On January 22, 2012 at 6:00 am in the morning, Ethiopians living in the Efoyta Market neighborhood in Addis Ababa woke up to a burning five-story building. More than 13 hours later, the fire had killed two people, destroyed 65,000 square miles including several homes and businesses, and produced damages amounting to ETB 20 million ($1 million), a huge amount in a country where nearly 30% of the population live on less than $1.90 a day.
Following a long tradition of economists, the newly-elected government in Benin can gain inspiration from geography. For economist Jeffrey Sachs, university professor at New York’s Columbia University, many tropical countries have failed to grow because their hot climate facilitated the propagation of epidemic diseases. Economist Paul Collier, professor of economics and public policy in the Blavatnik School of Government at the University of Oxfod, has argued that Sub-Saharan Africa (SSA) is lagging because of its disproportionate number of people living far from the ocean and thus from global markets. Similarly, French historian Fernand Braudel’s work reminds us that many urban centers only became “true” drivers of growth when they were able to host processing industries, which are usually absent in Africa.
Travelling across Africa these days you are likely to run into increasing numbers of mining, oil, and gas industry personnel engaged in exploration, drilling, and extraction across the continent. Although commodity prices are moderating, the discoveries being made in Africa offer the real prospect of significant revenue to many cash-poor, aid-dependent governments in the decade ahead. If you care about development, the question is whether these revenues will catalyze broad economic development and whether they will benefit the poor in Africa.