Trade, not aid, is the best way to sustain the continent's increasing
prosperity
Ian Birrell
Sunday February 20 2011
The Observer
http://www.guardian.co.uk/commentisfree/2011/feb/20/trade-not-aid-support-africa
Eleni Gabre-Madhin rings the bell and another day of frenetic dealing
starts at the Ethiopia Commodity Exchange. As she walks back to her
office past screens filled with flickering prices, traders in green
and brown jackets start bargaining over prices of some of the world's
finest coffee beans. The hubbub grows as they haggle, high fives
denoting another deal. Each one is another small step in lifting the
threat of starvation from the country.
The former World Bank economist set up the exchange in Addis Ababa
after realising that even at the height of the 1984 famine, when
1million people died in the north of the country, there were food
surpluses in the south. Her ambition was to transform food security in
Ethiopia, enabling farmers to reach new markets and obtain better
prices. Today, the place is buzzing as traders deal in sesame, pea
beans and maize, along with those prized coffee beans. It has been
open for 1,000 days, during which time it has traded an astonishing
$1bn worth of goods ? and with zero default.
Gabre-Madhin admits that when she told colleagues in Washington of her
plans to establish a modern exchange from scratch in Africa they
laughed out loud. "But we have done it and we are helping change the
image of this country," she said. "I could smell the change in the air
and I wanted to be part of it. And all across the continent, there are
similar things happening, despite the terrible bureaucracy and
infrastructure."
She is right to be so optimistic. Think of Africa and for too many
people it conjures up images of hunger, poverty, disease and conflict.
These are the four horsemen of the supposed African apocalypse.
Journalists seeking stories look for death, decay and destruction
while charities seeking donations reinforce the stereotypes with
pictures of malnourished children and dying adults. Often, they work
and travel together, reporters rarely subjecting charities to the
level of scrutiny applied to other vital institutions.
But these images fail to reflect an accurate picture of a fast-
changing continent. People such as Gabre-Madhin, the traders on the
floor and the farmers growing those goods and using modern methods of
communication to get the best prices are the real face of Ethiopia
today, a country that more than any demonstrates the gulf between the
West's perception and the reality of modern Africa.
Indeed, while we have been captivated by the astonishing events over
recent weeks in the north, we have overlooked another, slower-burning
revolution taking place across the rest of Africa. It is one largely
driven from the ground up and turning the continent into a place
brimming with good news. We ignore it at our peril.
There are still deep problems, with monstrous dictators, rampant
corruption, wretched inequality and grinding poverty for millions. The
election in Uganda on Friday underlines the difficulties of reform,
with an authoritarian leader using the power and patronage of the
state to remain in charge after 25 years despite once recognising that
Africa's problems are caused "by leaders who overstay".
But for all this, the twin motors of capitalism and consumerism are
driving profound changes for the better, especially when allied with
technological advances, good governance and rapid urbanisation. People
are living longer. Their lives are more prosperous and more peaceful.
And many of the continent's 56 countries are roaring ahead with such
vigour that a pack of African lions may soon be snapping at the heels
of the Asian tiger economies.
After China and India, the continent is being seen as the next
emerging billion-person powerhouse. Investors are scrambling to put
their money into Africa, lured not just by the mineral wealth and
uncultivated arable land, but by an astonishingly young population ?
nearly two-thirds of the people living there are under the age of 24 ?
which is increasingly educated and has money to spend on consumer
products. There are already more mobile phone subscribers in Africa
than in Canada and the US combined, proving that even those on the
breadline have spending power.
The Economist revealed last month that six of the 10 most rapidly
expanding economies over the past decade were in sub-Saharan Africa.
Heading the list was Angola, transformed by the oil boom from a
wartorn wreck into the world's fastest-growing nation. The others were
Ethiopia, Nigeria, Chad, Mozambique and Rwanda. And it is not just
down to the commodity boom ? retailing, manufacturing and
telecommunications also played their part, along with tourism.
Indeed, thanks partly to the World Cup in South Africa, this was the
only region of the world that saw a growth in tourism last year.
This is just the start. Already, Africa's collective gross domestic
product is bigger than Brazil's and the continent's households spend
more than those in India. Over the next five years, the average
African economy is expected to outpace its Asian counterpart.
By the end of this decade, there are expected to be at least 17
cities, among them Dakar in Senegal, Rabat in Morocco and Kano in
Nigeria, with consumer markets worth more than $10bn each. Looking
further ahead, the Standard Chartered bank predicts that the
continent's economy will grow at an average annual rate of 7% over the
next two decades ? faster even than China's.
China has led the way into Africa over the past 10 years. Although
many argue it is just ripping out raw materials to fuel its own
growth, it has improved infrastructure and put massive sums of money
into the continent. It was rapidly followed by its Asian rivals, which
is why Hyundai cars will soon be rolling off a new plant in Mali. And
now the American corporate behemoths such as Coca-Cola, Walmart and
Yum! - the owners of KFC - are spending billions to catch up.
This is a phenomenal turnaround. For much of the late 20th century,
Africa was in a sorry state ? pockmarked by war, plundered by
dictators and plagued by poverty. For two decades, nearly all the
countries in sub-Saharan Africa recorded zero or even negative
economic growth per capita as they struggled with their colonial
legacy, suffered apartheid and became a proxy battleground for the
cold war. Promising businesses were ruined, investment dried up and
unemployment soared. In 1989, when the Berlin wall fell, there were
just three democracies in Africa.
But as the last century ended, Africa shook off the shackles of the
past and began to stir. As the impressive Liberian president Ellen
Johnson Sirleaf likes to say, there are no poor countries, just rich
countries that are poorly managed. And it would have been hard to
manage countries worse than most of the leaders then in charge. But as
democracy spread ? today there are 23, albeit of widely varying
quality ? countries became better governed and conflict declined. The
numbers killed in battle, for example, fell sevenfold in the first
eight years of this century, while the number of successful coups fell
more than threefold in two decades.
This process continues. There has been extensive coverage of the
alarming standoff between two rival election candidates in Ivory
Coast. But in neighbouring Guinea, ruled by a series of brutal and
rapacious dictators since gaining independence in 1958, a massacre of
demonstrators led to a bizarre series of events that culminated in the
first democratically elected government being sworn in a few weeks
ago. And we have just seen the referendum over the division of Sudan
pass off peacefully despite widespread predictions of violence and
chaos.
There is still a long way to go. Repression remains rife, corruption
endemic, infrastructure woeful, bureaucracy stifling. But one result
is that people respond with immense ingenuity and world-beating
innovations emerge.
Two examples are M-Pesa, a Kenyan system for transferring money by
text that is attracting global attention, and mPedigree, a Ghanaian
service to determine whether a medicine is counterfeit from its bar
code, sent to a central number by text. There are dozens more.
"Things are moving so fast there," says Vijay Mahajan, a business
professor at Texas University and author of Africa Rising. "After all,
God did not put all the entrepreneurs in China and India."
Europe remains Africa's biggest trading partner with strong historic
and cultural links. But too many people in Britain retain a myopic
vision of Africa, blinkered by the past and influenced by the
corrosive legacy of Live8 in 2005.
If we really want to help, we can lift trade restrictions, support
those fighting for civil society and ignore the current squeals over
new anti-bribery legislation. But we should focus relentlessly on
trade and not on aid. Africa does not need "saving" by outsiders: it
is finding its own solutions to its own problems with impressive
speed.
guardian.co.uk Copyright (c) Guardian News and Media Limited. 2011
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