Fukuyama (Volume I was epic. Very few people do the big picture stuff the way Fukuyama does)

Bonus (time permitting):

The Firm – Duff McDonald (It’s crazy how many of my close friends work for McKinsey or are alums of the firm)

Between the World and Me – Ta-Nehisi Coates

The Philosophical Breakfast Club – Laura J. Snyder

Stanford Africa MBA Fellowship

The deadline is June 8th, 2015.

Stanford Graduate School of Business is excited to offer the Stanford Africa MBA Fellowship for the 2015-2016 application cycle. The Fellowship supports up to eight promising African students with financial need in obtaining an MBA at Stanford each year.

The Stanford Africa MBA Fellowship will provide financial support for tuition and associated fees for the two-year MBA Program (approximately $140,000). Within two years of graduating from the MBA Program, Stanford Africa MBA Fellows must return to Africa for at least two years of employment. This is an important aspect of the Fellowship because it assures that recipients will leverage their new skills to make an impact on the ground in Africa.

You can apply here.