One story about East Africans, money, babies, and the future
What you need to know:
- The latest “Happy Planet Index” found that Botswana was the most miserable country in Africa.
- Bloomberg’s Misery Index rated South Africa the third most miserable place on earth of the 74 economies it surveyed.
- East Africa does not really know what a commodity windfall looks like.
Kenya overtook South Africa to become the biggest investor in other African countries in terms of the number of projects in 2015, a report by consulting firm Ernst & Young said a few days ago.
Kenya invested in 36 projects last year in other parts of the continent against South Africa’s 33.
South Africa, however, bested Kenya in terms of the value of the projects at Sh200 billion, compared to Kenya’s Sh100 billion.
Most of these Kenyan investments were in the East African Community (EAC).
In that sense, to understand Kenya’s performance, one needs to look at what is happening in East Africa — and beyond just economies.
Likewise, we need to survey southern Africa, a critical trade and investment region for South Africa.
I spent the past two-plus years straddling the two regions, and some differences are striking.
Take Botswana. It is a small nice country, has Africa’s longest running uninterrupted multiparty democracy, is one of the least corrupt on the continent, and today is a “middle income” economy, Africa’s third-richest per capita.
MISERABLE COUNTRIES
However, the latest “Happy Planet Index” found that Botswana was the most miserable country in Africa.
Then consider South Africa. For all its troubles and crime, it is still Africa’s most advanced economy.
Just over two years ago it was overtaken by Nigeria as Africa’s largest economy, but partly because of the West African giant’s problems, it has closed the GDP gap again to $60 billion now from $170 billion at the end of 2015.
However, at the start of the week Bloomberg’s Misery Index rated it is the third most miserable place on earth of the 74 economies it surveyed.
And, sure enough, earlier in the year South Africa was rated the fifth most miserable place by the Cato Misery Index.
It is not unreasonable to assume this proclivity to be morose, even when you are fairly rich compared to everyone else, will affect your ability to spend your money outside your borders.
But why is southern Africa in some kind of funk, and yet it is the only region that is not afflicted by things like terrorism, which is blighting life in other parts of the continent?
It probably has to do with three things.
First, East Africa on the whole historically never made its fortune on natural resources — gold, diamonds, or oil.
You could say the region has scratched and hustled to eat.
East Africa does not really know what a commodity windfall looks like and companies, therefore, do not always venture outside their borders because the profits are “obvious”.
They expect to get on the ground and scratch out the profits.
But another chunk of it has to do with prospects for the future.
POST-CHINA 16 COUNTRIES
By early last year, it was all too evident that China was already at the peak of its high growth, cheap labour era and that its comparative export advantage of low wages and a large workforce would soon be chipped away.
Other countries with cheaper labour than China, and poised to inherit its growth model, were emerging on the horizon.
The global intelligence company, Stratfor, identified 16 countries it called “the Post-China 16”, which were best positioned to take over as global manufacturing hubs, particularly in garment and footwear as well as mobile phone assembly.
Among these are Ethiopia, Uganda, Kenya, and Tanzania. There was no southern African nation on the list.
One can quarrel with these reports, and they often do not pan out, but it is still significant that the wider East Africa has the “vibe” looking to the decades to come that other regions do not.
A part of this has to do with where the future market in Africa will be in terms of mouths to feed.
Barring Nigeria, the biggest countries in terms of population in Africa will be in eastern Africa — DR Congo, Tanzania, Ethiopia, Uganda, Kenya.
In fact, if we leap ahead 84 years, I have seen crazy projections that have little Uganda having more people than Egypt by 2100!
One cannot be sure whether because they are not happy, they are not making enough babies or because they are not making enough babies, they are unhappy, but the prospect of a future shortage of grandchildren is probably not good for southern African spirits.
In that sense, then, we owe endless gratitude to the wombs of East African women. They are remaking both the continental economy and its demographic map.
The author is editor of Africa data visualiser Africapedia and explainer site Rogue Chiefs. @cobbo3.
