In 2018 Abel Kinyondo, Zim Nwokora and I co-authored a paper entitled ‘Development in Africa’ which was eventually published by World Affairs. In the article we claimed that the development progress that countries in Sub-Saharan Africa had experienced was the result of several factors: the commodity bonanza, trade with China, the improvements in the quality of government, the inflow of aid money and foreign direct investments, the fact that Africa’s massive debt had been condoned and that the health situation in the continent had somehow improved.
We also noted that if some or all of these success factors had been compromised, the ability of countries in Sub-Saharan Africa to make further progress along the developmental path could be greatly compromised.
We are now in the position of presenting some data and of having a clearer idea of where Sub-Saharan Africa may be going.
While the data on the net inflow of foreign direct investments for 2019 have not yet been made available, the World Bank development indicators database provides plenty of information as to what happened in the previous years. In 2014 the net inflow of foreign direct investments (in current US $) amounted to 1.838 trillions, a year later it increased to 2.394 trillions, in 2016 FDIs peaked at 2.48 trillions, they decreased then to 2.085 trillions in 2017 and they dropped to 1.072 trillions in 2018.
The amount of FDIs in 2018 is 41.6 per cent lower than what it had been in 2014, it is 55.2 per lower than what it had been in 2015, it is 56.7 per cent lower than what it had been in 2016, and it is 48.5 per cent lower than it was in 2017. In so far as FDIs are a major driver of economic growth and a major determinant of socio-economic development the dramatic decrease in the level of FDIs cannot possible bode well for Sub-Saharan Africa.
With regard to the quality of government, while some countries (Botswana, Cape Verde, Rwanda, Seychelles) have made some progress in reducing corruption, there are several countries (Kenya, Mauritania, Mozambique, DRC, Chad, Congo, Burundi, Equatorial Guinea, Guinea Bissau) in which the level of corruption has increased and the rising corruption has gone hand in hand with a deterioration of democracy. https://www.africanpoliticsandpolicy.com/?p=20599
With regard to public health, the situation has also changed for the worse. On November 8, 2017 there were 43 outbreaks, on December 14 2018 there were 48 outbreaks, by April 21, 2019 there were 53 outbreaks, and by July 16, 2019 there were 59 outbreaks–including a devastating Ebola outbreak in DRC. Before this rapid increase in the number of outbreaks, WHO had estimated that the cost of diseases for Africa amounted to 2.4 trillion US dollars (See: https://allafrica.com/stories/201903280106.html). As the number of outbreaks continues to rise, the cost of diseases must also be rising accordingly–and such rising costs cannot possibly be good for the African economies.
Finally, public accounts are also rapidly deteriorating. Public debt, that had in the past prevented African economies from experiencing proper growth and from yielding developmental dividends, is once again on the rise. In spite of the fact that African economies have experienced nearly 15 years of sustained strong growth – see our article in World Affairs- the public debt has managed to increase even faster than the local economies. As a result a public debt that stood at 29.1 per cent of the GDP in 2013, it amounted to 45 per cent of the GDP by 2017. See: https://allafrica.com/stories/201907300058.html
Rising corruption and a skyrocketing public debt coupled with a deterioration of democratic governance and public health represent a dangerous cocktail for Sub-Saharan Africa. Failure to address these issues may compromise the developmental progress that Africa had been able to achieve in the recent past and Africa could soon be heading towards yet another crisis.
Writing about the African crisis, Arrighi once noted that some observers described the African crisis as a ‘tragedy’. For me, what is tragic is not the fact that some economies in the continent are lagging behind. After a, when you lag behind, you can always make an effort to catch up. What is truly tragic is that the continent seems unable to capitalize on its successes and as long as it fails to do so, it will never be able to get where it has the potential to be.