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Five reasons why Kenya and Africa should take off

Wolfgang Fengler's picture

A week hardly goes-by without one or more international investors announcingmajor investment interests in Nairobi, or other African capital cities.

Nokia, Nestle, and IBM are some of the companies which intend to position themselves more strongly in (East) Africa. True, their investments may still be low by international standards, but they are increasingly becoming noticeable. 

On a macroeconomic level, the new Africa momentum has also been evident. Africa has weathered both the global financial crisis, and the turbulence in the Euro zone. According to World Bank’s latest economic outlook, Sub-Saharan Africa is projected to grow above 5 percent in 2012 and 2013. This would be higher than the average of developing countries (excluding China), and substantially, above growth in high-income countries. This means that at some point in this decade, Africa could grow above the levels of Asia.  A few years ago, it would not have been possible for economic observers to consider such a scenario.  Once Africa becomes the fastest growing continent in the world; this will also be the true turning point for Africa’s global perception.

Big shifts and what they mean for Africa and Kenya

Wolfgang Fengler's picture

Can Africa claim the 21st century? When the World Bank’s Africa department published this book in April 2000, most observers were doubtful that African countries would ever be in a position to become emerging markets. That year, The Economist called Africa “The hopeless continent” and global attention was focused mainly on Africa’s problems: HIV/Aids in Southern Africa; the relentless war in Somalia; and, droughts in the Sahel—which gave the pessimists plenty of ammunition. 

But over the last several years, something remarkable has happened: Africa’s fragile and conflict-affected countries remain a major development challenge, but besides these, a Stable Africa has emerged. Most of this Stable Africa has experienced continued high growth for a decade, and major improvements in social indicators. Africa is becoming an investment destination, and there is hardly a week which goes by without a major investor dropping by my office, to discuss the region’s economic fundamentals.

How has Africa changed over the last decades?

Rewarding safe sex

Damien de Walque's picture

Prevention strategies have had limited impact on the trajectory of the HIV/AIDS epidemic. New, innovative approaches to behavioral change are needed to stem the epidemic.

In a joint effort with many colleagues, and in collaboration with the Ifakara Health Institute in Tanzania and, the University of California at Berkeley, we launched a study with the acronym RESPECT (“Rewarding STI Prevention and Control in Tanzania”).

We started with an observation:  Conditional cash transfers (CCTs) have been used successfully to promote activities that are beneficial to the participants such as school attendance  and health check-ups for children.  The Tanzanian experiment asks whether CCTs can be used to prevent people from engaging in activities that are harmful to themselves and others, such as unsafe sex. This is a controversial idea.

Africa is rising - is poverty falling?

Shanta Devarajan's picture

Several people, from The Economist to this blog, have been highlighting Africa's accelerated GDP growth of about 5 percent a year for the decade before the 2008-9 global economic crisis, and the two years since the crisis. But has this growth served to reduce poverty?

The latest globally consistent estimate of poverty rates has an answer: Yes. 

Using the measure of people living on $1.25 a day or less, the World Bank's poverty measurement team, led by my colleague Martin Ravallion, estimates that the percentage of poor Africans fell from 58 percent in 1999 to 47.5 percent in 2008.  This rate of decline of about one percentage point a year is a welcome change from the previous decade when growth was much slower and the poverty rate increased. 

Tanzania’s Steep Learning Curve

Stevan Lee's picture

Tanzania has shown massive achievements in education – well known progress in primary enrolment plus less well known, but in some ways even more spectacular, growth in post-primary education. 

Yet, Tanzania needs to improve learning outcomes if a virtuous cycle of growth and human capital investment is to be sustained. This is “The Steep Learning Curve” which Tanzania needs to get onto with modest fiscal resources but a rapidly growing number of new students, and therefore with a keen eye for value. This should be possible.

Professional Hazard: Migrant Miners Are More Likely to Be Infected with HIV

Damien de Walque's picture

Gold mine in Johannesburg, South AfricaSwaziland and Lesotho are among the countries with the highest HIV prevalence in the world.
Recent nationally representative estimates reveal an adult HIV prevalence equal to 26% in Swazilandand 23.2% in Lesotho2.

These countries have two other main features in common: they are small countries bordering South Africa and, during the past decades, they were exposed to massive recruitment efforts to work in South African mines. For more than a century, about 60 percent of those employed in the mining sector in the Republic of South Africa were migrant workers from Lesotho and Swaziland3.

In a recent paper4 with Lucia Corno, we started from this set of facts and investigated whether the massive percentage of migrant workers employed in the South Africa’s mining industry for a long period might be one of the main explanations for the high HIV prevalence observed in Swaziland and Lesotho.

Tanzania: Building bridges through education and small businesses

Jacques Morisset's picture

Attracted by the prospects of large unexploited natural gas reserves in the south of Tanzania, big players are in town. The British Gas Group has publicly announced that it may invest over US$35 billion in the next 25 years – 1.5 times Tanzania’s current GDP. Policymakers and donors are jockeying to position themselves and understand what is at stake.

The excitement is well founded but perhaps a little bit premature. According to the most optimistic projections, revenues from natural gas will not materialize for 5-7 years. Moreover, international experience shows that commodity-driven growth does not guarantee success. The Tanzanian authorities are therefore right to prepare for the future by setting up the fiscal and financial rules required for future transparent and rational use of these funds now. They should not forget also to focus on the coming 5-7 years because the economy is facing a number of challenges.

Who ends up being more accountable - governments or citizens?

Stuti Khemani's picture

In our (justifiable) enthusiasm for transparency, we rarely ask whether information provision leads private citizens to help themselves, thereby relieving governments of their responsibilities. If so, we may not be quite there (yet) in finding tools that improve government accountability.

Take the case of community radio, a classic tool for information sharing for accountability in Africa. It is supposed to organize communities and (literally) give voice to the opinions and needs of the marginalized. It also carries public interest messages, communicating the importance of health, education, and democratic values. New data from Benin, a country with a vibrant community radio network, show that people in poorer and far-flung regions are able to access news and information, and share views, because of this medium.

But these data yield some surprising results.

In villages with greater access to community radio, where people are more informed about the value of services, they are more likely to invest their own, private resources in health and education. More informed households are more likely to purchase bed nets from government officials, paying for this public health good to combat malaria, even though nets are supposed to be distributed free.

One million more out of poverty in Rwanda

Omowunmi Ladipo's picture

Over the last couple of years, as I travelled through the Rwandan countryside and talked with farmers, it was clear that something really interesting was happening.  This was confirmed on Tuesday, February 7th when the results of the 3rd Rwandan Household Living Conditions Survey, EICV 3 were released.  The results were, in the words of Paul Collier “deeply impressive” with Rwanda pulling off the very rarely

Creating a level playing field

Wolfgang Fengler's picture

Throughout the slums of this world, poor children are dreaming of becoming football stars and playing in the World Cup. Some of them from Kibera—Kenya’s largest slum—had a shot last weekend, when the International School of Kenya hosted the third “Mini World Cup”.

The event involved more than sixty teams made-up of Kenyan and international children from all walks of life. Two teams from Kibera made it to the top eight teams of the tournament, keeping their dream alive to win the “Cup” in one of the next years. The great thing about football is that all teams, no matter what their social background, have an equal opportunity to win. They start on a level playing field, and they all play by the same rules. When the final whistle blows, there is no reason why one of the teams from Kibera should not lift the Mini World Cup next time, just as Ghana’s Black Stars overcame Team USA in the 2010 World Cup, despite the huge disparity in wealth between the two nations.

In economic development, the equivalent of having a level playing field is equality of access to basic services.

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