The Investor's Shelf — one book
Emerging Africa

Emerging Africa

Steven Radelet
2010
T3 OL15587843Wgoodreads

Ghana as lead exhibit in the case for African growth turnarounds.

Summary

Radelet, an economist who has worked at the Center for Global Development and in the United States government, argued that a substantial group of African countries had achieved a genuine break from their earlier trajectory.

His empirical claim is specific. He identifies seventeen countries, excluding oil exporters, which from the mid-1990s achieved sustained growth in income per head, reductions in poverty, improvements in health and education indicators, and progress on governance measures. He is careful to separate these from the oil producers, whose growth reflects resource prices rather than any change in economic organisation, and from the countries that continued to stagnate.

He identifies five changes he considers causal. Democratic and accountable governance replaced the personalised authoritarian rule of the earlier period in most of these countries. Economic policy improved, with inflation controlled, exchange rates unified and trade opened. The debt burden was reduced through the heavily indebted poor countries initiative, which freed fiscal space. New technologies, particularly mobile telephony, permitted communication and financial services that had not existed. A new generation of leaders in government, business and civil society, educated differently and without the anti-colonial political formation of their predecessors, took positions.

He is explicit about what could reverse this, including commodity dependence, weak institutions and the fragility of the political changes.

The book was published in 2010 and its optimism has been partly tested. Several of the seventeen have sustained progress; several including Ethiopia and Mali have experienced conflict or authoritarian reversal; commodity price declines after 2014 exposed continued dependence; and debt has accumulated again. The identification of a genuine break in the mid-1990s and of the mechanisms behind it remains defensible; the assumption that it would continue was a forecast.

Key takeaways 7

  1. Seventeen non-oil African countries achieved sustained income growth and poverty reduction from the mid-1990s, which was a genuine break from the earlier trajectory.
  2. Oil exporters must be separated from this group, because their growth reflects resource prices rather than economic reorganisation.
  3. More accountable governance replaced personalised authoritarian rule in most of the countries that broke through.
  4. Debt relief through the heavily indebted poor countries initiative freed fiscal space that had been consumed by servicing.
  5. Mobile telephony permitted communication and financial services that fixed infrastructure had never delivered.
  6. A generation of leaders without the anti-colonial political formation of their predecessors took positions in government and business.
  7. Commodity dependence, weak institutions and political fragility could reverse the progress, and in several countries subsequently did.

Who should read it

Investors and operators considering African markets who want the case for differentiating between countries rather than treating the continent as one.

Where it sits in the reference 2

Countries
Philosophy

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