African tourists emerge as powerhouse for tourism on the continent, says UNCTAD report

Four out of 10 international tourists in Africa come from the continent itself, according to the new UNCTAD Economic Development in Africa Report 2017: Tourism for Transformative and Inclusive Growth.

Pic Credit: Travel Noire

In sub-Saharan Africa, this number increases to two out of every three tourists whose travels originate on the continent. Data backing this key finding show that, contrary to perception, Africans themselves are increasingly driving tourism demand in Africa.

Tourism in Africa is a flourishing industry that supports more than 21 million jobs, or 1 in 14 jobs, on the continent. Over the last two decades, Africa has recorded robust growth, with international tourist arrivals and tourism revenues growing at 6 per cent and 9 per cent, respectively, each year between 1995 and 2014.

Focusing on tourism for transformative and inclusive growth, this year’s report encourages African countries to harness the dynamism of the tourism sector.

By collecting and comparing data from two different periods, 1995-1998 and 2011-2014, the report reveals that international tourist arrivals to Africa increased from 24 million to 56 million. Tourism export revenues more than tripled, increasing from $14 billion to approximately $47 billion. As a result, tourism now contributes about 8.5 per cent to the continent’s gross domestic product (GDP).

The First Ten-Year Implementation Plan of the African Union’s Agenda 2063 aims at doubling the contribution of tourism to the continent’s GDP. To meet this target, tourism needs to grow at a faster and stronger pace.

“Tourism is a dynamic sector with phenomenal potential in Africa. Properly managed, it can contribute immensely to diversification and inclusion for vulnerable communities,” said Mukhisa Kituyi, the Secretary-General of UNCTAD.

To realize the potential of intraregional tourism for the continent’s economic growth, African Governments should take steps to liberalize air transport, promote the free movement of persons, ensure currency convertibility and, crucially, recognize the value of African tourism and plan for it. These strategic measures can have relatively fast and tangible impacts. In Rwanda, the abolition of visa requirements for fellow members of the East African Community in 2011 helped increase intraregional tourists from 283,000 in 2010, to 478,000 in 2013.

Another important theme highlighted in the report is the mutually beneficial relationship between peace and tourism. Peace is of course fundamental for tourism. The mere appearance of instability in a region can deter tourists, leading to devastating, long-lasting economic consequences. However, the perception of danger does not always correspond with reality.

The 2014 Ebola outbreak in Western Africa had a very high cost in terms of tourism numbers and revenue lost across the entire continent. Despite being limited to relatively few countries in the western part of the continent, tourist arrivals and bookings fell in countries as far from the outbreak as South Africa and the United Republic of Tanzania.

The report notes that the economic impacts of political instability can be quite significant and long-lasting. For example, following political instability in Tunisia, total tourism receipts in 2009-2011 declined by 27 per cent on average, from $3.5 billion in 2009 to $2.5 billion in 2011.

Addressing safety and security concerns and swift responses to crises by African Governments and regional institutions are paramount to the growth of tourism in Africa. Promoting strategies aimed at improving Africa’s image in the global media are also critical in ensuring the sector’s recovery after conflict or political unrest.

During the next decade, tourism’s continued growth is expected to generate an additional 11.7 million jobs in Africa. Furthermore, where tourism thrives, women thrive. In Africa, more than 30 per cent of tourism businesses are run by women; and 36 per cent of its tourism ministers are women, which is the highest share in the world.

Pic Credit: UN Multimedia

Creating firm links between tourism, the agriculture and infrastructure sectors, ecotourism and the medical and cultural tourism market segments can foster diversification into higher value activities and distribute incomes more broadly. To unlock this potential, African Governments should adopt measures that support local sourcing, encourage local entities’ participation in the tourism value chain and boost infrastructure development. This continued investment into the tourism sector in Africa could lift millions out of poverty, while also contributing to peace and security in the region.

See full article here

See UNCTAD report here

Source: TRALAC

Art and its role in telling personal, family and collective histories

Serge Attukwei Clottey and GoLokal, My Mother’s Wardrobe, performance at Gallery 1957, 6 March 2016, courtesy the artist and Gallery 1957, photo by Nii Odzenma

On March 6 2016 as Ghana marked 59 years of independence, Gallery 1957, a new gallery with a curatorial focus on contemporary Ghanaian art by the country’s most significant artists celebrated its inaugural exhibition. With over 400 people in attendance, My Mother’s Wardrobe, a new creative work by Serge Attukwei Clottey captured a diverse and equally enchanted audience.

Founded by Marwan Zakhem, the gallery has evolved from over 15 years of private collecting and offers an ideal location for both local audiences and international visitors to discover new artists, and to gain a deeper understanding of the breadth of their practice through curated exhibitions. With an initial curatorial focus on contemporary Ghanaian art, the gallery will present a programme of exhibitions, installations and performances by the region’s most significant artists under the creative direction of Nana Oforiatta Ayim. The artist, Serge Attukwei Clottey, is the founder of Ghana’s GoLokal performance collective and the creator of Afrogallonism, an artistic concept commenting on consumption within modern Africa through the utilisation of yellow gallon containers.

Based in Accra and working internationally, Clottey’s powerful testimony to his mother in the aftermath of her death explores narratives of personal, family and collective histories. In continuation of the artist’s established use of assemblage, he considers the value of material as a tangible experience of loss. His works examine the powerful agency of everyday objects, with particular focus on the significance of personal clothing.

Serge Attukwei Clottey and GoLokal, My Mother’s Wardrobe, performance at Gallery 1957, 6 March 2016, courtesy the artist and Gallery 1957 Photo Credit: Nii Odzenma

I recently interviewed Nana Oforiatta Ayim, founder of ANO, and Creative Director of Gallery 1957 to gain a better understanding of Clottey’s work, Gallery 1957, the creatives industry and intrinsically the role of art in exploring and reconciling Ghana’s past and present.

Tell us about yourself

I write, make films, and work as a cultural historian, which involves uncovering or creating new narratives, particularly of what is now known of Ghana, and the regions that surround it. I live in Accra, Ghana, where I founded and run the cultural organisation ANO, and where I am the Creative Director of a new art space, Gallery 1957.

Tell us about ANO, (what does it stand for) how did it come about and what inspired its inception?

The name ANO is an aberration of the Akan word εno, which means grandmother. In Akan mythology, an old woman or grandmother is the ancestress of humankind. And even though, at traditional occasions, at festivals and funerals, it is often the men that play the role of elders, it is the old woman they go out to spiritually consult. I liked this notion of the origin of beings being female, of this alternative history to the dominant one in our largely Christian country, which is of the first human being a man. ANO is largely about the uncovering and re-writing and -formulating of alternative, more covert histories to challenge dominant, sometimes reductive ones. –

It is also a suffix in the language Esperanto, which I love for its ideal of a common language, one that would transcend national divisions, and that means belonging. In a global narrative, which has for so long been dominated by one side, and in which our cultural offerings, our philosophies and ways of being, were to some extent denigrated, I very much liked this ethos of belonging, of us all sitting at the same table, as equals, with all right to be there, no one sitting higher or lower than the other, most especially in a world that still differentiates on a spectrum from first to so-called third world countries.

The third meaning for it is as a short form of A.N. Other, a pseudonym for the unknown or anonymous. I remember going to museums in Europe when I was younger, and often seeing very sparse plaques alongside sculptures or masks, giving very little context or meaning to why they were there, where they were taken from, who created them, and from within what greater narrative they came. There was a sense that these objects like so much else that came from the continent of Africa were raw material, objects of inspiration for ‘greater’ artists with greater understanding, consciousness and agency. And so ANO is also about retelling histories on their own terms or at least attempting to, and in this way giving them more rounded truths.

Has ANO changed since its inception? If so, which significant changes have happened?

I first started working with the notion of ANO as a mobile platform in 2002 curating exhibitions at the Liverpool Biennial, organising events at the Royal Festival Hall in London, making films etc. The most significant change has been ANO’s settling into a physical space in Accra, and also expanding into more large-scale encompassing projects, like the Cultural Encyclopaedia.

Serge Attukwei Clottey, Love and Connections, 2016, Plastics, wire and oil Paint, 95 x 89 inches, ©the artist, courtesy Gallery 1957, Accra
How do you choose the artists who receive residency such as in the case of Serge Clottey?

It all happens quite organically. ANO is not a static institution with fixed paradigms and goals. It has been very porous and open, listening to and seeing what works, what synergies there are with other creatives, and then acting upon them. The residency programme emerged from shared interests and the notion that mutual collaboration could be of benefit.

What gap if any do you see in the art and creative works industry in Ghana?

I feel that whatever gaps there are are being addressed by people’s ingenuity. New institutions are springing up, like Gallery 1957 and the Archiafrika Gallery of Design and Architecture. The government is putting some funding into the arts, even if it could do a lot better. Institutions, like the National Theatre are starting to engage with young artists, like Ibrahim Mahama and Serge Attukwei Clottey, and of course artists keep pushing at their own boundaries. I think it is a very good time creatively in Ghana, and I’m excited to see what emerges over the next few years.

What role do you see art playing in creating a platform for reconciling socio-cultural, economic and political discourse beyond ANO?

I think art provides another way of seeing, of thinking, of understanding. I think it highlights things that might be obvious to everyone around, but that are not being addressed, as well as things that might not be obvious at all. I think that the more attention is paid to it, the deeper our engagement with our environment will be, as well as that with our own selves, and that in itself is the strongest foundation for any discourse or development.

You have been quoted as saying the following profound words on reconciling art and loss with regards to Clottey’s work:

“According to custom in many parts of Ghana, a person’s wardrobe is locked up for a year after their death then released to relatives, often leaving the person’s offspring with little or nothing of the material memory of that person. Textiles and materials in Ghana, and other parts of West Africa — each weft, line or mark — are potent carriers of memory, of communication, and the artist weaves into his sculptures subtle traces of loss, remembering, and of rebirth.”

In your view, does Clottey’s artistic work resonate with most Ghanaians?

I am going to do a series of talks at Gallery 1957 around his works for schools and universities and workers, and I’m very excited about the exchanges that will happen as a result of that. I think Serge’s work is deeply embedded in Ga cosmogony and offers an aesthetic and provocative way of looking at our past and recreating our future, and it is always a spectacle, which in itself excites people’s attention. The challenge now is to get the work and the discourses around it seen by more people than those naturally drawn to art, and I hope to do that with a series of films around Serge and other artists, their work and the deeper themes.

Serge Attukwei Clottey and GoLokal, My Mother’s Wardrobe, performance at Gallery 1957, 6 March 2016, courtesy the artist and Gallery 1957, photo by Nii Odzenma
My Mother’s Wardrobe is a result of Clottey’s residency with ANO, whose remit is to uncover hidden and alternative, personal and collective histories, which make up what is now known as Ghana. Can you tell us about other projects you are working on and what to expect in 2016?

There will be a lot of projects in 2016! Another collaboration with Serge on the Korle Lagoon around the themes of nature and its invasion and the mythologies around this within Ga philosophy, as well as a book and film on his work. A collaboration with Zohra Opoku for Gallery 1957, as well as a book and film on her produced by ANO. And an exhibition with Serge, Zohra, and Ibrahim Mahama at the end of the year at LACMA in Los Angeles, for ANO’s Cultural Encyclopaedia project. There will also be a preliminary tour of the country with what I call Living History Hubs, mobile museums, to gather and exhibit material cultural and upload it onto the Cultural Encyclopaedia site. And finally, an exhibition at Gallery 1957 with young artist and performer, Elisabeth Efua Sutherland which resonates deeply with ANO’s remit, as its subject is the role of the feminine in myth-making.

What advice would you give to upcoming artists in Ghana?

To listen deeply to whatever it is that resonates with them the most and to follow that impulse. To look around and see what inspires and challenges them in their environment, as well as outside of it. And to keep working at it, despite all the obstacles, and even without initial support; to create and express even if it is on their street corners or in their family compounds or in a market place, and to keep delving. I feel like it is consistency and integrity of purpose, as well as clarity of expression that draws support, in whatever form, to itself.

Lastly, why is this exhibition a must see for all?

The exhibition is a must see, because Serge is a very talented artist at the full potency of his creative expression. He is experimenting with form and he is delving into the various layers of his environment and bringing them forth in ways that are unexpected and that enchant and expand. The exhibition is a testament to ingenuity, to diligence, to just what is possible, and because of that I think acts a source of inspiration.

 

This article first appeared in my blog post @ Africa at LSE .

Draft Kenya Investment Policy: Investment growth for sustainable development

Through the leadership of the Ministry of Industry, Trade and Cooperatives (MITC), an inter-ministerial task force has developed a draft Kenya Investment Policy. The policy is aimed at enhancing the conduciveness of the environment for investment growth, though a harmonized approach to investment promotion, facilitation and retention. In addition, the policy provides for revision of legislations affecting the overall investment network.

 

Pic Credit: Mutua Matheka

The development of the Kenya Investment Policy has involved a consultative process covering the national and county governments, including the private sector stakeholders.

Executive summary

To achieve the twin targets of Kenya’s Vision 2030 – 10% growth per annum and middle income industrializing country status – the Government of Kenya recognizes the critical role played by private investment and has put measures in place to attract and retain foreign investment while encouraging the expansion of domestic investment, with the aim of increasing private investment to 24 per cent of GDP by 2030.

Up to now, Kenya has not had a single and clearly defined policy solely focusing on investment generation and retention. The Government of Kenya has however formulated various strategies and policies that focus on investment growth and support, stipulated in various policy documents such as National Development Plans, Sessional Papers and Master Plans, including the new Constitution 2010. These programs and initiatives have had limited impact. They also led to the adoption of various fiscal and non-fiscal incentives, changes in investment related regulations and the creation of several government agencies tasked with responsibility for investment promotion and facilitation, some with overlapping mandates leading to duplication of efforts and unnecessary strain on limited government resources.

To address the limited impact of investment and a number of other challenges relating to the entry and treatment of investment, the Government developed the Kenya Investment Policy. The policy development process took a holistic approach to gain an understanding of Kenya’s context as well as international best practices to inform the policy’s proposals. The policy is guided by six core principles, which emphasise the need for openness and transparency, inclusivity, sustainable development, economic diversification, domestic empowerment, and global integration.

The KIP addresses private investments at the national and county levels. It is a comprehensive and harmonized policy to guide attraction, facilitation, retention, monitoring and evaluation of private investment. The KIP further recognizes the central role of Kenya’s Constitution (2010) which clearly delineates the complementary roles that national and county governments play in investment promotion. The KIP also creates an institutional framework that fosters coordination for efficient investment attraction, facilitation, and a favourable investment climate. The policy actions proposed in the KIP are designed to support and stimulate private sector development and improve the overall ease of doing business and competitiveness in the economy, with the ambition that Kenya becomes the premier destination for at least 50% of multinationals establishing their continental headquarters in Africa.

The KIP addresses some of the fundamental requirements for establishing a well-coordinated investment environment that will attract high-quality FDI into the country while upscaling local SME capacity. These include: a harmonized regulatory and institutional framework for investment; an effective investment promotion and facilitation government function; an active focus on attracting beneficial, high quality foreign investment; building a critical mass of domestic investors including strengthening their capacities; a targeted approach to offering incentives by aligning them to development priorities; significant resources devoted to investor aftercare and increasing national savings.

These objectives are to be achieved through the implementation of critical measures stated by this Policy, including the following:

Investment oversight. Operationalization of the National Investment Council, which will be responsible for formulating the country’s overall investment strategy and implementing the KIP to ensure that investment contributes to the country’s development goals, and approving Bilateral Investment Treaties and investment related chapters in treaties.

Investment promotion and facilitation. The primary responsibility of investment promotion and facilitation falls on the Investment Promotion Agency. Counties, through County Investment Units play a major role by developing bankable projects, outlining their competitive positions, and preparing marketing materials aligned to their areas of strategic focus. Officials at the county level also play an important role in investment facilitation, including securing community approval, providing land where needed, and participating in investment promotion activities for specific investment projects in collaboration with the IPA.

Investment entry and establishment. Various government agencies are involved at different levels along the investment entry and establishment process. The IPA plays a facilitation role among these entities through the One-Stop Centre to minimize the administrative burden on investors and government agencies.

Investment retention and aftercare. Counties play a major role in ensuring that investments located within their territory are given the highest level of attention. The Government is responsible for ensuring that the overall investment climate remains attractive to potential and existing investors. The IPA is responsible for taking the lead to provide effective aftercare services by working with counties and national government actors.

Investment assessment. Ensuring that investments are contributing to the country’s economic, social and environment sustainability objectives is important. Measuring investment impact with respect to community engagement, development objectives, and supplier linkages between investors and small and medium sized enterprises is a shared responsibility among the different actors. While the NIC will spearhead this process, it must work closely with other national and county institutions to ensure that the country continues to target and attract beneficial investment.

Establish a promotion and facilitation fund resourced by both the exchequer and grants from development partners, to be used for the purposes of targeted investment promotion and facilitation.

Establish land banks which could be used for large projects, including encouraging counties to establish a savings scheme where a percentage part of their budget allocation goes to purchasing land to be set aside for investment purposes.

» Download: Kenya Investment Policy, revised draft June 2017 (PDF, 1.08 MB)

 

Source: KEPSA

Towards another resource curse? Remittances and support for democracy in Africa

This article was originally published on The Conversation

Remittance recipients whose priority is the socioeconomic improvements of their lives were found to be less engaged with democratic processes.

Much has been written about the impact of remittance inflows on economic and social outcomes, including economic development, inequality and poverty. But little is known about the effect they have on the attitude of remittance recipients to democracy in sub-Saharan Africa.

Many countries in sub-Saharan Africa have recorded substantial increases in inflows of money from other countries. These include official aid and foreign direct investment. Remittances now exceed official aid in many. They also include remittances from relatives who have left their home country and resettled elsewhere.

A recent study finds that remittances have a different impact when it comes to support for democracy. Although similar studies have been done in Mexico, this is the first to use the priorities of citizens as the basis for studying the relationship between remittances and political engagement in sub-Saharan Africa.

The study relied on the Afrobarometer data. This contains a series of national surveys on the attitudes of citizens towards democracy, market, civil society and other aspects of development. The surveys are available for 36 sub-Saharan African countries.

Positive and negative effects

There is a wide body of literature on the impact of remittances on poverty alleviation and reduction of income inequality. These cash transfers can also help recipients survive periods when they have shortfalls in their other incomes. Remittances may under some circumstances also contribute to economic growth.

They have negative effects too. Remittances have been found to have a negative effect on the quality of institutions. This is because remittances can be seen as substitutes to government spending on public services. They do this by enabling recipients to buy services they would otherwise be entitled to demand from the state.

When remittance recipients buy pubic services such as education or health from the private sector, for example, this often leads to a decline in government effectiveness and accountability. It may also result in an increase in corruption.

Impact depends on where priorities lie

The impact depends on the priorities remittance recipients have chosen. Recipients who have chosen rights and freedom as their priority were found to be as supportive of democracy as much as non-recipients. But recipients who rank higher improvements in their standard of living were found to be less engaged with democratic processes.

The study’s findings strike at the core of democratisation theories which have singled the growth of middle income earners as one of the driving forces for democracy.

The umbilical cord between remittances and democratic processes is the provision of public goods, a role fulfilled by the state. Public goods include public services such as health, education and roads.

The incentive therefore for supporting democracy depends, among other factors, on whether the priority chosen by remittance recipients is a good that can be exclusively provided by the state. But it also depends on whether the state is willing and able to provide such a public good.

Remittances enable recipients to buy public services. This means they no longer have an incentive to hold government accountable for providing, or improving the quality of, pubic services.

Many citizens in sub-Saharan Africa rely on remittances from another country. Reuers/Omar Faruk

The effect of remittances on democracy

Recent studies have also explored the effects of these inflows on the behaviour and attitude of citizens to politics. Migrant remittances have the potential to lower political participation by recipients.

Yet little is known about the effects of receiving remittances on the legitimacy of democracy in Africa, a region where democracy is a relatively new concept. Legitimacy of democracy is defined as the degree of endorsement and support for democracy by the citizens.

Democracy has been posited as a universal value and then associated with many desirable features, among them development and social welfare. This has raised the question why some countries are democratic while others are not. Political scientists argue that the legitimacy of democracy is an important determinant of the level of democracy supplied in a nation.

Following this line, several researchers have done valuable analyses to determine the most prominent socioeconomic characteristics that may explain the degree of support for democracy of citizens.

Other researchers have explored the link between the level of educationand democracy. They tested to what extent the different levels of education may increase the likelihood that citizens support democracy.

The findings of the study on the impact of remittances on attitudes to democracy point to the risk of remittances hindering the development of democracy in sub-Saharan Africa. A lot depends on whether the balance of Africa’s population tilts more towards individuals who are more concerned about improving their standard of living than rights and freedom.

Author

1. Maty KonteResearch Fellow at United Nations University

Disclosure statement

Maty Konte works for United-Nations University. She is affiliated with United-Nations University (UNU-MERIT).

The Conversation is funded bythe National Research Foundation, the Knight Foundation and Barclays Africa. The Bill & Melinda Gates Foundation is a Strategic Partner.

The Growth-Governance Paradox in Africa

By Pierre Englebert and Gailyn Portelance

The essential features of Africa’s Growth-Governance Paradox were delineated in 1990 by scholar Jeffrey Herbst. Economic reform programs prescribed by international financial institutions, often called structural adjustment, were premised on reducing the distributional role of the state and maximizing the play of market forces. Herbst noted a contradiction: governing regimes were being encouraged to alter the clientelistic political systems on which their power rested.¹

A quarter-century later, sub-Saharan Africa has experienced the most continuous period of economic growth since the 1950s and 1960s. What explains this development: high commodity prices, economic liberalization, better governance and democratization? Some development economists, such as Mushtaq Khan, do not see the necessity of implementing the full “good governance agenda” to achieve a turnaround in economic performance. A theoretical framework, “developmental patrimonialism”, has also been advanced by a group of Africa experts to explain authoritarian modernization in a few countries.

Blending qualitative and quantitative analyses, Pierre Englebert and Gailyn Portelance move beyond competing analyses. They inquire why relatively small changes in governance in a group of African countries called “developers” (in contrast to “laggards”) has had such a disproportionate impact on economic performance, and notably in attracting foreign direct investment. Their preliminary report and key hypothesis warrant careful study by scholars, policy analysts, and domestic and external investors.² It can precipitate a wave of incisive research and better understanding of the political economy of contemporary Africa.

THE PARADOXICAL POLITICS OF GROWTH

Over the last year and a half, we have been involved in a research project that addresses some of the questions that have also been central to AfricaPlus since its founding.³. In this contribution we summarize our progress and offer the main hypothesis that our research has generated so far.

We address two central questions. First, is the economic growth of resource-poor African countries linked to improvements in their economic governance? Second, if the answer to the first question is yes, what is the political rationality of such governance improvements? Interestingly, as this research note will hopefully make clear, the answer we found to the first question significantly altered the nature of the second question.

A few words of clarification. By economic governance we refer to both rule-of-law type governance (e.g., property rights and corruption) and state or bureaucratic capabilities, or what Mushtaq Khan calls “market-enhancing” and “growth-enhancing” governance.⁴ The political rationality question addresses what struck us as a potential contradiction between governance-based explanations of African growth and the general understanding of Africa’s previous stagnation as the result of neopatrimonial politics.⁵ If African politics is based on a neopatrimonial logic of instrumentalization of the state and its resources for political benefit, how can it produce governance improvements without rulers committing political suicide? Did something change in the nature of politics in some African countries that suddenly made such improvements politically feasible? This is an important question because its answer might challenge our understanding of African politics.

There has been significant innovative scholarship on these very questions over the last few years. Some authors have suggested that the political transformation of the early 1990s have been sufficient to usher in a greater degree of institutional accountability and, with it, more responsive governance.⁶ Others have called our attention to the wide variation in the extent of neopatrimonialism in Africa with the result that some regimes have been able to shape more developmental governance.⁷ More recent contributions in the same vein have suggested that special features of neopatrimonialism can make a difference. Particularly when regimes can concentrate rents and develop longer time horizons, neopatrimonialism can be developmental.⁸ Finally, some recent contributions argue that clientelism in and of itself is universal and not inimical to better governance, provided existing political arrangements, and particularly alliances between political and business elites, share a commitment to growth.⁹

Much of this work has focused on a few case studies of apparent developmental success stories such as Ethiopia and Rwanda, or successful moments in other countries such as the 1960-75 period in Côte d’Ivoire or the 1964-78 period in Malawi. Ethiopia and Rwanda, particularly, have figured centrally in the discussion of the possibility of developmental statehood in Africa, with the late Ethiopian Prime Minister Meles Zenawi making no secret of the ambitions of his regime in this respect.¹⁰ These two countries are, however, in some fundamental ways continental outliers, not least because of their very unique security situations. Having learned a lot from their experiences, we were nevertheless eager to go beyond these specific case studies and try to identify more aggregate patterns, since many more African countries have experienced significant growth.

METHODOLOGY AND RESEARCH FINDINGS

Methodologically, we have limited ourselves to resource-poor countries in order to control for the widespread commodity boom which is responsible for much of the continent’s recent performance. We first ranked all African economies by their rate of per capita economic growth from 2000 to 2013. We then excluded those that derived more than 10% of their GDP from mineral rents. From the remaining countries we selected two “most different” samples: one including the ten fastest growing countries and the other the ten slowest growing. The first group, which we call the “developers,” includes Burkina Faso, Cape Verde, Ethiopia, Ghana, Lesotho, Mozambique, Namibia, Rwanda, Tanzania, and Uganda, and averages 5.33% growth.¹¹ The second group—the “laggards”—comprises Burundi, the Comoros, Côte d’Ivoire, Eritrea, Gambia, Guinea Bissau, Madagascar, Malawi, Togo and Zimbabwe, with a collective growth performance of -0.45%. A visual inspection of their divergent growth trajectories suggests the need for some explanation.

Our next step was to ask whether similar differences are observable between these two groups in the realm of governance. Using raw scores from the Mo Ibrahim Index which seemed more reliable that the usual World Bank aggregate governance indicators,¹² we do indeed observe statistically significant variations in some rule-of-law and capacity-type indicators of economic governance.

However, once we looked more carefully at these differences, we observed that they were constant and rather limited in absolute terms except, interestlingly, for bureaucracy and red tape . In other words, for the whole period of time for which the Mo Ibrahim Index has data, these two groups of countries display steady but usually limited differences in governance quality, in contrast to their increasingly divergent economic performance. The graph below illustrates this point with the example of one variable but the same pattern applies to the others. Note that the performance of the developers remains below the mid-point of possible values, suggesting that while governance is better in these countries, it is still not good, an important point to which we return later.¹³

This observation led us to ask when this difference in governance began. Were developers always better than laggards or did they undergo some change in the quality of their governance at some point before 2000. If the difference was always there, then governance might not have much to do with the growth difference between our countries. But if a separation took place at some point before 2000, then it might be related to the increased growth divergence over the same period and it might point to a specific event or set of events that could help us explain the changes.

Because the Ibrahim data do not precede 2000, we switched to another source, the Inter-Country Risk Guide (ICRG) from Political Risk Service. While ICRG data are available from the mid-1980s, the indicators are not exactly similar to the Ibrahim variables. Moreover, there are no observations for Cape Verde, Lesotho and Rwanda among the developers, and for Burundi, Comoros and Eritrea among the laggards.

Nevertheless, working with what we have and aggregating three different relevant ICRG variables (bureaucratic quality, law and order, and corruption), we found that there was indeed a moment in the first half of the 1990s when developers (which were performing worse than laggards at first) overtook the laggards in terms of governance quality, as the graph below indicates. Both groups then sagged in the second part of the 1990s before stabilizing at fairly constant distance from each other as also indicated by the Ibrahim data.

The two main findings are as follows: First, there is a specific moment when differentiation takes place instead of a permanent difference or continuous governance improvements for developers; and second, the performance of developers is good relative to laggards but still below the mid-point in terms of absolute value – in contrast to their growth which is fast in absolute terms. This performance is a far cry from developmental statehood.

ALTERNATIVE EXPLANATORY ARGUMENTS

To what extent does current work on Africa’s growth and governance help us make sense of these patterns in our data? At this stage of the research, we can provide only preliminary and tentative answers to this question. We look here briefly at the apparent merits of three types of argument: the role of democracy, developmental patrimonialism, and the possible effects of security dilemmas. We then move on to explore a new hypothesis which emerged from the data.

The most obvious correlation in the time trends is between improvements in governance and the democratization of the early 1990s. This pattern might support the hypothesis that democratization brought about these improvements . The graph below, using Freedom House ‘s inverted scale, shows indeed that laggards are more uniformly non-democratic than developers.

There is no shortage of theories as to why this would be the case. Peter Lewis has written of the “elective affinity” between political and economic freedoms, of the greater accountability of democratic regimes to demands for better governance (a claim also made by Steven Radelet), and of the greater political voice of business communities in democratic regimes.¹⁴ Michael Bratton and Nicolas van de Walle also argued almost 20 years ago that democratization in Africa proceeded from economic grievances; and Peter Lewis reminds us that we should not be surprised to see economic agendas at the core of democratic regimes.¹⁵ Ann Pitcher’s latest book, although focusing on privatizations more than overall governance, nevertheless makes the applicable argument that the more enforceable commitments of democratic regimes might provide some degree of explanation.¹⁶

However, the box-plot diagram above also indicates that developers are far from being uniformly democratic (actually, Ethiopia and Rwanda are two of the top three fastest growers). Booth and Cammack have also rather compellingly argued that development is less a principal-agent matter of accountability than one of collective action.¹⁷Moreover, while there is consistency in the democratic and governance transformations of the early 1990s, that does not necessarily mean that the former triggered the latter. Both might have been the effect of some other factor.

The developmental patrimonialism argument suggests that centralization of rents, long-term horizons and pro-active industrial policy are the hallmarks of developmental regimes in Africa.¹⁸ While this model matches Ethiopia and Rwanda fairly well, it is more of a stretch for the other developers in our sample, all of which are closer to the “competitive clientelism” model. The latter, however, is considered inimical to developmental governance. Even the likes of Ghana, Mozambique or Tanzania show relatively little of the proactive control that a developmental state is expected to exert over the economy. And a recent paper by Henning Melber calls the Namibian state “incompetent” rather than developmental.¹⁹ It seems to us therefore that the threshold provided by this theory is too high for explaining growth and development in most of Africa.

Finally, there is a convincing argument, mostly elaborated in the context of some Asian states, that security threats discipline states into being developmental.²⁰ Again, this argument matches well the conditions of Ethiopia and Rwanda where minority regimes issued from violent conflicts rely on development to generate the legitimacy they need to survive. But, it is once again less of a match with the rest of the sample, although we note that there are a few post-conflict states in our group, including Mozambique, Uganda, and Namibia, but these regimes have not recently faced an existential threat. However, we could see some post-conflict rebound in our data, or maybe the reflection of more structural changes brought about by such violent crises. In the same vein, it is worth noting that there is a large number of post-socialist countries in our “developers” group.

AFRICA’S ECONOMIC TURNAROUND: A MODEST HYPOTHESIS

While all these theories contain powerful explanatory elements, our data point us towards an additional albeit tentative hypothesis. What bothered us, to some extent, were the high thresholds of state behavior projected by the democratic, developmental-patrimonialism, and security theories. We did not see such transformed or transformative behavior in most of our “developers.” Rather, we saw minimal, almost baby-steps of enhanced governance somehow matched by large improvement in growth. It seemed that a more modest theory was needed to make sense of the economic turnaround in these countries, but one that could also make sense of the large effects of small changes.

We were also intrigued by the behavior of another variable that matched the growth performance of our two groups fairly well: Foreign Direct Investments (FDI). As the graph below suggests, our “developers” have been the recipients of significant and exponentially rising amounts of FDI, quite in contrast to the nearly flat line of “laggards.”

We wonder to what extent “developers” might be engaged in a signaling exercise aimed at foreign capital. Maybe small but noticeable governance changes, in their bureaucracies and institutions, have been sufficient over the last decade or so to attract large flows of FDI, especially if such changes contrast with the countries that have not introduced them. In an era of low interest rates, these small changes might have been enough to mitigate the perception of risk investors associate with Africa. Their investments might be in some early stages of manufacturing or in the provision of goods and services for African consumers. They can also tap the more limited but still substantial export commodities of some of these countries, particularly agricultural, and they might represent exploration costs in mineral or energy sectors (as in Ghana, Mozambique, Namibia or Tanzania).

Interestingly, such marginal changes would be quite possible without any fundamental political restructuring and would thus be compatible with the continuation of neopatrimonial practices. By and large, a different regime can be applied to foreign investors than exists for domestic actors. “One-stop shops” and other efficiency islands can be developed to reduce transaction costs for foreign investors and improve the ease of doing business, while prebendal and neopatrimonial logics persist in other state institutions.

Such an approach would reproduce the signaling practices of many African countries towards donors. Matt Andrews has shown that a few easy and relatively costless steps are usually taken to get the aid flowing before reforms actually stall.²¹ It would also be consistent with the “partial reform syndrome” that has been prevalent on the continent.²² More importantly, it would not require any significant changes to neopatrimonial practices (nor much institutional or policy capacity), as it would essentially bifurcate the institutional environment, making governance improvements in some sectors largely aimed at foreigners, while maintaining the same neopatrimonial logic for the rest of the state (and using some of the resources derived from the foreign sector to feed redistribution in the domestic one).

In this respect, the similarity between the logic and timing of governance and democratic reforms might not be particularly causal. They might both derive, on average, from the same signaling logic and might both preserve in the end, rather than reform, neopatrimonialism.

Although it must be emphasized that this hypothesis is at a preliminary stage, the combined data from both groups of countries is consistent with such a signaling argument. As we mentioned earlier, and the two graphs below illustrate, “developers” do not perform particularly well in absolute value. However, once countries pass a minimal threshold of differentiation with the performance of “laggards”, there is a visible FDI response.

In conclusion, we suspect that the economic turnaround in Africa’s resource-poor countries might derive from marginal and politically affordable governance changes largely geared towards attracting FDI without undermining the redistributive logic of domestic politics. If this hypothesis turns out to be accurate, then such strategies might be tested by likely changes in monetary policy in the West which could affect the cost-benefit calculus of investors.

Once again, our findings are preliminary and we offer them in the hope of contributing to discussions of this important topic. In summarizing our findings here, we have glossed over some nuances and variations. The next stage of this research will involve refining the quantitative work, breaking down the nature and sectors of foreign direct investments, developing qualitative narratives of governance reforms in “developers” to further examine the signaling hypothesis, and implementing other useful suggestions that readers of this blog will be kind enough to share with us.

Bibliography

1. “The Political Adjustment of Politics in Africa,” World Development, 18, 7 (1990).
2. The full title of the draft paper from which this essay is derived is ‘Small steps for Governance but a Giant Leap for Development? The Politics of Growth in Resource-Poor African Countries’. Some of these preliminary findings were presented at the African Studies Association annual meeting in Indianapolis, Indiana, this past November.
3. For example, see https://africaplus.wordpress.com/2013/07/03/governance-and-economic-growth-in-africa-rethinking-the-conventional-paradigm/ andhttps://africaplus.wordpress.com/2014/04/03/africas-third-liberation-transitions-to-inclusive-growth-and-developmental-governance/.
4. Mushtaq Khan. “Governance and Growth: History, Ideology, and Methods of Proof.” In Akbar Noman et al (eds.). Good Growth and Governance in Africa: Rethinking Development Strategies. Oxford University Press, 2012, 51-79.
5. E.g., Michael Bratton and Nicolas van de Walle. Democratic Experiments in Africa.Cambridge University Press, 1997; Richard Joseph. Democracy and Prebendal Politics in Nigeria. Cambridge University Press, 1987; Richard Sandbrook, “The State and Economic Stagnation in Tropical Africa.” World Development, 1986, 14(3): 319-332.
6. Steven Radelet. Emerging Africa: How 17 Countries Are Leading the Way.Washington, DC: Center for Global Development, 2010; Peter Lewis. “Democracy and Economic Performance.” In Ellen Lust and Stephen Ndegwa (eds.). Governing Arica’s Changing Societies: Dynamics of Reform. Lynne Rienner Publishers, 2012, 45-72.
7. Ann Pitcher, Mary Moran and Michael Johnston. “Rethinking Patrimonialism and Neopatrimonialism in Africa,” African Studies Review, 2009, 52(1):125-156; Daniel Bach and Mamoudou Gazibo. Neopatrimonialism in Africa and Beyond.London: Routledge, 2012.
8. Tim Kelsall. Business, Politics and the State in Africa. London: Zed Books 2013; Booth, David and Fred Golooba-Mutebi. “Developmental Patrimonialism? The Case of Rwanda.” African Affairs, July 2012, 111(444): 379-403.
9. Hazel Gray and Lindsay Whitfield. “Reframing African Political Economy: Clientelism, Rents and Accumulation as Drivers of Capitalist Transformation.” London School of Economics: Working Paper Series 14-159, October 2014.
10. Meles Zenawi. “States and Markets: Neoliberal Limitations and the Case for a Developmental State.” In Noman et al. op.cit., 140-174.
11. We did not include Liberia because of the role of donors in its economic performance, which has disconnected policy choices from domestic political realities. See Amos Sawyer. “Emerging Patterns in Liberia’s Post-Conflict Politics,”African Affairs, 2008, 107(427):180; and Radelet, op.cit., 7.
12. http://www.moibrahimfoundation.org/interact/. The index starts in 2000, but not all indicators have data for every year. We average data for available years.
13. Ibrahim extrapolates this indicator backwards from 2006 to 2000, hence the straight line over that period, but the trend is similar for those that have actual data going back to 2000.
14. Peter Lewis, op.cit., 47-48; Radelet, op.cit.
15. Bratton and van de Walle, op.cit.; Lewis, op. cit.
16. Anne Pitcher. Party Politics and Economic Reform in Africa’s Democracies.Cambridge University Press, 2012.
17. David Booth and Diana Cammack. Governance for Development in Africa: Solving Collective Action Problems. London: Zed Books, 2013.
18. Kelsall, op.cit., inspired by the work of Khan.
19. Henning Melber, “The Namibian State of Development: Evidence for a Developmental State?” Paper presented at the 2014 meeting of the African Studies Association, Indianapolis, Indiana.
20. Richard F. Doner, Bryan K. Ritchie and Dan Slater. “Systemic Vulnerability and the Origins of Developmental States: Northeast and Southeast Asia in Comparative Perspective,” International Organization, 2005, 59, 327-361.
21. Matt Andrews. The Limits of Institutional Reform in Development: Changing Rules for Realistic Solutions. Cambridge University Press, 2013.
22. Nicolas van de Walle. African Economies and the Politics of Permanent Crisis, 1979-1999. Cambridge University Press.

Article cross posted from AfricaPulse.wordpress.com

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