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Africa Progress Report 2012

Africa Progress Report 2012
http://africaprogresspanel.org/en/publications/africa-progress-report-2013/

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Africa Progress Report 2012 Africa Progress Report 2012 Document Transcript

  • Jobs, Justice and EquityAfricaProgressReport 2012Seizing opportunities in times of global change
  • 2AFRICA PROGRESS REPORT 2012ABOUT THE AFRICA PROGRESS PANELThe Africa Progress Panel (APP) consists of ten distinguished individuals from the private and public sector, whoadvocate on global issues of importance to Africa and the world. Mr Kofi Annan, former Secretary-General ofthe United Nations and Nobel laureate, chairs the APP and is closely involved in its day-to-day work.The Panel’s unique convening power allows it to focus on complex and high-impact issues such as globalgovernance, peace and security, climate change, food security, sustainable economic development, andthe Millennium Development Goals (MDGs). While these problems have immediate ramifications for Africa, theirsolutions require the coming together of a wide range of stakeholders within and outside Africa.The life experiences of Panel members give them a formidable ability to access a wide and deep cross-sectionof society. This means they are well placed to affect change on issues that require the engagement of multiplestakeholders. The Panel’s primary objective is to advocate for shared responsibility between African leaders andtheir international partners to ensure sustainable and equitable development in Africa.about the africa progress REPORTThe Africa Progress Report is the Africa Progress Panel’s flagship publication. Its purpose is to provide an overviewof the progress Africa has made over the previous year. The report draws on the best research and analysisavailable on Africa and compiles it in a refreshing and provocative manner. Through the report, the Panelrecommends a series of policy choices and actions for African policy makers who have primary responsibility forAfrica’s progress, as well as vested international partners and civil society organisations.Olusegun Obasanjo Linah Mohohlo Robert Rubin Tidjane Thiam Muhammad YunusKofi Annan Michel Camdessus Peter Eigen Bob Geldof Graça MachelISBN: 978-2-9700821-0-1
  • 3Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeACKNOWLEDGEMENTSCaroline Kende-Robb (Africa Progress Panel), Kevin Watkins (Brookings Institution), Peter da Costa (AfricaProgress Panel) and Richard Manning (Oxford University) led the report’s preparation and research.The Africa Progress Panel would like to thank the following contributing authors: Nicholas Cheeseman (OxfordUniversity), Hubert Danso (Africa Investor), Shanta Devarajan (World Bank), Roberto Foa (Harvard University),Charles Lwanga-Ntale (Development Initiatives), Alexandre Marc (World Bank), Stephen N’Degwa (WorldBank), Emmanuel Nnadozie (UNECA), Jürgen Reitmaier (Consultant), Changyong Rhee (Asian DevelopmentBank), Guido Schmidt-Traub (CDC Climat Asset Management).The Africa Progress Panel would also like to acknowledge the valuable contributions of N’Dri Assié-Lumumba(Cornell University), Nina Behrman (Editor), Richard Carey (Founding Co-Chair, China-DAC Study Group), PaulCollier (Oxford University), Jim Cust (Oxford University), Nathalie Delapalme (Mo Ibrahim Foundation), Alan Doss(Kofi Annan Foundation), Jamie Drummond (ONE), Magnus Ericsson (Raw Material Group), Louise Fox (World Bank),Benedikt Franke (Cambridge University), Patricia Geli (World Bank), Barbara Goedde (Kofi Annan Foundation),Alan Hinman (Task Force for Global Health), Andrew Johnston (Editor), Elsie Kanza (World Economic Forum), KarutiKanyinga (South Consulting), Michael Keating (UN), Christoph Lakner (Oxford University), Franklyn Lisk (WarwickUniversity), Carlos Lopes (UNITAR), Strive Masiyiwa (Econet), Festus Mogae (Former President of Botswana andCoalition for Dialogue on Africa), Michael Møller (Consultant), Esther Mwaura (Grassroots Organizations OperatingTogether in Sisterhood), Archbishop Ndungane (African Monitor), Aloysius Ordu (World Bank), Patrick Osakwe(UNCTAD), Sarah Papineau (UNDP), Judith Randel (Development Initiatives), Alastair Robb (UK Department forInternational Development), Valentine Rugwabiza (World Trade Organization), Elisabeth Sandor (OECD), TesfaiTecle (Alliance for a Green Revolution in Africa), Carolyn Turk (World Bank), Alyson Warhurst (Maplecroft), andJiajun Xu (Oxford University).The APP would also like to acknowledge the generous support from the Bill & Melinda Gates Foundation, theGerman Ministry for Economic Cooperation and Development (BMZ) and the UK Department for InternationalDevelopment (DFID).Caroline Kende-Robb, Executive DirectorViolaine BeixJared BlochAlinka BrutschPeter da CostaKibrom MehariTemitayo OmotolaCarolina RodriguezZelalem TeferraThe cover design is inspired by the pattern found on the Ethiopian magic scroll of Wälättä-Gabriel from the 19thcentury. Magic scrolls are a traditional form of talismanic and figurative art from the Horn of Africa.Infographics by Carolina Rodriguez in collaboration with Blossom Communications (Milan).This report may be freely reproduced, in whole or in part, provided the original source is acknowledged.SECRETARIATDESIGN AND LAYOUT
  • 4AFRICA PROGRESS REPORT 2012FOREWORD 6INTRODUCTION 8A mixed balance sheet 8A growing demand for equity and justice 9PART I: ‘AFRICA RISING’ – BUT WHILE SOME AFRICANS ARE RISING, OTHERS ARE NOT 131. Economic growth – moving to the premier league 142. The record on poverty – constrained by inequality 163. Looking for work – the employment challenge 20Despite growth, labour markets remain informal 204. Unjust disparities – a brake on progress towards the MDGs 22Poverty and inequality 22Weak progress on hunger 23Education and health – progress and disparities matter 245. The glass “half-empty” perspective 256. Building on the global partnership 29PART II: FIVE GLOBAL TRENDS THAT ARE SHAPING AFRICA 311. Demography and human geography – preparing for the youth surge 32The power of demography 32Urbanisation is reshaping human geography 332. Global food security – more people on a warming planet 37World agriculture – a new era of scarcity 37On the front line – African food security 39The great African land grab 403. Tectonic shifts in economics and politics – the rise of the emerging powers 44Managing integration with emerging markets 46Integrating Chinese finance with development goals 48Creating the wider conditions for growth 494. Science, technology and innovation – fuelling growth and development 51Towards an African agenda for science, technology and innovation 51ICTs continue to exceed expectations 525. The rising tide of citizen action 54Global social protests 54Citizens’ participation in enhancing democratic governance 54PART III: GOVERNANCE FOR A BETTER FUTURE 591. Multiparty democracy – playing by the rules 60Learning from flawed elections 602. The changing map of African conflict and instability 64Escaping conflict 663. Improving business governance 674. Managing natural resources for the public good 69table of contents
  • 5Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangePART IV: EDUCATION – A TWIN CRISIS IN ACCESS AND LEARNING 731. The education progress report 75Inequalities are hampering progress 75Learning outcomes – a weak record 77Skills deficits among Africa’s youth 77Education inequalities in global perspective 782. An agenda for addressing Africa’s education crisis 79The early years 79Access and learning – delivering on the MDG promise 79Aligning education, skills development and employment 803. The role of aid donors 81PART V: MOBILISING AND MANAGING FINANCES FOR DEVELOPMENT 831. Domestic resources are the key to sustainable growth 842. Creating a better climate for foreign direct investment 88Improving the business environment 88Stimulating investment outside the natural resource sector 893. Prospects for concessional finance 90Future levels of aid from traditional donors 90Emerging support for Africa rises 914. Growing African economies and access to ‘harder’ loans 925. Managing official support better 94PART VI: RECOMMENDATIONS AND CONCLUSIONS 951. Recommendations 962. Conclusions 102ANNEXES 1051. Acronyms 1062. List of boxes 1073. List of figures 1074. References used in the figures 1085. Notes 111
  • 6AFRICA PROGRESS REPORT 2012Annual reports often begin with the observationthat the year in question has been a particularlyeventful one, but rarely has it been as fitting as thisyear. We have seen enormous change across Africaand the world. We have witnessed the spread ofrevolutions, the end of autocratic regimes and thebirth of new democracies. We all held our breathas countries and currencies narrowly escapedcollapse and towering debt burdens threatened tochoke the world economy. Once again, the worldas we know it has changed dramatically in thecourse of months.The “Arab Awakening”, combined with the rise of newsocial movements across the world in 2011, caughteveryone by surprise. The common thread linkingthese movements is the shared sense of frustrationand anger over unresponsive governments, andthe lack of jobs, justice and equity. For societies tofunction and prosper, I have always argued thatwe need three inter-related conditions: economicand social development; peace and security; and,the rule of law and respect for human rights. In thecountries affected by the “Arab Awakening”, therehas been a longstanding and near-total absence ofthe third condition.To the surprise of many, Africa has mostly stood tallthrough all of this. The majority of its 54 countries haveweathered the recurrent financial and economicstorms and have continued to impress as they traversethe road to recovery. A few have even been able totake their place among the world’s top performers inthe economic growth league. There has also beenencouraging progress towards some of the MillenniumDevelopment Goals (MDGs). Many countries haveregistered gains in education, child survival and thefights against killer diseases like HIV/AIDS and malaria.None of this is cause for complacency.It cannot be said often enough, that overall progressremains too slow and too uneven; that too manyAfricans remain caught in downward spirals ofpoverty, insecurity and marginalisation; that too fewpeople benefit from the continent’s growth trendand rising geo-strategic importance; that too muchof Africa’s enormous resource wealth remains inthe hands of narrow elites and, increasingly, foreigninvestors without being turned into tangible benefitsfor its people. When assessing nations, we tend tofocus too much on political stability and economicgrowth at the expense of social development, rule oflaw and respect for human rights.We at the Africa Progress Panel are convinced thatthe time has come to rethink Africa’s developmentpath. Not all inequalities are unjust, but the levels ofinequality across much of Africa are unjustified andprofoundly unfair. Extreme disparities in income areslowing the pace of poverty reduction and hamperingthe development of broad-based economic growth.Disparities in basic life-chances – for health, educationand participation in society – are preventing millionsof Africans from realising their potential, holding backsocial and economic progress in the process. Growinginequality and the twin problems of marginalisationand disenfranchisement are threatening thecontinent’s prospects and undermining the veryfoundations of its recent success.Justice and equity are certainly not new concepts.Here we use them in their broadest sense. By lookingat the triangle of jobs, justice and equity, we underlinethe role of empowerment and equality of opportunityas indispensable for progress and thus particularlypowerful focal points for domestic policy initiativesand international development assistance. Wehighlight jobs because it is through their livelihoodsthat people achieve social progress, for themselvesand for others, and because the need to create jobsfor the continent’s rapidly growing youth populationstands out as among the most pertinent challengesfor Africa’s policymakers. Failure to create jobs andopportunities for a growing and increasingly urbanisedand educated youth will have grave consequences.And we highlight justice and equity because in theeyes of hundreds of millions of Africans both are soconspicuously absent from their lives.forewordBy kofi annan
  • 7Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeAgainst this backdrop, our report sets out someproposals for change. With the 2015 deadline for theMDGs fast approaching, we urge every governmentin Africa to draw up a plan of action for a “big push”towards the targets. These plans should includeprovisions to reduce inequalities in child survival,maternal health and education. Given the criticalplace of education in poverty reduction and jobcreation, we urge governments to deliver on thecommitment to provide education for all by 2015 – andto strengthen their focus on learning achievement. Wealso urge governments to focus on including womenand girls in education, which is essential for creatingmore just, prosperous and fair societies.Food security and nutrition is another pressing concern.We must never again witness the human tragedy thatunfolded in the Horn of Africa. It is time for Africangovernments and the international community tocome together and build more robust defencesagainst the scourge of Africa. Raising the productivityof smallholder farmers is critical. That is why we call ongovernments to bring these farmers from the peripheryto the centre of national strategies for growth andpoverty reduction. Climate change poses a profoundthreat to African agriculture. Countering that threatwill require international cooperation. It is imperativethat Northern governments act swiftly to financeadaptation to climate change, not least becauseearly investments in infrastructure, water managementand soil conservation will yield high returns. And aneffective food and nutrition security strategy has toinclude safety net provisions both nationally, throughsocial protection programmes, and internationallythrough a more effective humanitarian-responsearchitecture.In this report we highlight a number of global trendsthat will shape Africa’s future. There is a stronglikelihood that the world is moving into an era ofhigher food prices. One effect of that prospect hasbeen to drive a “land grab” in Africa. While foreigninvestment in productive farming can be enormouslybeneficial, governments need to remain vigilant inguarding against speculative activity and the risk ofdisplacement of smallholder African farmers. As theeconomic growth pole of the world economy movesEast, Africa stands to gain from strengthened tradelinks with China and other emerging markets. But it isvital that governments establish trade and investmentpolicies that create incentives for entry into highervalue-added areas of production.Despite growing domestic resources and improvedgovernance and administrative systems, Africanleaders cannot do it alone. They need to be ableto count on the sustained commitment of theinternational community and the fulfilment of its manyoutstanding promises. At a time in which many donorsview their development assistance as expendablebudget items, African leaders need to remindtheir partners of the intrinsic value of seeing it as aninvestment in a common future. Donors also need tohonour and act upon the aid commitments that theymade in 2005.Naturally, the empowerment of Africans in theirsocieties and economies is only one side of the coin.The empowerment of Africa in the global societyand economy is the other, and seemingly no lesschallenging. Despite repeated promises to thecontrary, the continent remains as marginalised in theworld as many of its people remain in their countries. Itremains heavily underrepresented in global institutionsand constrained by unfair rules it does not have thepower to change. The failure of the G20 to articulatea vision for supporting Africa’s development, or toprovide the region’s poorest nations with a place atthe table, is a disappointment. There are numerousqualified leaders in Africa.Both in Africa and internationally we must intensifythe focus on fairness, democracy, the rule of law andrespect for human rights. For there can be no long-term security without development, and no long-termdevelopment without security. And both have to berooted in the rule of law and respect for human rights.Events of the last year have underlined this message,which is understood by citizens in Africa and aroundthe world.Times are uncertain. But what is increasingly evidentis that Africa is on its way to becoming a preferredinvestment destination, a potential pole of globalgrowth, and a place of immense innovation andcreativity. If we respond with courage and in the rightway, building on the continent’s many successes,African societies will become more prosperous, fairand equal. This is a prize which we all, wherever welive, will share.Kofi A. Annan
  • 8AFRICA PROGRESS REPORT 2012Commentary on Africa has suffered from extrememood swings, with the pendulum moving fromepisodes of pessimism to bouts of euphoria. Twelveyears ago, The Economist wrote off Africa, describingit as “the hopeless continent”1. That assessment wasnot atypical. After a decade of slow economicgrowth and even slower human development in the1990s, few observers saw a bright future. How timeschange. Last year, The Economist ran with a verydifferent cover headline: “Africa rising: the hopefulcontinent”2. According to the title of one widelycited report, Africa has now become a continent ofeconomic “lions on the move,”3blazing a pathwayto prosperity. The commentariat spotlight, to quotea few more reports, is now fixed on Africa’s “risingmiddle class,”4the “dynamic African consumermarket”5and “growth opportunities for investors”6.The extreme pessimism surrounding Africa a decadeago was unwarranted. So, too, is the current wave ofblinkered optimism. Real gains have been made, butgovernments and their development partners needto reflect on the weaknesses, as well as the strengths,of the recent record – and assess both the risks andthe opportunities that lie ahead.A mixed balance sheetAfrica’s economies are consistently growing fasterthan those of almost any other region – and attwice the rate of the 1990s7. Improved economicmanagement has contributed to the growth surge.Exports are booming and export markets havebecome more diversified. Foreign direct investmenthas increased by a factor of six over the pastdecade. Private entrepreneurs have emerged as adynamic force for change, driving innovation andtransforming outdated business models. There isan emergent middle class, although its size is oftenexaggerated. For the first time in over a generation,the number of people living in poverty has fallen.Fewer children are dying before their fifth birthdayand more are getting into school. Young and not-so-young Africans are embracing new technologiesthat provide information, expand opportunities andconnect people to one another and to the outsideworld. There have been setbacks and episodes ofpolitical violence, but democracy is growing deeperroots. Governance standards are improving.Yet there is another side to the balance sheet.Countries across Africa are becoming richer butwhole sections of society are being left behind. Aftera decade of buoyant growth, almost half of Africansstill live on less than $1.25 a day8. Wealth disparitiesare increasingly visible. The current pattern of trickle-down growth is leaving too many people in poverty,too many children hungry and too many youngpeople without jobs. Governments are failing toconvert the rising tide of wealth into opportunitiesfor their most marginalised citizens. Unequal accessto health, education, water and sanitation isreinforcing wider inequalities. Smallholder agriculturehas not been part of the growth surge, leaving ruralpopulations trapped in poverty and vulnerability.The deep, persistent and enduring inequalitiesin evidence across Africa have consequences.They weaken the bonds of trust and solidarity thathold societies together. Over the long run, theywill undermine economic growth, productivityand the development of markets. They weakenconfidence in governments and institutions. Andthey leave many Africans feeling that their societiesare fundamentally unjust and their governmentsunresponsive. Economic growth alone is not enough.In this year’s report, we look at three of the most criticalingredients for transforming a promising economicupturn into a sustained recovery and lasting humandevelopment – jobs, justice and equity. We highlightjobs because livelihoods play such a fundamentalrole in people’s life-chances – and because Africaurgently needs to create jobs for a growing youthpopulation. We highlight justice and equity becausethey are missing from the lives of too many Africans,making the present growth socially unsustainable.Introduction
  • 9Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeA growing demand for equityand justiceWe live in a world of rapid and unpredictabletransformations. Changes in demography andhuman geography are re-making societies, notleast in Africa. Climate change is interacting withother pressures to reconfigure agricultural markets.Economic power is gravitating from West to East andNorth to South. The pace of technological innovationis accelerating and the face of social protest ischanging.The Arab revolutions of 2011 caught the world bysurprise, as social movements challenged andtoppled autocratic rulers across North Africa, theMiddle East and the Arabian Peninsula. In Europeand the United States, the financial crisis hasspawned new forms of social protest. In India, a masssocial movement is demanding action to combatcorruption. Villagers in a remote area of southernChina successfully mobilised against autocraticofficials responsible for overseeing land grabs. Ashared sense of frustration and discontent withunresponsive governments, inequality and injusticelinks these movements.Africa is not immune to the economic and politicalcurrents that are reconfiguring globalisation. Itsleaders need to find a place in the global economicgovernance architecture of a multipolar world.Africa’s own demography and human geographyare changing. Failure to create jobs and opportunityfor a growing and increasingly urbanised andeducated youth population would have catastrophicconsequences, socially, economically and politically.Having played a minimal role in creating dangerousclimate change, Africa’s farmers face some of thegravest risks. And the Arab Spring has not goneunnoticed by Africa’s youth. The circumstances maybe different, but young people in Africa also careabout jobs, justice and equality – and governmentsignore them at their peril.
  • 10ECONomicsuccesssocialsuccesspoliticalsuccessafricaN countries are toppingthe list of fastest growingeconomies Annual average GDP growth, %Source: The Economist, 2011 (IMF data).fdi to africa is alsoincreasing605040302010-10-202002 2003 2004 2005 2006 2007 2008 2009 20100Other FDI Portfolio* Total$billions*Portfolioinvestmentisthecategoryofinternationalinvestmentthatcoversinvestmentinequityanddebtsecurities,excludinganysuchinstrumentsthatareclassiedasdirectinvestmentorreserveassets.Source: IMF, 2011.1970s654321980s 1990s 2000s 2011-15Asian countries African countriesafrica’s gdp growth is steadilyon the rise*Source: The Economist, 2011 (IMF data).Poverty ratingSierra LeoneSenegalGabonKenya MaliEgyptGhanaGDP per capita (PPP)poverty is decliningdemocracy is spreadingthe number of elections is upMORE CHILDREN ARE GOING TOSCHOOLoverall governance isimprovinghiv incidence rates havedroppedthe political empowerment ofwomen is growingPovertyrating(shareofpopulationbelow$1aday)GDPpercapita(dollars)1980 1987 1994 2001 2008300050%00%180030%240040%60010%120020%2000 2002 2004 2006 2008 2010706050403048334953576254514854535766612010 2011051015202530Numberofpresidentialelections159Source: APPto 2009FROM 2001Source: UNAIDS 2010hiv incidence ratedroppedmore than25%in 22countries ofsub-saharanafrica2female presidentsRwandaleading globallyin femaleparlamentarianparticipationA new generation of youngafrican women withpoweris rising2africannobel peace prizewinners82million children enrolled inprimary education in 1999124million children enrolled inprimary education in 20072001-2010 2011-2015Angola 11.1 China 9.5China 10.5 India 8.2Myanmar 10.3 Ethiopia 8.1Niger 8.9 Mozambique 7.7Ethiopia 8.4 Tanzania 7.2Kazakhstan 8.2 Vietnam 7.2Chad 7.9 Congo 7.0Mozambique 7.9 Ghana 7.0Cambodia 7.7 Zambia 6.9Rwanda 7.6 Nigeria 6.8Source: Pinkovskiy, MIT, Sala-i-Martin, Columbia University and NBER,2010.Data Source: IFES Election Guide and EISA websites.Source: Mo Ibrahim Index, 2010.Source: UNESCO, 2010.* Excluding countries with less than 10m population, Iraq and AfghanistanAFRICA: SUCCESSES AND SETBACKSFigure 1:
  • 11ECONomicsetbackssocialsetbackspoliticalsetbacksResource-Rich countries relytoo much on volatile revenueflowsSource: African Economic Outlook 2012*“Labourproductivity”referstoGDPin2005PPPUS$perpersonemployed.Oreandmetalexportersreferstocountriesinwhichoreandmetalexportsaccountedforatleast50percentofallmerchandiseexportsin2005.Oilexportersreferstocountriesinwhichfuelexportsaccountedforatleast50percentofallmerchandiseexports.ExportdataarefromWorldBank,AfricanDevelopmentIndicatorsLabour productivity* growthin SSA by export structure1992-2009Other countries in Sub-Saharan AfricaOre and metal exportersResource taxesOil exportersOil priceMali Niger EthiopiaRichest 20%Poorest 20%Zambia Mozambiqueillicit financial flows aretaking a toll on economicdevelopmentSURVIVAL rate BY GRADE OFPRIMARY EDUCATION 2008national averages concealstriking inequalitiesmaternal mortality remainsunacceptably highSource: UNESCO, 2011. Source: UNESCO, 2010. Source: WHO, World Bank, Unicef and UNFPA (2010) and The Lancet (2011).Lifetime risk of maternal death **The MMR and lifetime risk have been rounded according to the followingscheme: <100, no rounding; 100–999, rounded to nearest 10; and >1000,rounded to nearest 100.The numbers of maternal deaths have been roundedas follows: <100, no rounding; 100–999 rounded to nearest 10; 1000–9999,rounded to nearest 100; and >10 000, rounded to nearest 1000.Source: Global Financial Integrity, 2009.Illicit flows create a shadow financial systemthat“drains hard currency reserves, heightensinflation, reduces tax collection, cancelsinvestment, and undermines free trade.”8%4%-4%-8%1992 1996 2000 2004 2008 2007 2008 20100%19961209060302000 2004 2008 201202048160%GDPOilprice($perbarrel)1100806040202 3 4 5 6Source: ILO, 2011.SurvivalrateGrade0still a long way to go tosecure gender equality atlegal and political levelsgood governance ishampered by corruptionelectoral Processes aredelicateSource: APP with data from IMF, Africa Economic Outlook, Social Indicators, World Bank, Transparency InternationalSource: USIP, 2010. Source: Transparency International, 2011. Source: UNWOMEN Websiteto 2008FROM 19701.8trillion USDare estimated tohave been lostto illicit flowsBetween 19 and 25 per cent of elections inAfrica are affected by violence.All Sub-Saharan countries with theexception of Botswana, Cape Verde,Mauritius and Rwanda (which score over 5on the CPI index) rank in the lower half of the2011 Corruption Perception Index)On average, Nigerian children receive close to 7years of education. The richest 20% school foralmost 10 years (more like Cuba or Bolivia) whilethe poorest 20% don’t even complete 4 years ofeducation which is closer to the national averageof Chad.Urban/rural and boy/girl differences are alsostrikingPost conflict countries fare better in legaland constitutional protection for women’spolitical participation.57.5102.50CPIindex19-25%average number ofyears of education BOY GIRLUrban 6.5 11 6 9.5rural 4 10 2.5 9South Africa 1 in 100Women’s representation inparliament14% 27%Constitution includesanti-discrimination clause on gender61% 93%Constitution mentionsviolence against women10% 21%Gender-responsivebudgeting initiative39% 50%Non-Post-ConflictPost-ConflictLiberia1 in 141 in 20AFRICAASIA1 in 361 in 230EUROPE 1 in 4 200Chad and Somalia
  • 12AFRICA PROGRESS REPORT 2012
  • PART IAFRICA RISING –BUT WHILE SOMEAFRICANS ARE RISING,OTHERS ARE NOTAfrica in 2012 has an unprecedented opportunity to set acourse for sustained economic growth, shared prosperityand a breakthrough in poverty reduction. But this journeywill not happen without determined action and crucialchanges to make growth much more equitable.
  • 14AFRICA PROGRESS REPORT 2012In the world economic growth league, Africa hasmoved from the lower echelons to the premierdivision. After a downturn in 2008, recovery fromthe global economic crisis has continued (Figure 2).Some of the fastest-growing economies in the worldare in Africa (Figure 3). Seven in every 10 peoplein the region live in countries that have averagedeconomic growth rates in excess of 4 per centfor the past decade. From 2005 to 2009, Ethiopiarecorded higher growth than China, and Ugandaoutperformed India9. In 1996, there were 13 countrieswith inflation rates above 20 per cent; since the mid-2000s, there have been no more than two. Much ofthis growth and rebound is due to improved policies.Box 1 outlines regional patterns of economic growth.1. Economic growthmoving to the premierleagueFigure 2: Growth rates of African GDP, 2000–2013Sub-Saharan AfricaPercentgrowthinGDP2000 2004 20082002 2006 20102001 2005 20092003 2007 2011 201320120.01.06.02.07.03.04.05.08.0Pre-crisis average Sub- Saharan Africa excluding South AfricaSource:WorldBankAfrica’sPulse,2011Figure 3: Fastest-growing African economies in 2011GrowthrateSource:WorldBankAfrica’sPulse,20110212414681016GhanaIndiaBotswanaChinaMozambiqueDem.Rep.ofCongoTanzaniaCongoNigeriaZimbabweBrazilEthiopiaRwandaAngolaRussia
  • 15Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeBOX 1: Across Sub-Saharan Africa: strong but uneven growthThe economic picture within Sub-Saharan Africa is highly varied. Despite the effects of drought and faminein 2011, East Africa grew at a rate of 5.8 per cent in 2011, as sustained public investment in infrastructure(Ethiopia and Tanzania), rising mining output (Tanzania), increased foreign investment in energy (Uganda)and higher agricultural output (Ethiopia) supported recovery.In West Africa, economic growth slowed from 6.9 per cent in 2010 to 5.6 per cent in 2011. This was largelybecause Côte d’Ivoire’s economy contracted by 0.4 per cent after post-election violence and a collapseof exports and the financial sector, but a solid process of recovery started as soon as the political situationnormalised. Lower oil production by Nigeria also contributed to the slowdown. Faster growth in Ghana (12.2per cent), boosted by the start of commercial oil exploitation and strong growth in agriculture, mining andservices, counterbalanced the regional picture.Central Africa’s economic activity remained robust although average GDP growth declined from 5.2 percent in 2010 to 4.2 per cent in 2011. Growth was underpinned by public investment in infrastructure, thestrong performance of service sectors, and increased timber exports. The overall performance covered alacklustre showing by Chad, where oil production declined because of labour disputes and remittances fellwhen many Chadians in Libya lost their jobs at the outbreak of conflict.In Southern Africa, output expanded by 3.8 per cent in 2011, up from 3.5 per cent in 2010, with considerablevariations. South Africa recovered slowly, with growth of 3.1 per cent in 2011, up only slightly from 2.8 percent in 2010. Performance was lifted by a recovery in consumer spending, fuelled in turn by cheap creditand low inflation. Many other countries, however, achieved solid growth. Botswana, Mozambique andZambia posted growth rates above 6 per cent, reflecting rising mining output and strong global demandfor minerals (as well as a bumper harvest in Zambia). Increased oil output and investment in Angola and animproved political and economic climate in Zimbabwe pushed growth in both countries over 4.0 per cent.Africa’s economic prospects remain promising.Growth in Sub-Saharan Africa is expected torecover to 5.3 per cent in 2012 and 5.6 per cent in201310, underpinned by strong export demand, risingcommodity prices and firm domestic demand, andbuttressed by government infrastructure spending.It is not just the headline numbers that are impressive.GDP per capita is also rising. Growth is more diversified,more resilient – and in some countries less dependenton exports of primary commodities. Revenues fromnatural resources account for no more than one-third of Africa’s growth over the past decade. Whilethe price boom in global commodities has certainlycontributed to Africa’s recovery and the regionalterms of trade improved sharply in 2010 and 2011,domestic consumer markets are also growing andAfrica’s private sector is an increasingly powerfulengine for growth.Export diversification has also played a vital role insupporting strong growth. Before 2000, Africa’s fortuneswere strongly tied to those of Europe and the UnitedStates. These are still critically important markets. Butdeepening ties with Brazil, Russia, India and China– the BRICs – as well as Gulf countries and Turkey,helped first to insulate Africa partially from the globaleconomic downturn, and then to drive recovery. Thebulk of the “BRIC effect” has operated through trade(see Part II, Section 3). But the economic linkages gobeyond trade. Chinese foreign direct investment intoAfrica has grown rapidly over the past decade.
  • 16AFRICA PROGRESS REPORT 2012Economic recovery has been accompaniedby accelerated progress towards most of theMillennium Development Goal (MDG) targets. Africahas started to turn the corner on reducing poverty.Between 1999 and 2008, the last year for which data isavailable, the share of Africans living on less than $1.25a day fell from 58 to 48 per cent. More encouragingstill, the rate at which poverty is falling appears tohave gathered pace. The World Bank’s most recentestimates suggest that the number of poor peoplein the Sub-Sahara region fell by around nine millionbetween 2005 and 200811.Other social indicators have also improved.Compared with a decade ago, Africa’s children areless likely to die before their fifth birthday, women areless likely to die from complications of pregnancy orduring childbirth, and more children are getting intoschool. The average annual rate of reduction in under-five mortality has accelerated, doubling between1990–2000 and 2000–201012. Measured by the rate ofreduction, 6 of the 14 best-performing countries in theworld – including Ethiopia, Ghana, Malawi and Niger –are in Africa. The number of out-of-school children hasfallen by 13 million.The overall record on poverty, however, does notmatch Africa’s economic growth. There are still 386million Africans struggling to survive on less than$1.25 a day and Africa accounts for a rising shareof world poverty. At the start of its growth surgein 1999, Africa accounted for 21 per cent of theworld’s poverty. By 2008, that share had reached29 per cent. And while much has been made of thegrowth of Africa’s middle class, this group remainssmall (Box 2).Some of the countries with the strongest economicgrowth have a mixed record on reducing poverty.In Mozambique, for example, household surveyevidence showed no decrease in national povertyfrom 2002 to 2008 and in the Central regions there wasa marked increase in poverty13. Tanzania has beenone of the world’s fastest-growing economies. Yetfrom 2000 to 2007 income poverty fell only from 35 to33 per cent, according to household budget surveys.Taking into account population growth, this amountsto an additional one million Tanzanians living belowthe poverty line. Economic growth reduced povertyin Africa, but less than might have been anticipated,with Africa’s poor receiving too small a slice of theexpanding wealth cake.Africa’s wealth disparities are among the biggest inthe world. One widely used measure of inequality, theGini index, captures the concentration of householdincome or expenditure (the higher the index, thegreater the inequality). In China, where politicalleaders have identified rising inequality as a threat tosocial stability and future growth, the Gini index is 42.There are 24 countries in Africa with higher inequalityscores than China. In Mozambique, Kenya andZambia, the Gini index is between 45 and 55, while inBotswana and South Africa it is over 6014.The poorest 20 per cent in Sub-Saharan Africa typicallyreceive 6 per cent or less of national income; and thepoorest 40 per cent in most cases receive less than15 per cent (Figure 6). In many countries, the patternof economic growth is reinforcing these inequalities.One recent poverty assessment for Lesotho, which hasone of the world’s highest levels of income inequality,concluded: “The main reason for the high poverty rateis not slow economic growth but high inequality.”15That verdict has a far wider application in Africa.2. The record onpovertyconstrained by inequality
  • 17Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeBOX 2: Rising slowly – an African middle classAs even a brief visit to any major African city confirms, retail sectors and higher-income housing markets arebooming. According to the World Bank, economic growth “is creating an emerging African middle class ofhundreds of millions of consumers.”16The African Development Bank claims that one-third of Africans arealready middle class. Major consultancy firms like McKinsey and Accenture have also celebrated the rise ofmiddle-class consumer markets in Africa17.Such conclusions are premature. After a decade of high growth, almost half of all Africans still live belowthe $1.25 a day poverty line. Another 30 per cent – 246 million people – live in the poverty grey area, onbetween $1.25 and $2.50 a day. Only 4 per cent of Africans have an income in excess of $10 a day (Figure4). In other words, the vast majority of what commentators describe as Africa’s middle class has eithermoved just across the $1.25 threshold, or is living well within the gravitational pull of the poverty zone.Analytical work by the Brookings Institution provides another view. Using a range of $10–$100 per day formembership of a “global middle class,”18Brookings finds that Africa accounts for just 2 per cent of theworld’s middle-class population, and 1 per cent of purchasing power.Number of people in the middle class (million)Sub-Saharan AfricaCentral and South AmericaMiddle East and North AfricaNorth AmericaAsia PacificEurope201220020 500 1 000 1 500 2 000 2 500Figure 4: Africa’s small middle-class** Middle class defined as$10-$100 Purchasing PowerParity (PPP)Source:BrookingsInstitution.
  • 18AFRICA PROGRESS REPORT 2012BOX 3: The eurozone crisis is harming many African economiesThe sovereign debt crisis in the euro area resulted in a global economic slowdown in 2011 that is likely toharm African economies in several ways should it continue in 2012 and beyond. However, the eurozonecrisis also creates some opportunities. The 14 countries that use the CFA franc, which is pegged to theeuro, have experienced significant depreciation of their currency, making their exports more competitivein global markets.Europe has traditionally been Africa’s most important export destination and source of capital, so tradeis expected to be the most significant channel of harm from the debt crisis. Africa may also receive lessforeign direct investment (FDI) from the EU and other parts of the world in the short term, but it has recentlydiversified its sources of FDI, which may mitigate the worst effects of the eurozone crisis. For example, China’sFDI to Africa reached about 7.5 per cent of the continent’s total receipts in 2008.The eurozone crisis is expected to have significant effects on official development assistance (ODA) toAfrica because the EU is the largest aid provider to the continent. A few countries, including France andItaly, have already reduced bilateral assistance to Africa because of the global economic crisis. Theexpected slowdown of ODA to Africa could put pressure on social sectors, especially health, education andpopulation programmes as well as water and sanitation, undermining poverty reduction efforts, especiallyin low-income and fragile states.The lesson to be drawn is not that growth is unimportant.The challenge is to harness economic growth to amore equitable distribution of opportunity and income.Meeting this challenge requires public policy actionon two fronts. First, governments need to mobiliserevenues from growth and invest those revenues inthe basic services and economic infrastructure thatoffer poor people greater opportunities (see Part V).Second, governments need to foster an environmentthat enables the creation of jobs and more resilientlivelihoods, so that poor people can contribute toeconomic growth, “produce” their way out of povertyand secure a greater share of the benefits from growth.The two goals of growth and equity are not mutuallyexclusive. The central objective should be economicgrowth that increases equity and creates jobs.Indeed, a wealth of evidence is now showing thatgreater equity can boost growth and strengthenthe rate at which growth converts into less poverty.Conversely, high levels of inequality act as a brakeon growth, limiting the potential for development ofmarkets and investment.The recent experience of Rwanda is instructive. The2011 Household Living Conditions Survey documentsa triple win of high growth in income, falling inequalityand a steep decline in poverty19. From 2005 to2010, average incomes rose from US$333 to US$540,inequality fell (the Gini coefficient dropped from0.52 to 0.49) and poverty declined from 57 to 45per cent, resulting in one million people lifted outof poverty20. African governments might also lookto wider international experience. The country withmost-reduced poverty since 2000 is Brazil – and here,too, success has been built on strong growth andimproved income distribution. Inequality constrainspoverty reduction, and, as highlighted later in thissection, social disparities are also acting as a brakeon progress toward other MDGs.
  • 1919INEQUALITY: CHANCES TO SURVIVEBIRTH AND EARLY CHILDHOODInequality begins before birth. Access to basic healthcare and thechances to survive past the age of five vary from country to country. Butinequality is even more striking within countries themselves - between therichest and the poorest and between the urban and the rural.UUrbanRRuralHRichest 20%LPoorest 20%Source:APPwithdatafromtheDemographicandHealthSurveys(DHS).Kenya(DHS2008-09);Mali(DHS2006);Nigeria(DHS2008);andZambia(DHS2007).Note: Please note that the data presented here is strictly as provided in the DHS Survey and corresponds to different surveys taken in different years.INEQUALITY: CHANCESTO SURVIVE BIRTH AND EARLY CHILDHOODCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.KenyaSource: APP with data from the Demographic and Health Surveys (DHS). Kenya (DHS2008-09); Mali (DHS 2006); Nigeria (DHS 2008); and Zambia(DHS 2007).Note: Please note that the data presented here is strictly as provided in the DHS Survey and corresponds to different surveys taken in different years.Inequality begins before birth. Access to basic healthcare and the chances to survive past the age and of five vary from country to country.But inequality is even more striking within countries themselves - between the richest and the poorest and between the urban and the rural.Infant mortality(per 1000 live births) Chance of not receivingcomplete vaccinationsBeforebirthBirthNotSurvivingpast1Stayinghealthy CHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.NigeriaBeforebirthBirthNotSurvivingpast1Stayinghealthy12%3%47%71%2%3%9%14%75%40%92%21%64% 25%80% 19%635957669967955884%63%95% 47%37%30%39% 30%Chance of not being deliveredin a health facilityCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.MaliBeforebirthBirthNotSurvivingpast1Stayinghealthy13%7%34%37%65%20%68%15%831228012447%54%51% 44%ZambiaUUrbanRRuralHRichest 20%LPoorest 20%LegendCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.BeforebirthBirthNotSurvivingpast1Stayinghealthy1%2%3%4%68%20%72% 8%6980827434%29%29%22%Infant mortality(per 1000 live births)Chance of not receivingcomplete vaccinationsPer cent of births that received no antenatalcare in the 3 years prior to surveyPer cent of births that received no antenatalcare in the 3 years prior to surveyPer cent of births that received no antenatalcare in the 3 years prior to surveyInfant mortality(per 1000 live births)Chance of not receivingcomplete vaccinationsChance of not being deliveredin a health facilityInfant mortality(per 1000 live births) Chance of not receivingcomplete vaccinationsChance of not being deliveredin a health facilityPer cent of births that received no antenatalcare in the 3 years prior to surveyChance of not being deliveredin a health facilityINEQUALITY: CHANCESTO SURVIVE BIRTH AND EARLY CHILDHOODCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.KenyaSource: APP with data from the Demographic and Health Surveys (DHS). Kenya (DHS2008-09); Mali (DHS 2006); Nigeria (DHS 2008); and Zambia(DHS 2007).Note: Please note that the data presented here is strictly as provided in the DHS Survey and corresponds to different surveys taken in different years.Inequality begins before birth. Access to basic healthcare and the chances to survive past the age and of five vary from country to country.But inequality is even more striking within countries themselves - between the richest and the poorest and between the urban and the rural.Infant mortality(per 1000 live births) Chance of not receivingcomplete vaccinationsBeforebirthBirthNotSurvivingpast1StayinghealthyCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.NigeriaBeforebirthBirthNotSurvivingpast1Stayinghealthy12%3%47%71%2%3%9%14%75%40%92%21%64% 25%80% 19%635957669967955884%63%95% 47%37%30%39% 30%Chance of not being deliveredin a health facilityCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.MaliBeforebirthBirthNotSurvivingpast1Stayinghealthy13%7%34%37%65%20%68%15%831228012447%54%51% 44%ZambiaUUrbanRRuralHRichest 20%LPoorest 20%LegendCHILDHOODTIMELINEOFOPPORTUNITYGestation0 yrs.2 yrs.3 yrs.0-1 year4 yrs.0-5 years1 yr.5 yrs.BeforebirthBirthNotSurvivingpast1Stayinghealthy1%2%3%4%68%20%72% 8%6980827434%29%29%22%Infant mortality(per 1000 live births)Chance of not receivingcomplete vaccinationsPer cent of births that received no antenatalcare in the 3 years prior to surveyPer cent of births that received no antenatalcare in the 3 years prior to surveyPer cent of births that received no antenatalcare in the 3 years prior to surveyInfant mortality(per 1000 live births)Chance of not receivingcomplete vaccinationsChance of not being deliveredin a health facilityInfant mortality(per 1000 live births) Chance of not receivingcomplete vaccinationsChance of not being deliveredin a health facilityPer cent of births that received no antenatalcare in the 3 years prior to surveyChance of not being deliveredin a health facilityFigure 5:
  • 20AFRICA PROGRESS REPORT 2012Employment is the engine of social development. Itis through their jobs that people generate income,plan for the future, and contribute to wealth creation,social cohesion and share in national prosperity21.Economic growth in Africa is creating employment, butnot on the required scale. As demographic pressuresmount, it is imperative that governments across Africadevelop more employment-intensive patterns ofgrowth at higher levels of skills and productivity.Every year, 8 million to 10 million young Africans makethe difficult transition from school to work. While youthunemployment is a concern, African participationrates in the labour market are among the highestin the world. This is for the simple reason that, in theabsence of functioning social welfare systems,young people have no alternative but to work.Not that employment is an automatic escape frompoverty. Most Africans work in insecure, low-wageand often hazardous employment, with no prospectof developing their skills. In Nigeria, Mozambiqueand Burundi, for example, over 60 per cent of youngpeople in employment earn less than $1.25 a day.Employmentcreationintheformalsectorfallsfarbelowthe level required to absorb new market entrants.Moreover, most new entrants lack the skills they needto enter firms operating at higher levels of productivityand wages. As a result, the overwhelming majority ofyoung people are destined for employment on farms,rural enterprises or in the informal sector.Despite growth, labour marketsremain informalAfrica’s decade of growth has done little to alterunderlying labour market conditions. Agriculturestill accounts for almost two-thirds of livelihoods.Across most of the region, livelihoods are dominatedby smallholder farming, off-farm employment in ruralareas, and informal-sector enterprises, includinghousehold businesses and micro-enterprise. Smallcompanies and the informal sectors dominatemanufacturing. In Ethiopia, for example, only 5 percent of people engaged in manufacturing activitieswork in firms with 10 or more employees.To make progress, governments need to providethe conditions that enable formal-sector wageemployment, predominately in the private sector,to grow rapidly. Even in fast-growing economies likeGhana, Rwanda, Tanzania and Uganda, formal-sector employment is starting from such a low basethat it has failed to keep pace with the growth of newentrants to the workforce. In Uganda, waged jobsgrew at 13 per cent a year between 2003 and 2006,but this absorbed less than one in five of new labour-market entrants.As estimates by the World Bank underline, even onthe most optimistic assumptions about the growthrate of wage jobs, the majority of Africans will remainin informal jobs until well after 2020. Given Africa’sunderlying demography, the structural transformationto a labour market dominated by private wageemployment will take several decades. While moremust be done to facilitate the growth of private wageemployment, this should not divert attention fromthree key sectors for labour-intensive growth:• smallholder agriculture and the scope for raisingproductivity and employment through a GreenRevolution (we highlight the critical role ofagriculture in Part II);• rural household enterprise, which represents thefastest-growing livelihood sector in most low-income countries;• the urban informal sector, which will need toabsorb a growing share of Africa’s young peopleas human geography changes.Strategies for promoting formalprivate-sector employmentSmall firms are at the heart of private-sector jobcreation. In Ghana, for example, the overwhelmingmajority of new jobs have been created in newfirms rather than through the expansion of existingenterprises22. These new jobs have reduced povertybecause they successfully employed the skills of poorpeople23. The jobs created in small firms have beenmore pro-poor than many programmes in the pastthat have relied on a top-down development of acapital-intensive formal sector.3. Looking for workthe employment challengeCreating jobs:Sectors for labour-intensive growth1 private wage employment2 smallholder agriculture3 rural household enterprises4 informal sector
  • 21Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangePolicy makers need to create an environment wheresmall and medium-scale businesses can flourish toallow them be competitive in domestic and globalmarkets. This requires attention to everything fromimproving physical infrastructure (estimates by theAfrican Development Bank suggest that a shortageof infrastructure reduces business productivityin Sub-Saharan Africa by approximately 40 percent24), access to finance (research shows thatthe availability of local banks leads to fastergrowth of small and medium-size firms and moreinvestment, for example in Morocco25), appropriatetax policies, transparent and fair procedures fordispute settlement, and removal of unnecessary(and often illegal) barriers to the movement ofgoods within and across jurisdictions. We noteelsewhere the importance of both further regionaleconomic integration in Africa and of policies inAfrica’s main trading partners that can facilitateAfrica’s development as an exporter of processedand manufactured goods, and the need to createan environment where foreign firms want to setup operations to exploit the abundance of under-employed labour in Africa.Off-farm enterprise –a growth pole for jobsIn South Asia and East Asia, off-farm householdenterprises have played a central part in creatingopportunities for investment and employment.Yet African governments – and aid donors – havetended to neglect the sector. Evidence from Ugandaillustrates why the neglect is misplaced. Over thepast two decades, Uganda’s record on economicgrowth and poverty reduction has been impressive– including achieving the MDG target of halvingextreme poverty. While farming remains a source ofincome for 77 per cent of households in Uganda, by2009/10 about 40 per cent of rural households wereoperating a non-farm enterprise, compared with 24per cent in 1992/93. Rural poverty in Uganda fell from60 per cent in 1992 to 27 per cent in 2009/10, withthe poverty rate among households with an off-farmenterprise 6 percentage points lower than amongthose without26.Uganda’s growth has been driven from below, assmallholders facing a shortage of land have soughtopportunities for investment in newly liberalisedmarkets. However, non-farm enterprises barely figurein Uganda’s economic development strategy, exceptas a source of revenue from licence fees. The growthof very small, informal enterprises operating beyondthe farm has played a pivotal role in employmentcreation and poverty reduction. The same is trueof other countries. Depending on the underlyingpattern of economic growth, 30–60 per cent of ruralhouseholds in Africa operate some form of off-farmenterprise.Too often, household enterprises are seen as irrelevanton the contentious grounds that they make a weakcontribution to government revenues, operate atlow levels of technology and have low levels ofproductivity. While productivity levels are low inmany cases, that is a case for raising productivity –not for neglect. There is considerable potential forbuilding linkages between household enterprises andhigher value-chains in production and distribution,as illustrated by the practices of mobile phonecompanies operating through petty traders.The urban informal sectorHousehold businesses in the urban informal sectorface many of the same problems as those inrural areas. With limited capital and restricted accessto new technologies, these enterprises face majorbarriers to growth. Evidence from countries suchas Ghana, Kenya and Tanzania shows that smallcompanies have a far higher rate of failure thanlarge ones. Yet, they are a source of employment.In Ghana, the overwhelming majority of new jobshas been created in the small businesses that haveemerged with economic growth.Viewed through the prism of employment markets,jobs created in the informal sector do more toreduce poverty than those in the formal wage sectorbecause they create demand for relatively unskilledlabour. Moreover, it is sometimes forgotten that mostyoung people entering employment markets receivetraining not through formal government institutions,or through large companies, but through on-the-job apprenticeships and training with experiencedcraftspeople.Across the region, governments and their partnersdiscuss how best to create formal-sector jobs athigher levels of wages and productivity, overlookingwhere most Africans are starting from in terms ofeducation levels and employment opportunities.Looking to the future, Africa needs to develop througheducation the skills and capabilities that hold the keyto increased productivity. But looking to the future isnot a substitute for policies that can help to generateemployment today.
  • 22AFRICA PROGRESS REPORT 2012As the 2015 deadline for achieving the MillenniumDevelopment Goals (MDGs) approaches,governments, non-government organisations, UNagencies and others are turning their attention to thepost-2015 agenda. Dialogue on this issue is criticalso that the international community can build onthe momentum of the past decade. But it shouldnot deflect political attention from the importanceof honouring the MDG pledge to create a moreequitable world. Governments need to focus on theunfinished business in hand. Failure to accelerateprogress towards the MDGs would diminish thecredibility of any post-2015 commitments. That is whyAfrica’s governments and their development partnersshould initiate as a matter of urgency a “big push”towards the 2015 goals, starting this year. Not everycountry in Africa can reach every target – but everycountry can go further and faster.This year’s report does not provide a detailed goal-by-goal assessment of where Africa stands. Instead, welook at some of the major challenges to be addressed.There have been some remarkable achievements.Many countries have registered advances thatwould have been unimaginable a decade ago.Such achievements demonstrate what is possiblewhen good policies combine with effective politicalleadership and consistent international partnerships.At the same time, it is vital to reflect on how muchfurther there is to go – because the ultimate test ofperformance is how close we get to the 2015 targets.Poverty and inequalityProgress towards the twin goal of halving extremepoverty and hunger reflects the mixed MDGrecord of the past decade. It also draws attention toa concern that has received insufficient attention: thevery large data gaps that weaken MDG reporting.Household survey evidence suggests that somecountries – such as Kenya and Tanzania – havereduced poverty only modestly, despite the strongeconomic growth reported in national incomeaccounts. Other countries – including Ethiopia andSenegal – have a stronger track record. The evidencefrom Rwanda illustrates that a combination of robusteconomic growth and reduced inequalities canact as a powerful accelerant for poverty reduction.However, the trends in Nigeria, the country withAfrica’s largest population, are unclear: two-thirdsof Nigerians are estimated to live below the povertyline. Sometimes the weak trickle-down effect helpsto explain extreme income disparities. In Nigeria, thepoorest 20 per cent receive only 4 per cent of nationalincome, while the wealthiest 20 per cent receive 53per cent.4. Unjust disparitiesa brake on progresstowards the MDGs
  • 23Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeThe evidence base for tracking poverty and inequalityremains partial and incomplete. Only 18 of the 42countries covered in World Bank estimates have surveydata available from 2007 or beyond – and 30 per centof the region’s population is not covered in the 2008estimate. Researchers at the Brookings Institution havepointed out that while 43 of 49 Sub-Saharan Africancountries have at least one household survey, halfwere carried out more than six years ago27. Moreover,a lack of comparability across surveys makes anyattempt at tracking trends or making comparisonsacross countries a hazardous exercise. Even withthe high level of technical expertise that the LivingStandard Measurement Survey team of the WorldBank brings to poverty analysis, the quality andcoverage of the data create large margins of error.Another concern is that the bundle of goods coveredin consumption surveys may not reflect the changingconsumption patterns of poor households. This mayhelp to explain the very large discrepancy in povertyestimates based on household surveys and nationalincome accounts.Uncertainties of such magnitude have consequencesfor policymakers. Effective anti-poverty policieshave to be built on a clear picture of the numbersaffected, the depth of poverty, and shifts in thenational poverty profile. That is why in Latin America,partnerships between governments, the Inter-American Development Bank, and the UN’s EconomicCommission for Latin America and the Caribbean(ECLAC) sought with some success to improve boththe quality and timeliness of household surveys. Similarpartnerships are urgently needed in Africa as well aselsewhere.Weak progress on hungerProgress on hunger has fallen disturbingly short ofthe 2015 target. From 1990–1992 to 2006–2008, theestimated prevalence of undernourishment in Africafell only from 31 to 27 per cent. Progress on reducingchildhood malnutrition has been painfully slow. Overa period of two decades to 2009, the proportion ofchildren registered as underweight fell from 27 to 22per cent. The best available evidence also points tominimal progress on stunting. An estimated 35 percent of Africa’s children are stunted (short for theirage). That figure is worrying for many reasons, not leastbecause malnutrition is associated with over one-thirdof child deaths. Moreover, stunting by the age of twoyears appears to be largely irreversible.Figure 6: Income inequalityIncome or consumption share by deciles (%)Côte d’IvoirePoorest 10%2.23%14.216.119.418.921.820.311.710.515.429.844.231.75%32.75%37.99%36.73%38.23%43.22%30.14%51.69%29.61%36.1%43.14%2.03%1.96%1.94%1.75%2.13%2.54%1.17%2.82%2.35%1.45%Richest 10% Rich/Poor RatioGhanaKenyaMozambiqueNigeriaRwandaSenegalSouth AfricaTanzaniaUgandaZambiaDatasource:PovcalNet:theon-linetoolforpovertymeasurementdevelopedbytheDevelopmentResearchGroupoftheWorldBank,http://iresearch.worldbank.org
  • 24AFRICA PROGRESS REPORT 2012Despite the dismal picture on malnutrition, there aresome success stories. Both Ghana and Mozambiquewere able to reduce child malnutrition significantly,in part through targeted programmes and theintroduction of more nutritious crop strains. Vitamin-A-rich cassava and maize have been introducedinto Mozambique and Zambia, and Rwanda hasintroduced iron-rich beans28. The elements of effectiveintervention are well known. Vitamin supplementsand micronutrients can be delivered cheaply andefficiently through primary healthcare systems. Scalingup maternal and child health programmes, teachinggood feeding practices, identifying vulnerablehouseholds, and measuring and monitoring theproblem can deliver early and significant gains.The problem is that effective intervention requiressimultaneous action on many fronts. Brazil’s successfulZero Hunger model operates through 90 separateprogrammes run by 19 ministries. In contrast, nationalpolicy approaches in many African countries areoften fragmented, poorly coordinated and lacking inpolitical leadership.The ongoing hunger crisis in Africa is linked tothe inequalities discussed in this report. Perhapsunsurprisingly, children from poor households are farmore likely to be stunted than those from wealthyhouseholds. But there are also marked rural/urbandisparities. Rural children in Africa are 50 per cent morelikely to be stunted than their urban counterparts. Thisdraws attention to the two-way interaction betweenmalnutrition and the ongoing neglect of agriculture.Save the Children estimates that three-quarters ofAfrica’s malnourished children live on small farms. Itfollows that investment in these farms, raising theirproductivity, and creating the conditions for off-farm employment are critical requirements for moreequitable growth and for driving down levels of childmalnutrition.Education and health – progress anddisparities matterAfrica has registered strong progress towards theMDG goals on education, child survival, HIV/AIDS,malaria and tuberculosis and – to a lesser extent – onmaternal survival. Yet in each case, most countrieswill fail to reach most targets because they are beingheld back by deeply entrenched inequalities.Some very significant achievements have beenregistered. After the “lost decade”29of the 1990s, whenenrolment levels stagnated and out-of-school numbersincreased, Africa has dramatically increased access toprimary education (see Part IV). The number of under-five deaths fell from 4 million in 2000 to 3.7 million in 2010,with the annualised rate of decline in child mortalityaccelerating from 1 per cent in the decade to 2000 to2.5 per cent over the past decade. Recent estimatesfor maternal mortality point to significant reductionssince 2000, reversing the trend of the previous decade.In East and Southern Africa, the estimated rates ofdecline are 4 per cent and 9 per cent.Advances in combating major infectious diseaseshave been even more impressive. Ten years ago,Africa was unequivocally losing the battle againstHIV/AIDS. The region is far from winning that battle;23 million people are still living with HIV, with womendisproportionately affected. Yet the coverage rateof anti-retroviral therapy (ART), which was less thantwo per cent a decade ago, stood at 49 per cent atthe end of 2010. Approximately half of all pregnantwomen living with HIV receive treatment to preventmother-to child transmission. And 21 per cent ofchildren in need are able to get paediatric HIVtreatments30. On some estimates, progress in tacklingmalaria has been even more remarkable. In 2011, theWorld Health Organization (WHO) reported a declineof one-third in the number of malaria deaths since theend of the 1990s31.Over the last 10 years, there has been a massiveincrease in global investment for malaria, tuberculosisand HIV/AIDS. This has helped African countriesscale up interventions to prevent and treat the threediseases. For example, Senegal’s effective malariaprogramme distributed nearly 6 million insecticide-treated nets between 2005 and 2010. In 2009, 86per cent of patients presenting with suspectedmalaria were tested using rapid diagnostic tests.Expanding coverage of key malaria interventions hasled to a reduction in malaria illness and death andcontributed to a 30 per cent reduction in Senegal’sunder-5 mortality between 2005 and 2009.As with extreme poverty and hunger, data limitationsmean these progress reports have to be treated withcaution. Regional estimates of maternal mortalityfor Africa are based largely on extrapolations froma range of often-dated surveys. There are also largegaps in the data on child mortality.Whatever post-2015 targets are adopted,governments must urgently strengthen the nationalreporting systems through which progress is tracked.MDG monitoring has been one of the growthindustries of the past decades, with dozens of UNagencies, international financial institutions, regionaldevelopment banks, non-government organisationsand academic research institutions involved. Yet westill lack the basic tool-kit required to develop a timelyand accurate picture of the changes in the lives andcircumstances of the very people the MDGs werecreated to support.
  • 25Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeLeaving aside the data constraints, even the mostpositive interpretation of the MDG progress reportleaves no room for complacency. Here, we considerthat report from the vantage point not of progressmade but of distance from the 2015 targets.• Child survival: The regional child mortality rate inAfrica has fallen from 174 to 121 deaths for every1,000 live births since 1990 – far short of the MDGtarget of a two-thirds reduction. Whereas Africaaccounted for one in every three under-five deathsworldwide 20 years ago, that figure has now risento one in two. At current rates of progress, only onecountry (Madagascar) is on track to achieve theMDG goal by 2015, another eight are on a trajectorythat will take them to the goal by 2025, while 23countries will not get there until after 2040. Of the31 countries in the world with under-five mortalityrates above 100 deaths per 1,000 live births, allbut one are in Sub-Saharan Africa. Acceleratedprogress is possible, but this will require concertedaction to tackle malnutrition and the three majorkiller diseases – malaria, diarrhoea and pneumonia– that account for half of child deaths.• Maternal health: Maternal death rates appear tobe falling in Sub-Saharan Africa – but far more slowlythan in other developing regions. The UN estimatesthat the maternal mortality rate decreased by 26per cent in Africa from 1990 to 2008, compared witha 53 per cent reduction in South Asia32. And WHOestimates that the number of maternal deaths in Sub-Saharan Africa increased from 200,000 per annum in1990 to 204,000 in 2008. The majority of these deathsare caused by obstetric haemorrhage, eclampsia,sepsis, complications from unsafe abortions, andindirect factors such as malaria and HIV/AIDS. Notone country in Africa is on target to achieve theMDG target on maternal mortality.• Killer diseases: Every element of the progress reportfor HIV/AIDS and malaria has a negative side. Halfof Africans living with HIV do not have access toART; and half of pregnant women with HIV do nothave access to drugs for preventing mother-to-child transmission. Sub-Saharan Africa is home to1.3 million pregnant women in need of treatment.Similarly, the vast majority of the one million peoplekilled each year by malaria live in Africa – andpregnant women and children account for mostof the victims. The disease costs the region anestimated US$30 billion annually33. HIV preventionmust be a top priority (without which treatment costswill become even more unaffordable). Responseswill need to tackle cultural and behaviouraldrivers such as gender inequality and women’sdisempowerment. Gains in malaria control remainfragile and will need continual investments toprevent a resurgence of the disease.• Education: Despite the increase in enrolmentover the past decade, Africa still has 30 millionchildren out of school. To make matters worse,progress in cutting out-of-school numbers hasslowed. Moreover, far too many of Africa’s childrenare unable to meet the most basic learningachievement standards – even after spendingfour years or more in primary school. We look ateducation in detail in Part IV.5. The glass“half-empty” perspective
  • 26AFRICA PROGRESS REPORT 20121. Preventing unwanted pregnancies2. ENSURING SAFE PREGNANCIES AND CHILDBIRTH3. KEEPING BABIES AND SMALL CHILDREN ALIVEProportion of women who are using any method of contraception among women aged 15-49, married or in a union, 1990, 2000 and 2008 (Percentage)Maternal deaths per 100,000 live births, 1990, 2000, 2008Under-five mortality rate, 1990 and 2009 (Deaths per 1000 live births)020406080100Sub-SaharanAfricaWesternAsiaOceania Caucasus& CentralAsiaSouthernAsiaNorthernAfricaCaribbean SouthEasternAsiaLatinAmericaEasternAsia1320 2229 32 37 4047544451554459 61546056 5460 62485762 6372 747886 840020040400806001208001601 000200Sub-SaharanAfricaCaribbeanSouthernAsiaSouthEasternAsiaOceania NorthernAfricaLatinAmericaWesternAsiaCaucasus& CentralAsiaEasternAsia870790640Sub-SaharanAfrica180129Caucasus& CentralAsia7837NorthernAfrica8026SouthernAsia12269SouthEasternAsia7336LatinAmerica& Carribean5223Oceania7659WesternAsia6832EasternAsia4519590420280 29026023032023017038023016019901990199020002000200820082009MDGtargetMDGtarget23092120 13080991407098 70 54691104163Source:UnitedNations,2011.TheMillenniumDevelopmentGoalsReport2011.Maternal and child health atthe heart of MDG progressFigure 7:
  • 27Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeWhat does inequality have to do with this state ofaffairs? Figure 5 provides part of the answer. Considerthe evidence on infant survival. Infant mortality ratesfor the poorest 20 per cent in Nigeria are more than50 per cent higher than for the richest 20 per cent,and in many countries, living in rural areas magnifiesrisk of infant death.The unequal outcomes reflected in Figure 5 aresymptomatic of wider disparities in access to basicservices. Poor women are less likely to receiveantenatal care and less likely to give birth under skilledattendance at a health facility. In Ethiopia, women inurban areas are twice as likely to receive antenatalcare as those in rural areas. And children from poorhouseholds are less likely to be fully immunised againstinfectious diseases. In Nigeria, the poorest children(who are most at risk) have vaccination rates lessthan 10 per cent of the coverage levels for childrenfrom the wealthiest households (Figure 5). Narrowinginequalities in health and education would createa win–win scenario – it would be good for equityand would act as a catalyst for more rapid progresstowards the MDG targets.To overcome disparities such as these, governmentsmust identify failures of policy and provision andtarget policy interventions accordingly. In somecases, unequal patterns of public expenditure meanthat basic health facilities are not accessible. In othercases, the services may be there, but poor womenmay be unable to afford the fees charged for childand maternal healthcare; or the quality of servicesmay be so poor that they are unwilling to use them.The pattern of health services is often unresponsiveto the needs of women. To take one example, Sub-Saharan Africa is the region with the highest level ofunmet demand for family planning. One quarter ofwomen aged between 15 and 49 express a desire todelay or avoid pregnancy but are not using any formof contraception – and that figure has not changedsince 1990. Apart from denying women the right tocontrol their fertility and manage their reproductivehealth, restricted access to family planning exposesmany to the risks associated with unsafe abortion,HIV/AIDS, and insufficient birth spacing34.A more positive story in maternal mortality is unlikelywithout extending quality health services to peoplein need, particularly the poorest, most marginalisedand those living in hard to reach and fragile contexts.Skilled and motivated health workers appropriatelyarmed with the tools of their trade (drugs, diagnostics,and medical equipment) are needed across Africa.It will require political commitment to reallocateresources to reach all those in need and tackle thestructural and social causes of inequity that adverselyaffect people’s health and wellbeing.Uncertainty of international financing for health hasprompted African leaders, such as Ellen JohnsonSirleaf to commit to weaning their countries off foreignaid. She calls for sound policies, genuine leadership,and reliable partnerships from the world, so thatAfrica can be free of the need for developmentassistance in a generation. That requires a collectivecommitment to implement credible nationalhealth plans that deliver results in Africa. A strongevidence base will help achieve better value formoney, by: identifying cost-effective interventions;improving the delivery of services; facilitating positivebehavioural change (e.g. increased use of bed netsand decreased sexual risk-taking); and managingemerging risks, such as drug resistance.
  • 28AFRICA PROGRESS REPORT 2012* ratio of human water use to renewable water supplyFOOD SECURITY RISK INDEXExtremeHighMediumLowNo dataData source: Maplecroft 2012Food Security Risk Indexmaplecroftrisk responsibility™reputationFigure 8:With some 340 million people lacking access to safe drinking water, Africa is the onlyregion not on track to meet the MDG 7 target.ACTION AREAS• Need for concerted effort on the part of all stakeholders for a new approach to provide improved infrastructure,strengthened management of water resources and universal access• Mobilise resources to reduce existing disparities between rural and urban settings and between different social groups• Incorporate water improvements into economic development agendas• Develop trans-boundary water agreements to reduce the probability of water-related conflicts• Donors should swiftly replenish the Rural Water Supply and Sanitation Initiative (RWSSI) and the African Water Facility(AWF)WATER: A CRITICAL CHALLENGE NOTONLY FOR THE MDGSData sources: Maplecroft2012, CIESIN, 2004; NIMA, 1999; WWDRII, 2000Mean Annual Relative Water Stress Index ** ratio of huma water use to renewable water supplyLow ExtremeNo dataMean Annual Relative Water Stress Index ** ratio of huma water use to renewable water supplyLow ExtremeNo data* ratio of huma water use to renewable water supplyLow ExtremeNo dataWater Stress Index: The Water Stress Index evaluates the ratio of total water use (sum of domestic, industrial and agricultural demand) to renewablewater supply, which is the available local runoff (precipitation less evaporation) as delivered through streams, rivers and shallow groundwater. It does notinclude access to deep subterranean aquifers of water accumulated over centuries and millennia.Rapid urbanization plus the effects of climate change are putting increased stress on access to water and sanitation. Approximately fortyper cent of Africans do not have adequate access to sanitation or water supplies. By 2020, between 75 and 250 million people in Africa mayexperience increased water stress.Water insecurity also reduces agriculture output and increases the incidence of disease. In Africa, around 750,000 children under 5 yearsof age die every year from unsafe water.It is estimated that Africa loses US$28 billion a year due to a lack of access to safe drinking water and adequate sanitation.The gender implications of water stress are profound. Women are more likely to be responsible for water collection. In parts of Africa, ittakes 8 hours a day to find water leaving little time for education and paid employment.WATER STRESS INDEX
  • 29Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeThe MDGs are part of a two-way compactbetween developing- and developed-countrygovernments. In Africa that compact has deliveredtangible results. But there are areas in which donorshave failed to honour their part of the MDG pledge.International aid is a critical part of the MDGcompact. In 2005, at the G8 summit in Gleneaglesand elsewhere, donors made specific commitmentsto increase aid. When quantified by the OECDSecretariat, the pledges implied raising ODA fromabout $80 billion to nearly $130 billion (in 2004prices). At Gleneagles, G8 donors also envisagedan increase in total ODA to Africa of $25 billion.However, preliminary estimates for 2010 show thatAfrica received only an additional $11 billion. Themain reason is the poor performance of several of thedonors that provide large shares of their aid to Africa.As we highlight in Part V, there is little evidence of aidto Africa rising significantly in the near future. Whilegreater self-reliance in Africa is highly welcome, it isregrettable that many donors have failed to deliverwhat they promised – particularly at a time when itseems evident that the potential for aid to be usedeffectively in Africa is particularly high.Partnerships in health have played a major rolein supporting the gains outlined in the previoussection. The Global Fund to Fight AIDS, Tuberculosisand Malaria is a focal point for international efforts,enabling donors, philanthropic foundations andprivate companies to pool resources and coordinateefforts to support national strategies. The Global Fundprovided $12 billion to Africa between 2002 and theend of 2010, supporting anti-retroviral therapy (ART)for 2.3 million people living with HIV and supportingthe treatment of 140 million malaria cases by the endof 2010, including 53 million cases in 2010 alone.Other health partnerships have also made adifference. The Stop TB Partnership has played arole in the diagnosis and treatment of 41 milliontuberculosis cases between 2005 and 2009, savingup to 6 million lives. The Roll Back Malaria Partnershipand the Global Fund have contributed to a surge inproviding and locally producing insecticide-treatedmosquito nets. Between 2008 and 2010, 290 millionnets were distributed in Sub-Saharan Africa, enoughto cover up to three-quarters of people at risk.The GAVI Alliance (formerly the Global Alliance forVaccines and Immunisation) has demonstrated thateven during periods of fiscal stress, high-impact aidpartnerships can galvanise resources and politicalsupport. In 2011, GAVI secured a donor commitmentof an additional US$4.3 billion for the period up to2015, considerably exceeding the initial target ofUS$3.7 billion. This was an example of donors, non-government organisations, philanthropists and theprivate sector coming together with governmentsfrom Africa and other developing regions to securedevelopment financing aimed at achieving well-defined shared goals – in this case immunisation foranother 243 million children by 2015 on top of the 326million they had already helped by 2011.While the global partnerships on health havedelivered results, other critical areas such as water,sanitation and education have faced problems inmobilising support. For example, the aid financinggap for achieving the education MDGs is estimatedby UNESCO’s Education for All Global MonitoringReport at around $16 billion annually in the poorestcountries, while aid levels have stagnated at around$3 billion. In contrast with the GAVI Alliance, thefinancial replenishment of the Global Partnership forEducation (GPE) – a multilateral facility – resulted incommitments of just $1.5 billion over three to fouryears, compared with an initial request for $2.5 billion.Conflict-affected countries in particular have beenpoorly served by the international aid architecture foreducation (Box 4). Of course, the difficulties for donorsoperating in countries emerging from long-runningconflicts are well known. Challenges associated withweak public financial management systems, limitedcapacity and governance problems have to beaddressed. But this should not preclude innovativeand flexible strategies aimed at delivering results inareas such as basic health care and education.6. Building on theglobal partnership
  • 30AFRICA PROGRESS REPORT 2012BOX 4: South Sudan – still awaiting an education peace dividendSix years after the comprehensive peace agreement that brought an end to Sudan’s long-running civil war,South Sudan’s children are still waiting for the education peace dividend that could transform their lives.South Sudan has embarked on independence anchored to the bottom of the world rankings for educationand gender equity. Over half of the country’s primary school age children – one million in total – are out ofschool. In a country of 10 million, there are fewer than 400 girls in the final grade of secondary school. Onthe balance of risk and opportunity, young girls are less likely to reach the last grade of primary school thanthey are to die as a result of pregnancy and childbirth. There are desperate shortages of trained teachers,classrooms and books.Education is vital not just for creating jobs and cutting poverty, but also for cultivating attitudes that helpdevelop a more peaceful society. To its credit, the government of South Sudan has made education anational priority. And the people of South Sudan have demonstrated an extraordinary level of resilience,innovation and courage in keeping alive the hope of education. Unfortunately, education has attractedlimited donor financing, and aid effectiveness has suffered as a result of weak coordination. The GlobalPartnership for Education (GPE), has yet to provide either financial assistance or technical support.A recent report has proposed international support for an emergency “education catch-up plan” for SouthSudan that would expand learning opportunities for three million South Sudan children and young people.Financing requirements estimated at around $400 million annually would be mobilised through the WorldBank, the GPE, the African Development Bank and bilateral donors, with support channelled through apooled fund35.For all of the problems that they have faced, the globalhealth funds have a strong record of achievement.Transforming the GPE into an independent globalfund modelled on the best practices of the healthfunds could create renewed momentum for progresstowards the education goals. The GPE could focusits efforts explicitly on a “big push” towards the2015 targets, focusing on the most disadvantagedcountries, children who are being left behind and theneed to improve learning achievements.
  • Africa’s future will be shaped by its people and by thepolicies of its governments. But no country or region caninsulate itself from the wider forces of globalisation. And nogovernment can afford to ignore how these forces mightinteract with the social and economic currents that areredefining their countries.PART IIFIVE GLOBAL TRENDS THATARE SHAPING AFRICA
  • 32AFRICA PROGRESS REPORT 2012Some broad trends are more predictable thanothers. Demography is one area in which the faceof the future can be anticipated with some degreeof confidence. In the case of Africa, that face isincreasingly youthful.The power of demographyAfrica is in the midst of a profound demographicshift. Population is growing faster than in anyother region. Over the next few decades, there willbe a surge in the number of young people living in theregion. With fertility rates beginning to decline, Africacould be on the brink of the type of demographicrevolution that Asia experienced three decades ago.As the ratio of working-age people to dependantsrises, economic growth could get a boost – ademographic dividend.That is the opportunity. The risk is that the potentialdividend will become a demographic disastermarked by rising levels of youth unemployment,social dislocation and hunger. Outcomes will dependon whether or not the current generation of youngAfricans makes the transition to adulthood equippedwith the education and skills they need to realise theirpotential – and on whether job creation takes off.Anyone doubting the power of population growthshould consider Africa’s basic demographicarithmetic. When economic recovery took root adecade ago, the region had a population of 670million people. By 2025, that figure will have doubled– and population will continue rising into the secondhalf of the 21st century.Youth is already one of the defining features of Africa’sdemography (Figure 10). The median-aged African isjust 18. That is 7 years younger than their counterpartin South Asia, and 16 years younger than in China.The base of Africa’s age pyramid is widening. Today,there are 70 million more Africans aged under 14 thanthere were a decade ago. Over the next decade,that number will rise by another 76 million. These trendshave consequences across all areas of public policy.Consider the case of education. Just to hold primaryschool enrolment rates constant, governmentswill have to provide the classrooms and teachersneeded to raise school participation by another 14per cent. Assuming that Africa continues to progressin education, many of these children will make thetransition to secondary school before making thetransition to employment markets.That transition is already a difficult one – and in theabsence of job creation on a very large scale, it willbecome more difficult. Over the last 10 years, thenumber of 15–24-year-olds in Africa has increasedfrom 133 million to 172 million. By 2020, that figure willrise to 246 million. Consequently, another 74 millionjobs will have to be created over the next decadesimply in order to prevent youth unemployment fromrising.To understand how demography is changing the faceof nations, you just have to glance at a populationroad map for countries at different stages of thedemographic transition. One way of measuringwhere countries stand is to compare “dependencyratio” indicators. The ratio of those aged 0–14 to thoseaged 15–64 is one such indicator. As countries age,the dependency ratio falls. For developed countries,the current ratio is around 24 per cent. It rises to 47 forSouth Asia. In Africa, it is 77.The infographic on demographic trends (Figure 10)illustrates the 0–14 age group in some African countriesand compares the population-change trajectoriesof Brazil, China and India. China’s demographicturning point started four decades ago. By 2020, the1. Demography andhuman geographypreparing for the youthsurgeThis section looks at five global trends that areinfluencing Africa’s future:1. Demography and human geographypreparing for the youth surge2. Global food securitymore people on a warming planet3. Tectonic shifts in economics and politicsthe rise of the emerging powers4. Science, technology and innovationfuelling growth and development5. The rising tide of citizen actionNoneofthesetrendsoperatesinisolation.Eachcomeswithrisks and opportunities and each interacts with the others.How Africa’s people, governments and developmentpartnersmanagetherisksandrespondtotheopportunitieswill determine how each trend plays out.
  • 33Jobs, Justice and Equity: Seizing Opportunities in Times of Global Changenumber of those aged 0–14 will be one third lowerthan in 2000. In Brazil, the number of children aged0–14 started to decline 20 years ago. India is just atthe tipping point of a demographic transition. Thesize of the 0–14-year-old population is flattening out.The trajectories for Africa look very different. Considerthe case of Nigeria, which is on the lower slopes of apopulation growth curve trending strongly upwards.Over the next decade, the number of those aged0–14 will increase by over 25 million. With the countryalready struggling to generate jobs for the previousgeneration of 0–14-year-olds, the youth employmentchallenge is set to intensify.Urbanisation is reshapinghuman geographyAfrica’s human geography is also undergoingprofound changes. Pushed by rural poverty andpulled by the hope of employment, more and more ofthe region’s people are migrating to cities.Today, around one-third of Africans live in urbancentres – more than double the share two decadesago. By 2025, the UN estimates that urban centres willbe home to 45 per cent of the population36. Africa’smega-cities are already growing at a prolific rate. Thepopulation of Kinshasa, the capital of the DemocraticRepublic of Congo, grew by 2 million between 2005and 2010, putting it into the “10 million plus” league37.Lagos, Nigeria, could be a city of 14 million by 202038.There are two sides to the urbanisation story. Urbancentres have emerged as hubs of innovation,employment and human networking, acting asmagnets for entrepreneurs and job seekers. But theyare also centres of acute deprivation. Sprawlingslums like Makoko, on the outskirts of Lagos, or Kiberain Nairobi, Kenya, have some of the world’s highestpopulation densities, with their residents living inappalling conditions.Informal settlements are growing rapidly. Accordingto UN Habitat, the number of slum dwellers in Africahas doubled over the past decade to more than200 million39. There is no shortage of innovation andentrepreneurial activity in slums. On the contrary,innovation is an urban survival strategy. Yet conditions inmany of Africa’s slums are unacceptable. All too often,basic public services and public goods – clean water,sanitation, health, education and security – are scarceor non-existent and the state is practically absent.Future patterns of urbanisation will be superimposedon a backdrop of already widespread urban squalor.If the UN’s projections are right, population growth andrural–urban migration will lead to another 145 millionAfricans living in towns and cities by 2020 – a 50 percent increase in population40. If past trends continue,the majority will be living in informal settlementswhere the housing and basic service infrastructure isalready hopelessly overstretched, and where moreovercrowding will create new public health risks.URBANIsATION FACTS AND TRENDSToday 1/3 of Africans live in urban centresBy 2025, the UN estimates 45% of the population will be living in urban areasThis will mean that an additional 145 million people will move to cities, many of which will end up living in urban slumsAccording to UN Habitat, the number of slum dwellers in Africa has doubled over the past decade to more than 200 millionCITIES CONTINUETO EXPAND ANDconcentrateManaging informal settlements (expansion and population)Providing basic services (in particular education, improving security and social housing)Expanding infrastructure (access to water, sanitation, electricity and transportation networks)Job creation (economic and social integration of the growing population)These trends pose aseries of IMPORTANTchallenges• innovation• economic opportunities• jobs and education• access to goods andservices• crime• over-population• public health hazards• segregation andinequalityFigure 9:
  • 34demographics2011: AYEAR OF SOCIAL UPRISIGovernmentoverthrown Ongoingprotests,civildisorderandgovernmentalchanges MLEGENDINFOGRAPHIC 1:north america 2010 2030 2050Total population* (thousands) 344 529 401 657 446 862% of global population 4,97 4,83 4,80EUROPE 2010 2030 2050Total population* (thousands) 738 199 741 233 719 257% of global population 10,70 8,91 7,73Africa 2010 2030 2050Total population* (thousands) 1 022 234 1 562 047 2 191 599% of global population 14,82 18,77 23,55Population in 2050Population in 2010ANTICIPATING AYOUTH SURGEOver the next few decades, there will be a surgein the number of young people living in Africa.With fertility rates dropping, Africa could be onthe brink of the type of demographic revolutionthat Asia experienced three decades ago.WPP 2010 Population EstimatesWPP 2010 Low Variant ProjectionWPP 2010 High Variant ProjectionProbabilistic Median1950 210020502010nigeria1950 210020502010china1950 210020502010brazil1950 210020502010KENYA884376735604400218,50178south america 2010 2030 2050Total population* (thousands) 392 555 461 496 488 073% of global population 5,70 5,55 5,24the median estimate for worldpopulation in 2050 is 9 billionThe Population of Asia and Africa is expected to double by 2050Figure 10:
  • 35INGMajorprotestsin2011 Minorprotests in2011 Protestsavoided/supressedthroughpreemtivemeasuresLack of democracyFood inflationLack ofopportuntiesCorruptionInequalityPolicebrutalityUnemploymentLowwagesLack ofcivil rightsPoor livingconditionsLack offreedomSocialreformQualityeducationGovernmentCorporate greedHuman rightsviolationsAbsolute MonarchyDisregard for Women’s rightsPovertyLabourrightsPOLITICALSYSTEMSOCIALINJUSTICEECONOMICHARDSHIPTRIGGERSTO SOCIAL UNRESTLorem ipsum dolor sit amet, consectetur adipiscing elit. Nuncquis sapien non ipsum accumsan consequat. Aenean placerattortor ac augue porta in imperdiet augue lobortis. Duis et enimurna, ac interdum lorem. Vestibulum sollicitudin, risus atconsequat luctus, felis est luctus eros, et gravida elit nulla sitametlorem.Sedsitametsollicitudinerat.Sedegestas,ipsuminhendrerit vulputate, eros eros aliquam orci, vel rutrum eros estsed libero.Vivamus mattis enim eget felis ullamcorper ultrices.Suspendisse congue, ligula ullamcorper blandit pellentesque,est est ultricies ante, eget consectetur ante nisl at lacus. Nuncultriciesviverrametus,idgravidafelisultricesat.Aliquam nec leo ultrices sem molestie lobortis vitae ut libero.Suspendisse consectetur eros nec elit mattis vehicula. Donecsagittis euismod condimentum. Integer nunc massa, hendreritvitae sodales et, porttitor condimentum sem. Nulla quis eros euturpis luctus sollicitudin id vitae arcu. Pellentesque sit ametmassa in nisl dignissim pulvinar. Nam sit amet tempus neque.Vivamus tristique mi venenatis neque lobortis conguepellentesque ligula semper. In hac habitasse platea dictumst.Seddictumcommodoodio,utullamcorperjustoelementuma.MohamedBouazizi-themanwhosparkedarevolutionoceania 2010 2030 2050Total population* (thousands) 36 593 47 096 55 233% of global population 0,53 0,57 0,59Source: APP with data from United Nations, Department of Economic and Social Affairs.Population Division, Population Estimates and Projections Section* Median variantSource: AfDB, 2011.china 2010 2030 2050Total population* (thousands) 1 341 335 1 393 076 1 295 604% of global population 19,45 16,74 13,92THE JOB CREATIONCHALLENGEwithin sub-saharan africa, theeconomically active populationis expected to continue toincrease across all sub-regions,especially in EASTERN AFRICAAfrica is in the midst of a profound demographicshift. Population is growing faster than in anyother region. As the ratio of working age peopleto dependents rises, economic growth could geta boost – a demographic dividend.Economically active population (millions)800600400200Eastern AfricaCentral AfricaSouthern Africa Western Africa% Economically active population as per cent of total2000 37%252m2010 40%337m2020low 45%440m2020high 42%446m2030low 55%645m2030high 51%681m0asia 2010 2030 2050Total population* (thousands) 2 822 917 3 474 665 3 846 616% of global population 40,94 41,76 41,33excludingchina
  • 36AFRICA PROGRESS REPORT 2012The poor are too often relegated to informalsettlements on the outskirts of cities, without thefootholds they need to improve their lives in urbaneconomies. Many may still suffer from the isolation,distance and lack of access that characterise ruralareas, while eking out precarious livelihoods traversingrural, peri-urban and urban settlements. As well aspreventing Africa from harnessing the benefits ofurban agglomeration, a failure to build inclusive citieshas considerable welfare consequences for thoseliving in informal settlements and slums on the edgesof cities.Predictions about urbanisation patterns that haveserious implications for Africa have not received theattention they deserve. Around the world 25 citieswill emerge as centres of economic growth41. Noneof them is in Africa. However, the world’s city with thelargest number of children in 2025 will be Kinshasa. Onthe same measure, Lagos will rank sixth and Luanda,Angola, will also be in the top 25. This raises the spectreof a growing number of Africa’s children being broughtup in urban environments that pose life-threateninghealth risks while providing scant opportunities foreducation and jobs.Scenarios for urbanisation confront Africa with starkchoices. Growing cities could become centres ofinnovation and labour-intensive employment, withgovernments and municipal authorities steppingup investment in infrastructure and homes forordinary citizens. This will take policies that combinejob creation with approaches to planning thatavoid pushing the poor into illegal or peripheralsettlements, and the development of public–private partnerships to finance the developmentinfrastructure, with water, sanitation and housingthe top priorities.These are win–win scenarios, with public investmentin upgrading slums, creating jobs and reducinghealth risks. The danger is that slums will continueto expand with limited job creation and continuedunder-investment – creating risks not just for publichealth but also for public order.These broad shifts in demography and humangeography will not emerge uniformly. But to varyingdegrees they will affect every country in the region– and every African government needs to grapplewith the implications.Source:UNDESA,TheWorldUrbanisationProspects,the2009Revison,2010SLUM POPULATIONIN URBAN AFRICAEgyptSomaliaEthiopiaKenyaUgandaRwandaTanzaniaComorosMalawiMadagascarZimbabweMozambiqueBurundiLesothoSouth AfricaAngolaNamibiaMoroccoMaliNigerC.A.R.ChadCameroonCongoTogoBeninGhanaCôte d’IvoireEquatorialGuineaGabonNigeriaMauritaniaGambiaGuinea BissauSierra LeoneGuineaBurkina FasoSenegalSudanEritreaSwazilandBotswanaZambiaTunisiaLibyaAlgeriaDjiboutiLiberia653070.5Share of urban population living in slumsNo dataTotal urban population by country(million inhabitants, 2005)Figure 11:
  • 37Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeThe global food system is under acute and risingpressure. Population growth, economic growthand the search for low-carbon energy sources aredriving up demand for food, while climate change,ecological constraints and lower levels of productivitygrowth in agriculture are limiting supply. For much ofthe 20th century, the price of food fell in real terms,confounding the predictions of many commentators.There is still more than enough food in the world tofeed everyone. Yet there is a growing – and justified– concern that agriculture, demography, economyand ecology are set on a collision course.What do the emerging strains in the global food systemmean for Africa? There are some opportunities thatalso carry large risks. Higher food prices could createincentives for governments to invest in agriculture andraise productivity, or they could lead to a dramaticworsening of poverty and malnutrition amongvulnerable populations. Africa’s vast untappedpotential in agriculture could become a source of ruralprosperity and more balanced economic growth,or it could act as a magnet for more speculativeinvestments, land grabs and the displacement oflocal communities. Carbon markets might open upopportunities for small farmers to benefit from climatechange mitigation efforts in rich countries, though thebenefits have so far proven limited and the future ofthese markets remains uncertain. What is certain isthat Africa’s farmers will bear the brunt of dangerousclimate change, with drought and unpredictablerainfall patterns reinforcing rural poverty andundermining food systems.World agriculture –a new era of scarcityThe first decade of the 21st century brought withit early warning signs of deepening stress in theglobal food system. Food-price hikes in 2008 resultedin hunger and riots in many countries, including severalin Africa. Another price rise in 2010 and the depletionof cereals stocks appeared to signal the onset oftightening markets. While prices have now fallen,the medium-term trend is unequivocally headingupwards as demography, climate change and risingdemand in emerging economies reconfigure globalfood markets.Population growth is increasing the number of peoplewho have to be fed – and it is not just the number ofpeople that is growing. As incomes rise in emergingmarkets, diets are switching towards protein-intensivefoods – dairy and meat products – that require morecereals for their production. Even in 2011/12, as pricepressures moderated, the IMF estimated that globaldemand for major crops would rise by just over 2 percent. This is well above the 20-year average, withemerging markets accounting for the bulk of theincrease42. By 2050, consumption will be 70 per centabove today’s level. The International Food PolicyResearch Institute (IFPRI) estimates that by 2050,international prices for maize will double, while wheatand rice prices will increase by around 60 per cent.Agricultural policies in rich countries are addingto pressures on the global food system. Driven byconcerns over rising oil prices, energy security andclimate change, governments have increasedsupport for the production and distribution of bio-fuels. The United States has been directing subsidiesof $5.5 billion to $7.3 billion annually towards corn-based ethanol – raising world prices by 10 per cent to17 per cent in 2008. The European Union’s RenewableEnergy Roadmap includes policies to promote bio-fuels for transport and targets that will drive up importdemand. Rising EU demand is increasing demand forproduction and land in developing regions, includingAfrica. The net effect of the EU and US policies is thatmore of their agricultural production will be directedto domestic markets while import demand will rise.In the face of these growing demands, constraints onsupply are tightening. Agricultural yield in emergingmarkets is slowing in the face of surging demand.Ecological constraints are contributing to the pressureon agriculture. Large areas of China and South Asiaare facing acute water scarcity. According to UNEP,up to one-quarter of world food production may be“lost” during the current century as a direct result ofescalating environmental degradation, including aloss of biodiversity and soil erosion43.2. Global food securitymore people on a warmingplanet
  • 38AFRICA PROGRESS REPORT 2012FOOD SECURITY RISK INDEXExtremeHighMediumLowNo dataData source: Maplecroft 2012Food Security Risk Indexmaplecroftrisk responsibility™reputationTHE RISK OF FOOD INSECURITY IS HIGHER IN AFRICA THAN IN ANY OTHER REGION Despitedifferences within the region. there is not a single country which is rated as lowrisk. In sub-Saharan Africa, over 200 million people are food insecure.ACTION AREAS• Put smallholder farmers and agriculture productivity at the centre of national food security and nutritionstrategies, with a focus on women farmers. Encourage youth engagement in agriculture throughout the valuechain and work closely with the private sector• Focus on social protection by providing cash or food during periods of stress, to enable rural producers to copewithout compromising their long-term productivity or withdrawing their children from school• Focus policies on household enterprises to reduce poverty and dependence on agriculture• Ensure that Africa’s land and water resources are sustainably managed to provide food and nutrition security andlivelihoods• Protect Africa’s farmers against large-scale speculative land purchases• Strengthen early warning and response systems for food security crises• Renew and intensify commitment to improving food security and nutrition in Africa at the meetings of the G8 inthe United States in 2012 and in the United Kingdom in 2013• Develop risk management and adaptation systems to prepare for climate change. OECD-DAC donor countriesshould clarify how they will mobilise resources for the Green Climate Fund, with specific provisions for adaptationMaplecroft’s Food Security Risk Index assesses the risk of food insecurity, providing quantitative assessments of access and availability of foodand the stability of food production systems. The FSRI also comprises indicators to measure the nutritional outcomes of each country’s relativefood security.FOOD SECURITYFigure 12:FOOD SECURITY RISK INDEX
  • 39Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeOn the front line –African food securityThe dramatic changes that are recasting worldagricultural markets will have far-reachingconsequences for Africa. Countries across theregion are becoming increasingly vulnerable to foodinsecurity. Governments – and their developmentpartners – need to act now to develop strategies forrisk reduction and management.Unstable international food prices represent onearea of risk. As the events of 2007/2008 and 2010 sopowerfully demonstrated, many countries in the regionare poorly equipped to respond to global price surges.Countries that are large net importers of food staples –such as Ethiopia, Guinea, Sierra Leone, Madagascar,Mozambique, Niger and Mali – quickly feel the impactof higher import prices. So, too do countries thatexperience drought or adverse weather conditionsduring periods of higher world prices, as illustrated bythe experience of Benin and Kenya in 2011.As global price pressures mount, Africa’s governmentsneed to put in place policies that will mitigate therisks facing vulnerable people. Social protectionprogrammes – such as Ethiopia’s Productive SafetyNet Programme – can help shield poor householdsfrom food -inflation by providing a source of incomeor food during periods of stress. Governments can alsoregulate domestic markets by building up reservesduring periods of low prices, and releasing stocksas prices rise; Cameroon has created an agency toaddress the task. Trade policies are also important inresponding to price shifts. Misplaced policies shouldbe avoided. In mid-2011, Kenya maintained maizeprices 70 per cent higher than already high worldprices – during a major drought – to protect theprices paid to predominantly large-scale commercialfarmers. Yet, it ended up exacerbating underlyingfood security problems. A key policy lesson from the2011 drought is that consistent food importers shouldreduce food-price inflation through regional andinternational trade.Coordinated international assistance is also required.The food crisis in the Horn of Africa during 2011graphically illustrated some of the problems with thecurrent food-aid system. Agencies were warningof an emerging crisis in August 2010. Yet, it was notuntil the rains failed for a second time, in 2011, thata concerted response developed. By the time aidstarted to arrive in sufficient quantities, people hadalready started to die44. As the threats posed byclimate change and rising world prices mount, Africangovernments and international agencies need to putin place a more robust, responsive and predictableemergency response system. Food aid has to be partof that system. Here too, though, there are problemsto be addressed. Food aid becomes less availableas prices rise and supplies tighten, and there areindications that food aid is becoming more difficultto mobilise on a predictable basis. In 2006, on the eveof the price hike, there was 40 per cent less food aidavailable than in 2000.As the food crisis in the Horn of Africa and the 2008price surge powerfully demonstrated, food securityis an area in which prevention is more effective –and cheaper – than emergency aid after the fact.With the prospect of higher and more volatile prices,African governments need to give urgent attentionto what is likely to prove the single most effectiveway of preventing food shocks: the development ofsustainable smallholder agriculture (Box 5).Climate change will make this task more difficult.Dependent on rain-fed agriculture, operating indrought-prone and flood-prone areas, and workingon ecologically fragile soils with limited fertiliser andother inputs, farmers in Africa are acutely vulnerableto climate change. A survey carried out by Oxfam45among farmers in Kenya, Malawi, Mali, Mozambiqueand Uganda showed a consistent pattern of concernover more erratic and variable rainfall, the effects ofheat stress on plants, shorter growing seasons, and insome cases more intense and protracted drought.Sophisticated crop-modelling exercises point to worseto come. The Intergovernmental Panel on ClimateChange (IPCC) identified Sub-Saharan Africa as theregion facing the greatest food-security risks as a resultof climate change. Higher temperatures, increasedwater evaporation, less predictable rainfall, increasedwater stress and an expansion of drought zones couldundermine agricultural production. Yields for staplefood crops such as cassava, sweet potatoes and yamscould fall by up to 15 per cent by 2050, and for maizeby up to 30 per cent. Put these projections alongsidescenarios for rising population and higher food-importprices, and you have perfect storm conditions forincreased hunger. Research by IFPRI suggests thatclimate change effects alone will push an additional 1million children into malnutrition by 203046.Successful adaptation by smallholder farmer coulddramatically reduce the risks posed by climatechange. Innovations in water managementand irrigation, drought-resistant seed strains, soilconservation, and new tillage and climate-resilientcropping patterns could all make a difference.Africa’s farmers are innovative, resourceful and usedto managing climate risks but will not be able toadapt consistently and to sustainable effect on their
  • 40AFRICA PROGRESS REPORT 2012own. They need help from their governments and theinternational community in scaling up adaptation.That help has been slow in arriving. Looking at thecircumstances of Africa’s farmers, it is difficult toescape a sense of injustice. Rich countries have notbeen slow to invest in adaptation at home. They areinvesting billions of dollars in flood control systems. Totake one example, the United Kingdom spends $1.2billion annually on flood defences47. Farmers in theEuropean Union are receiving $120 billion in subsidiesthat help reduce risks. Compare this with the $100-200 million channelled to support climate adaptationin the poorest countries through the specialisedmultilateral funds created for this purpose48. Thisamounts to what Desmond Tutu has aptly describedas “adaptation apartheid”49.Support for climate change adaptation couldsubstantially reduce the risks facing Africa’ssmallholders. Even relatively small investments couldgenerate high returns by preventing far greaterfinancial losses, as well as the loss of livelihoods.One recent study for Tanzania concluded that anannual investment of US$100 million in adaptation forsmallholders – encompassing support for small-scaleirrigation, terracing, rural roads and research – wouldprevent annual losses of several hundreds of millionsof dollars50. Social protection is another priority areafor adaptation support. When crops fail, smallholderfarmers often have no choice but to adopt copingstrategies that involve selling off productive assets,and cutting spending on health, education and food.This is part of the rural poverty trap. By providing cashor food during periods of stress, social safety nets canenable rural producers to cope without compromisingtheir long-term productivity, or withdrawing theirchildren from school.Considerations of human solidarity, natural justiceand economic efficiency provide a compellingcase for international action. Africa’s farmers andgovernments alike cannot meet the lion’s share ofthe costs of successful adaptation, and nor shouldthey have to. Women farmers in Malawi, Ethiopiaand other parts of Africa have among the world’ssmallest carbon footprints. They are not responsiblefor dangerous climate change and they have a rightto expect support from the countries that carry thebulk of that responsibility. Delaying investments inadaptation will not only result in avoidable humansuffering and the unnecessary loss of productivepotential, but also raise the cost of adaptation overthe long run. That is why developed countries mustnow deliver on the commitment made at successiveclimatechangesummitsinCopenhagen,CancunandDurban to mobilise $100 billion by 2020 for the GreenClimate Fund, with half of that amount earmarkedfor adaptation. In the meantime, it is essential toswiftly replenish the Rural Water Supply and SanitationInitiative (RWSSI) and the African Water Facility (AWF)of the African Bank for Development, as they arethe most effective instruments to finance access towater and sanitation in urban and remote rural areasof Africa and to develop adaptation initiatives evenbefore the Green Fund becomes operational.The great African land grabFor communities across Africa, land is more thanjust an economic asset. It is a source of life andan essential part of livelihoods, culture and identity.To others in the increasingly interconnected globalmarketplace for trade and finance, Africa’s landlooks very different. Foreign governments concernedabout future food supplies, agribusiness companiesseeking production sites for bio-fuels, and assortedforeign investors and speculators, have joined therace to secure access to what, in their eyes, looks likethe world’s last great unexploited agricultural frontier –African farmland and water resources. One influentialreport, directed towards the global investmentcommunity, announced that Africa was home to 600million hectares of uncultivated arable land – 60 percent of the world total51.Foreign investors have not been slow to act. Recentyears have seen a proliferation of large-scale landdeals across the world, many of them concludedin secret and unreported. The most extensivelyresearched recent analysis puts the number ofreported deals concluded worldwide between2000 and 2011 at around 2,000, covering 203 millionhectares52. Africa accounted for 948 acquisitionscovering 134 million hectares – an area larger thanFrance, Germany and the United Kingdom combined.As in other parts of the world, the scramble for Africa’sland was triggered initially by the sharp rise in foodprices in 2007. Other factors include increases in theprice of oil and growing EU demand for bio-fuels.Outright speculation has also played a role. Therecent global fragility in bond and equity marketsmay have encouraged investment fund managersto seek rights to African land in anticipation ofrising values. As the most comprehensive survey onglobal land deals states: “The high level of interest inacquiring land in Africa appears to be driven by aperception that large tracts can be acquired fromgovernments with little or no payment.”53There isa parallel perception that very high returns are onoffer. One of the largest agricultural funds operatingin Africa has informed investors that it is targeting
  • 41Jobs, Justice and Equity: Seizing Opportunities in Times of Global Changean average return on its activities in the region of 25per cent. Even discounting for exaggeration, this is aremarkable claim.The rush to procure Africa’s land involves a broad castof characters, including government agencies andsovereign wealth funds from China, Saudi Arabia andQatar; private companies from India, South Korea, theUnited States and Europe; and assorted hedge fundsand investors. The only motivation missing on the partof these investors has been the most important of all,namely the imperative of raising the productivity ofsmallholder agriculture, building rural prosperity anddeveloping Africa’s land resources to meet the needsof African people.Land-grabbing has emerged as a region-wide growthindustry. The sheer scale of the deals made is a causefor concern. In the space of just four years to the endof 2010, foreign investors secured rights to 5.1 millionhectares of land in South Sudan. According to theOakland Institute, investors have included a Texas-based financial investment company, Egyptian privateequity firms, and development funds associated withthe governments of the United Kingdom and Finland54.Mozambique has granted concessions amounting tomore than 2.5 million hectares, with bio-fuels a majoractivity. Tanzania, Ethiopia and Zambia have allprovided concessions on extensive land areas.For Africans, the benefits of large-scale landacquisitions are questionable. That is especially true forthe many thousands of smallholder farmers who havebeen evicted from their land, sometimes by force andtypically with minimal compensation, to make wayfor foreign investors. In one recent case taken up bynon-government organisations and communities inUganda, the International Finance Corporation’sombudsman decided to investigate charges that20,000 farmers in western Uganda were evicted with nocompensation. In a landmark case, the Ombudsmanof the International Finance Corporation (IFC) is nowinvestigating a complaint brought by Oxfam andthe Uganda Land Alliance against an IFC-supportedprivate equity fund. The fund invested in a companyalleged to have forcibly displaced people from landin Uganda to make way for pine and eucalyptusplantations55.Many governments promoting land acquisition appearto view it as part of a wider strategy to encouragelarge-scal agriculture. Under the right conditions, thereis no question that foreign investment in commercialfarming can be of benefit. As well as linking smallholdersto regional and global markets, commercial farmscan provide the capital, technologies, infrastructure,and knowledge needed to raise yields, revenue andemployment. Unfortunately, land acquisition in Africahas often been managed in a way that secures noneof these benefits.Detailed analysis of the contracts for land acquisitionhelps to explain why. Leases are typically provided atvery low levels of rent and extensive tax exemptions.Investors are seldom required to provide employmentopportunities for local communities or to contract withsmallholder farmers. The contracts are usually drawnup and negotiated behind closed doors without socialand environmental assessments, consultations withaffected communities or subsequent requirements foraudits. There are no food-security safeguards requiringleaseholders to sell food products in local marketsduring periods of high food prices.Against this backdrop, it is unsurprising that the resultsof large-scale land acquisition have often proveddisappointing. Lacking the legal and technicalcapacity to scrutinise the detail of land deals, Africangovernments have often found themselves hostageto inequitable agreements. The lack of transparencyaround land deals and contracts opens the door tocorruption and forced evictions. Although patternsof land ownership vary across Africa, many farmers –especially female farmers – in Africa lack a codifiedlegal basis to back their land claims, so the rich andpowerful can secure their displacement even if theirfamilies have lived on the land for generations. In manycases investors have secured leases but left the landidle, holding it as a speculative asset to be exploited –or traded – under the right market conditions. Oxfamand other international non-government organisations,working with partners in Africa, have successfullychallenged powerful commercial interest groups anddrawn the attention of governments and the widerpublic to the threat posed by land grabs.Several governments in Africa have now taken boldsteps to address the problems associated with large-scale land deals. At the end of 2009, Mozambiquedeclared a moratorium on new large-scale landconcessions and several projects were cancelled. Twoyears later, under a new agricultural policy, a processof community land registration was introduced toprotect smallholder rights. Liberia renegotiated thecontract for a large-scale rubber plantation to secureincreased revenues and enforceable commitmentson employment and business opportunities for localcommunities.There is no question that Africa needs investment –private and public – in agriculture. What Africa doesnot need, and cannot afford, is policies that transferland to investors motivated principally by a concernto feed populations in other countries, supply bio-fuelmarkets across the globe, or to secure speculative profit.
  • 42AFRICA PROGRESS REPORT 2012In Africa, it is estimated that between 2000 and 2011 there were 948 acquisitions covering134 million hectares – an area larger than France, Germany and the United Kingdomcombined.The Respect for Property Rights Index assesses the protection extendedto private property, including access to remedy.Jobs, Justice and Equity: Seizing Opportunites in Times of Global Changemaplecroftrisk responsibility™reputationKEY ACTIONSrecommendationrecommendationsrecommendationLAND GRABS AND PROPERTY RIGHTSSMALL TEXT ON LAND GRABS AND HOW WEAK LEGISLATION IS A PROBLEMExtremeHighMediumLowNo dataData source: Maplecroft 2012Respect for Property Rights IndexRESPECT FOR PROPERTY RIGHTS INDEXThe challenge with landacquisition contracts in Africa:• Leases are typically providedat very low levels of rent withextensive tax exemptions.• Investors are seldom requiredto provide employmentopportunities for localcommunities or to contractwith smallholder farmers.• The contracts are usuallydrawn up and negotiatedbehind closed doors withoutsocial and environmentalassessments, consultationswith affected communities, orsubsequent requirements foraudits.• There are no food-securitysafeguards requiringleaseholders to sell foodproducts in local marketsduring periods of high foodprices.LAND GRABS AND PROPERTY RIGHTSThe Respect for Property Rights Index assesses the protection extendedto private property, including access to remedy.Jobs, Justice and Equity: Seizing Opportunites in TKEY ACTIONSLAND GRABS AND PROPERTY RIGHTSSMALL TEXT ON LAND GRABS AND HOW WEAK LEGISLATION IS A PROExtremeHighMediumLowNo dataData source: Maplecroft 2012Respect for Property Rights IndexFigure 13:ACTION AREAS• Protect Africa’s farmers against large-scale speculative land purchases• Carefully assess large-scale land deals and consider a moratorium pending legislation to protect smallholder farmersand communities• The African Union should develop a framework for managing foreign investment in agriculture• Since African governments have limited capacity to manage foreign investment in land, the African DevelopmentBank’s new African Legal Support Facility could consider developing further expertise in land management• Strengthen legislation to give women farmers equal land rightsFOOD SECURITY RISK INDEXExtremeHighMediumLowNo dataData source: Maplecroft 2012Food Security Risk Indexmaplecroftrisk responsibility™reputationThe Respect for Property Rights Index assesses the protection extended to private property, including access to remedy. It examines the ability to acquire(movable and immovable) private property and the protection extended to property within a country’s legal framework. It also considers the access to remedyshould expropriation occur and the provision for compensation.
  • 43Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeBOX 5: The ‘forgotten class’ – Africa’s farmersOne reason for Africa’s modest progress in cutting poverty and malnutrition is the ongoing neglectof smallholder agriculture. This is an issue taken up in some detail in the United Nations DevelopmentProgramme’s first African Human Development Report56. Urbanisation may be gathering pace and growthsectors emerging in manufacturing, mining and services. Yet the livelihoods of two out of every three Africanscontinue to depend on farming. Agriculture is the primary source of livelihood and income for Africa’swomen. Apart from providing jobs and food for rural populations, Africa’s farms also supply urban areas withfood. Yet, many of Africa’s farmers are being left behind.Unlocking the productive potential of Africa’s farmers would strengthen economic recovery. It would raiseincomes, create jobs, create new markets, open new opportunities for investment, and link the farm andthe rural non-farm economy with other growth centres. Because most of Africa’s poor live and work inrural areas, productivity gains would strengthen the two-way interaction between growth and povertyreduction. In countries such as Ethiopia and Kenya, every percentage point of agricultural growth reducesthe incidence of poverty at twice the rate of growth in other sectors. And at a time when Africa has theworld’s fastest-growing population, when more people are moving to cities, and when there are growingconcerns over world food prices, a more vibrant agriculture would provide a secure foundation for foodsecurity.Agriculture has not been a central part of the African growth story. Cereal yields are just over one-third ofthe average for the developing world – and have barely increased in 30 years. The obstacles to increasedproductivity in smallholder agriculture are well known. In marked contrast to Asia, where irrigated agriculturedominates, around 80 per cent of African farms operate under rain-fed conditions, often in drought-proneenvironments (irrigation is important but the lack of it does not necessarily mean that productivity cannotbe increased, as was shown in Brazil). Fertiliser use per hectare is the lowest in the world. Lacking inputs ofimproved seeds, new technologies and pesticides, farmers struggle to raise yields. The end result is thatmost smallholders are unable to produce enough food to meet household needs, let alone respond to themarket opportunities created by rising urban demand.Rather than address these problems directly, some governments have reached the conclusion that onlylarge-scale commercial farms can achieve a productivity breakthrough. Such farms do have a critical roleto play, especially when they act as hubs linking producers to improved inputs and farming systems, newmarkets and higher value chains. Yet Africa will not increase food production, create jobs or reduce povertyat the scale required without unlocking the potential of smallholder agriculture.Smallholder agriculture must be placed at the centre of a green revolution for Africa, as highlighted inthe work of the Alliance for a Green Revolution in Africa (AGRA). Unlocking productivity gains will requirenew thinking, new approaches to public spending and strong political leadership. Governments will needto invest in the infrastructure that makes it possible for smallholders to compete in markets. They will needto invest more in research and development that is relevant to farmers working with low levels of inputsin rain-fed conditions, so that new seeds, fertilisers and technologies become available. They will need tostrengthen soil and water management. And, as indicated earlier in this section, more needs to be done tostop speculators buying up large tracts of land.
  • 44AFRICA PROGRESS REPORT 2012In the past two decades, globalisation hastransformed the balance of economic power.Emerging markets like Brazil, Russia, India, China andSouth Africa – the BRICS – are increasing their sharesof world income, trade and investment, and theirinfluence in global economic governance.What do these changes mean for Africa? The regionhas benefited from its deepening ties with emergingmarkets. Trade with China helped insulate Africancountries from the full impact of the 2008 financial crisisand was instrumental in fostering a strong recovery.The European Union, still Africa’s largest market, islocked into a cycle of austerity and low growth.Recovery in the United States remains fragile. So theBRICS are likely to figure with growing prominence inAfrica’s economic renaissance.Deepening interdependence with emergingmarkets comes with risks attached. The economiesof emerging markets are themselves intertwinedwith those of Europe and the United States, so Africais still vulnerable to the effects of a slowdown in theadvanced economies.But above all, the global economic shifts offer Africaenormous opportunities for economic transformationand a more resilient pattern of economic growth, aslong as the region can enter higher value-added areasof trade. For that to happen, African governmentsand companies need to broaden and deepen theregion’s links to economic markets beyond China,and beyond the unprocessed minerals that dominatecurrent trade with the BRICs. Governments will needto do more to create an enabling environment forcompanies and agricultural producers, by focusing oninfrastructure, regional integration and productivity.And they will need to encourage forms of investmentthat transfer the skills, technology and know-how thatenhance competitiveness (Box 6).The trade policies of emerging markets – includingChina – may be reinforcing dependence onthe export of low value-added products. Africacontinues to face significant tariff and non-tariffbarriers in these markets. The IMF estimates theaverage import tariff faced by low-income countriesin Africa and elsewhere in the BRICs at 13 per cent –around three times the level in the United States andthe European Union (which also operate a range ofnon-tariff barriers)57. Tariff escalation, whereby dutiesrise with the degree of processing undertaken, is alsoa constraint on the export of higher value-addedproducts to the BRICs, including in categories suchas coffee, other agricultural produce, knitwear andfootwear. This is a practice that actively discouragesexports of higher value-added products. Reformingtrade preferences to allow comprehensive tariff-free export, more flexible provisions on rules of origin,and the elimination of tariff escalation as well as ofnon-tariff barriers could generate significant benefits,supporting efforts to strengthen the employment-generating effects of economic growth.As Africa’s main trading partner, the European Union(EU) has a critical role to play in making trade a morepowerful engine of development. While there aresome residual market-access issues to be addressed– notably concerning Europe’s cumbersome rules-of-origin arrangements – these are not the primaryproblem. The EU already allows duty-free marketaccess for ‘everything but arms’ for 33 countries.Where Europe has been less effective is in usingdevelopment assistance to strengthen the capacityof African producers – especially smallholder farmers– to take advantage of export opportunities, notablyby supporting the development of transport andmarketing infrastructure.Another concern is the EU’s approach to negotiationson ‘economic partnership agreements’ (EPAs).With the expiry of existing World Trade Organizationwaivers allowing for preferential trade, the EU isseeking to make preferential access conditional onreciprocal liberalisation measures in Africa itself. Thisis a new departure – and one that has the potentialto do considerable damage. Some of the areas inwhich the EU is pressing for liberalisation through theEPA negotiations – including investment, competitionand public procurement – go beyond WTO rules, andhave been rejected by developing countries in theDoha Round of trade negotiations. More broadly,Africa is being asked to eliminate or lower tariffs on80 per cent of imports from the EU. Leaving aside thecase for and against trade liberalisation in general,there are legitimate concerns on the part of Africangovernments that premature liberalisation throughthe EPAs could result in small firms and smallholderfarmers facing competition from far more developedindustries and heavily subsidised farmers in Europe.3. Tectonic shiftsin economics andpoliticsthe rise of the emergingpowers
  • 45Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeBOX 6: Global economic governance in fluxThe rise of the BRICs and emerging markets is fundamentally changing global economic governance. Thesechanges matter for Africa because they will have a bearing on the region’s voice in global dialogue, onissues ranging from reform of the IMF and the World Bank, to trade and climate change.Despite recent reforms, advanced economies continue to dominate the governance of the IMF and WorldBank. The G8 provides a forum for dialogue and is the main source of international aid, and its membersare major players in world trade, but G8 summits carry less weight and authority than they did 10 years ago.While the BRICs lack an institution, dialogue between their governments has intensified and the G20 hasemerged as the more representative global economic forum.These changes have not been entirely positive for Africa. Whatever its wider shortcomings, the G8 playeda role in launching and mobilising new resources for global health funds, reducing Africa’s debt, and –notably at the Gleneagles summit – securing increased commitments of aid. Several African leaders playedan important role in shaping a distinctive G8 development agenda. Indeed, a case could be made thatinternational development was the one area in which the G8 made a real difference. While the G20 is amore representative and, in the eyes of many, more relevant body, it has yet to articulate a compelling,autonomous and strategic development agenda. South Africa is the only African country with a place atthe table.If Africa is to avoid marginalisation in the emerging G20 processes, the region’s leaders will have to makethe case for broad-based participation (rather than elevated observer status) and articulate an Africanagenda. It may be that the African Union should be delegated a representative role, along the lines ofarrangements for the European Union. One area in which the G20 could make a difference is in approachesto infrastructure financing through public–private partnerships.African governments need to review their strategies for engagement in other areas of global economicgovernance. As President Jacob Zuma of South Africa pointed out at the 2011 G20 summit, the voice andparticipation of Africa in the affairs of the IMF remains muted58. This is a matter of great concern. Followingthe financial crisis, the IMF has expanded its programmes in low-income countries – resource flows coulddouble by 2014 to $14 billion. Africa has already received significant increases in IMF financing throughfacilities created after the crisis. Yet African governments have little voice in shaping these programmes, orin auditing their effectiveness and results. Reforms are long overdue. Following a precedent set by the WorldBank, many African governments want the region to be given a third chair on the Executive Board. Theyhave also called for independent auditing and accountability mechanisms.The international trading system poses a different set of governance challenges. While the WTO has a morerepresentative governance structure than the IMF, many African countries lack the capacity to operateeffectively in the system. No African country has to date had recourse to the WTO’s Dispute SettlementMechanism. The protracted Doha Round of negotiations has delivered at best marginal benefits for Africa.Part of the problem is a lack of capacity. With small trade missions and limited access to legal and technicalexpertise, African countries are often poorly placed to advance their trade interests.Climate change negotiations represent another area in which the emerging balance of power in globalgovernance has not brought obvious advantages for Africa. Before the Conference of the Parties (COP-17)dialogue in Durban, South Africa, in December 2011, there was little progress towards what most Africangovernments see as the twin requirements for any meaningful agreement: a legally binding frameworkon mitigation; and financing for adaptation. The meeting in Durban galvanised African governments todevelop coalitions spanning the traditional “North versus emerging market” divide on mitigation. They alsoachieved some success in pushing adaptation up the agenda, though the results remain uncertain. Oneway in which Africa could strengthen its voice might be by developing regional plans for adaptation –building on national priorities – that can be submitted for early financing.
  • 46AFRICA PROGRESS REPORT 2012This explains why only around 10 out of 47 Sub-SaharanAfrican countries have so far signed EPAs, and whytrade ministries across the region have urged the EUto adopt a more flexible stance.Looking beyond the policies of the region’s tradepartners, African governments themselves need toattach greater priority to trade policy. Exploitingthe opportunities created by increased demandand higher prices for unprocessed agriculturalcommodities and minerals is not a trade policy.Successful developing countries in East Asia andelsewhere have sought actively to promote entryinto higher value-added export markets, and tobuild dynamic linkages between the export sectorand domestic markets. In the case of Africa, there isan urgent need to integrate trade policy into widerstrategies aimed at raising productivity, expandingmarket opportunities for smallholder farmers and smallfirms, and creating jobs.Managing integration with emergingmarketsEmerging markets have figured with increasingprominence in Africa’s economic recovery. Thevalue of Africa–BRIC trade has grown nine-fold overthe past decade. China’s share of Africa’s exportshas increased from a mere 1 per cent to about 15per cent in just one decade59. The latest figures showthat trade between China and Africa reached $160billion in 2011, up by 28 per cent from the previousyear (figure 14).In 2011 South Africa exported R90.2 billion to China,R42.7 billion to Germany, R29 billion to the UK, R12.9billion to Italy, and R6.3 billion to France60. Whilethe EU and the United States remain importantmarkets, the BRICs now account for an increasingpercentage of Africa’s exports, with China aloneaccounting for 18 per cent. The share of the region’sexports going to OECD countries fell from 70 to 50per cent over the past decade – a trend that showsno sign of slowing.Africa has also attracted significant amounts of inwardinvestment from the BRICs. Most of this originates inChina, though India has also grown in importance.Chinese investment flows have been highly volatile,reflecting the timing of large-scale projects. They rosefrom around $70 million in 2003 to $5.5 billion in 2008– around one-third of China’s global foreign directinvestment (FDI) outflows in that year – before fallingback to $1.1 billion in 2009. Most of the 2008 spikewas attributable to the purchase of a stake in theStandard Bank in South Africa. Apart from South Africa,in descending order of scale the largest recipients ofChinese investments have been Nigeria, Zambia, theDemocratic Republic of Congo, Niger, Madagascarand Ethiopia.Oil,oresandmineralsaccountfor90percentofexportsto China. Imports are dominated by manufacturedgoods, with machinery and transport equipmenttopping the list. Most Chinese FDI is geared towardsextractive industries, with the oil sector accounting forabout 70 per cent of cumulative commitments, or $7billion. According to IMF–World Bank data, between2003 and 2007 Chinese companies were involved in81 projects in 25 African countries61.With the rise of emerging markets set to continue,governments and companies across Africa needto consider carefully how best to build on thefoundations of what has been achieved. They needto identify strategies to increase the benefits thatcome with deeper integration while managing theaccompanying risks.One of these risks is a simple by-product of greaterinterdependence. Today, Africa’s growth prospectsare so closely correlated with exports of raw material toChina that any downturn in demand from that sourcewill have strong spillover effects. For all the strength ofthe Chinese economy, a significant slowdown cannotbe ruled out. China’s own export dependence makesthe economy susceptible to conditions in the UnitedStates and Europe, which together account for nearlyhalf of its total exports. China’s vulnerability to externalshocks was underlined during the financial crisis, whenonly a huge credit and fiscal stimulus sustained growth.It is not clear that Chinese policymakers would havethe same tools at their disposal in the event of anotherdownturn.None of this is to suggest that Africa should weakenits ties with China. But governments should be seekingfurther to diversify trade and add value, and tocooperate with Chinese companies and investors inestablishing linkages to wider markets. There may belessons for Africa in the pattern of Chinese economicdevelopment (Box 7).
  • 47Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeWhatever their past benefits for economic growthand employment creation, current patterns oftrade could trap Africa in areas of low value-addedproduction with limited scope for the productivitygains needed to sustain high growth, generateemployment and raise living standards. Currentpatterns of FDI are focused on quick-profit-yieldingmining industries, especially oil, in countries suchas Angola. Unless FDI can be directed also intothe processing of primary products into exportablemanufactures, the persistent enclave-typedevelopment of the mining and other extractiveindustries will persist in the foreseeable future. It iswell known that these “island economic activities”have very little forward and backward linkages withthe rest of the economic sectors of host countries.Exports to China and other emerging markets areeven more overwhelmingly dominated by mineralsand primary commodities than exports to traditionalmarkets. Africa needs to grow out of this exchangemodel.In general, trade policies should occupy a moreprominent place on Africa’s economic agenda aspart of a wider strategy aimed at raising productivity,generating employment and creating the conditionsunder which Africa’s companies and farmers canenter higher value-added markets. The growthof industrialisation and related tertiary activitieswill require removal of the discriminatory tradearrangements under the Partnership Agreementswith the European Union and the African Growthand Opportunity Act (AGOA) with the United States.Furthermore, a more balanced trade relationshipbetween African countries and the emergingmarkets is critical.BOX 7: Can Africa replicate China’s transformation?What elements of China’s successful economic strategy over the past 30 years might be relevant to Africa’sdevelopment? That was the main question posed by the China–DAC Study Group on Poverty Reduction andGrowth – established in 2009 by the International Poverty Reduction Centre in China and the DevelopmentAssistance Committee of the OECD – in its 2011 report, Economic Transformation and Poverty Reduction:How it happened in China, Helping it happen in Africa.The basis of China’s success, the study concluded, has been a vision of economic and social transformationwithin a generation, backed by political leaders ready to support reform and make decisions on a pragmatic,performance-oriented basis. Economic transformation has been driven by incremental policies, respondingto evidence on what works, to changing capacities, and to opportunities in the global economy.The African context is very different from that in China. The global context has also shifted dramatically,not least because of China’s emergence into the global economy. An African transformation in the early21st century will not look like the Chinese transformation. Rising commodity prices and affordable newcommunications technologies are working in Africa’s favour, but generate new demands for accountablegovernance and open societies in Africa. At the same time, key generic features of China’s success arereplicable in Africa. These include the scope for the development of a strategic vision backed by politicalleadership and pursued through practical policies. There are also lessons to be drawn from China’s focus onsmallholder agriculture and rural enterprise as the foundation for a wider development process.Chinese participants noted that China’s transformation process should not be idealised. Many problemshave surfaced over time, as the acknowledged need now for corrective rebalancing across economic,social and environmental fields indicates.
  • 48AFRICA PROGRESS REPORT 2012Integrating Chinese finance withdevelopment goalsThe role of the BRICs in investment activity anddevelopment finance is another area that meritsconsideration. Unfortunately, debate on this issueis sometimes clouded by the adoption of highlypolarized positions, notably with respect to the role ofdevelopment finance from China.OECD donors often maintain that China’s approachto aid and investment in Africa is guided solely bycommercial self-interest. Unlike traditional donors whoare concerned to alleviate poverty, so the argumentruns, Chinese financing is used to promote commercialadvantage. China’s retort is that its policies are gearedtowards creating growth as opposed to building aiddependency – and that it is responding to the prioritiesset by African governments. Indeed, the USA haspublicly stated that aid is a tool of foreign policy.Some of the confusion surrounding the role of Chinesedevelopment finance in Africa derives from amisunderstanding of how support is delivered. Chineseagencies do not draw hard and fast distinctionsbetween aid, concessional loans and foreigninvestment. Most of their development finance inAfrica is delivered in the form of a mixed package, withaid forming a small component. By comparison withOECD-DAC donors, China has a small aid programmein Africa. The major sources of finance are not thesegrant and interest-free loan programmes, but Chinesecompanies and banks, notably the Export–Import(EXIM) Bank and the China Development Bank (CDB),which also manages the China–Africa DevelopmentFund (CADF) that supports Chinese companies doingbusiness in Africa.This elaborate financing architecture has createda complex patchwork of arrangements. In Zambia,there are 60 Chinese companies involved in aneconomic zone facility on the copper belt, anchoredby a range of financing arrangements linked to thedevelopment of new smelting facilities. Infrastructureloans to Ethiopia and Angola have includedconcessional financing secured against future exportearnings. In the Democratic Republic of Congo, aidfor social projects – such as the construction of schoolsand hospitals – has been part of a complex financingarrangement for infrastructure development and thedevelopment of mines.Even though Chinese development finance forAfrica has a strong focus on mineral extraction,other activities figure. Infrastructure is a case in point.Chinese rehabilitation of the Benguela railway lineshould help to facilitate trade between Angola, theDemocratic Republic of Congo and Zambia. Railand port facilities in Liberia will facilitate iron-oreexports. Roads financed by China have reducedjourney times from Ethiopia to the port of Djibouti,facilitating the growth of livestock exports; andthey have reduced journey times across East Africato the port of Mombasa. Commercial interest mayhave played a role in specific financing decisions.At the same time, infrastructural weaknesses arean economic-growth bottleneck in Africa. Africa’straditional development partners have tended toneglect infrastructure financing, and have found itdifficult to develop good models of aid-supportedpublic–private financing arrangements.Without understating the very real gains that havecome with Chinese development financing, thestream of benefits could be increased in severalareas by forging a stronger integration betweenfinance and development. For example, effortsshould be made to strengthen the linkages betweenChinese investors and local companies. Africangovernments and Chinese financing agencies couldcreate incentives for Chinese companies to increasethe share of goods and services sourced locally,and to provide training and employment for Africanworkers. In some cases, this has started to happen. InZambia, there are now some 300 Chinese companiesemploying around 25,000 people. The growth ofthe footwear sector in Ethiopia is another exampleof Chinese investment creating jobs and exports.Nonetheless, and despite the scale of investment,the linkages between Chinese and other foreigninvestment and local economies remain weak.This is an area in which constructive dialoguebetween China and African governments couldcreate new opportunities. Like other countries in EastAsia, China has been very successful in governingforeign investment to secure technology transfer,skills development and strong backward linkages tolocal companies. The same is true of several countriesin Latin America, including Brazil and Chile. In all ofthese cases, foreign investment has been managedto facilitate entry into higher value-added areasof production, while at the same time supportingemployment. In the case of Africa, there is littleattempt to integrate foreign investment into widerstrategies for the development of industries andhigher value-added manufacturing. This is true evenfor procurement policy. In Chile, local procurementby foreign investors has reached almost 80 per cent
  • 49Jobs, Justice and Equity: Seizing Opportunities in Times of Global Changein some mines. Compare this with Ghana, where localprocurement is just 46 per cent – and Ghana has a farhigher level of local procurement than countries likeNigeria.The governance of financial flows is another areaof concern. It is in the best interests of Africangovernments and Chinese authorities to maximizetransparency surrounding project arrangements,particularly in the minerals sector because of the largevolume of financing involved. Limited transparency isby no means the sole preserve of Chinese companiesand agencies working in the minerals sector, butcurrent transparency initiatives would benefit fromChinese participation.While China may have a strong record in constructingschools and health centres, little is known aboutwhether these facilities are then served by skilledteachers and health workers. Similarly, traditionalOECD donors and multilateral institutions clearly havea great deal to learn from China on infrastructuredevelopment and financing. In both areas, a joined-up approach would deliver stronger results.Creating the wider conditions forgrowthThe balance of opportunity and risk associated withties to the BRICs cannot be viewed in isolation.African governments need to create the widerconditions for the sustained growth and entry intohigher value-added markets upon which successin international trade has to be based. This is nota matter of “picking winners” on a company-by-company basis, but of creating the incentives andsupport systems through which companies andfarmers can establish a competitive foothold.As discussed in detail in our annual report lastyear62, poor infrastructure development remains ahuge barrier and a major constraint to investmentand international competitiveness, required forrapid and sustained economic growth and socialtransformation with equity. Shortages of power andhigh transport costs far outweigh the effects of tradebarriers in other countries. The infrastructure gapbetween Africa and emerging markets is growing,creating cost disadvantages for African exporters andhampering market development for Africa’s farmers.Transport costs in eastern Africa are estimated tobe six times higher than in India; and almost 60 percent of businesses surveyed in one recent assessmentidentified inadequate supply of electricity as a majorconstraint to business operations63. Africa will need aninvestment in infrastructure of around $98 billion peryear over the next decade.Some countries are starting to address theinfrastructure deficit. Senegal is upgrading its energyand road infrastructure with a view to becominga regional hub. The government of Kenya hasissued infrastructure bonds on a pilot basis aimedat financing the large up-front costs of investmentwhile spreading repayment over time. The AfricanDevelopment Bank (AfDB) is playing a more activerole in leveraging infrastructure finance. Yet thisremains an area in which broader and deeperpublic–private partnerships are needed to mobiliseresources on the required scale.Fostering regional integration would enhance broaderprospects for trade. Larger trade groupings offeradvantages in terms of market size, specialisation andlinkages to wider markets. One encouraging exampleis the East African Community (EAC). The five membercountries – Burundi, Kenya, Rwanda, Tanzania andUganda – represent a market of 135 million people,with a total GDP of $80 billion. Intra-regional trademore than doubled between 2004 and 2008, reaching$1.8 billion64. Governments are currently exploringthe potential for developing a monetary union tofacilitate trade integration. There are plans to establisha Continental Free Trade Area by 2017, endorsed atthe January 2012 African Union summit.The experience of the EAC is instructive because ithighlights the potential for intra-regional trade tosupport wider trade growth. In contrast to the rest ofAfrica, where the main driver of export growth hasbeen China, some of the fastest-growing marketsfor EAC members have been in the Middle East andNorth Africa, with semi-processed goods figuringmore prominently.Increased productivity is a first-order requirement forentry into higher value-added markets. Investing ina better-educated and more skilled workforce cancreate the human capital base needed to penetratethese markets, attract the right type of foreigninvestment and fuel innovation.
  • 50AFRICA PROGRESS REPORT 2012CHINA-AFRICABilateral Trade VolumeChina has bilateraltrade agreements with45 African countriesBy July 2010, zero-tariffAfrican products increasedto 4,700 taxable items(covering 95% of the totaltaxable items mentionedin Chinese Import andExport Regulations)LDCs of Africa thathave diplomaticrelations with Chinahave zero tariffs onsome of their exportsto China since 2005The value of Africa-BRIC trade has grownnine-fold over the past decade120100US$billion806040200China’s Exports to AfricaImports from AfricaChina-Africa Total Trade VolumeCHINA-AFRICA TRADEchina’s investment in africainflows of fdi from china to ssa SECTOR COMPOSITION OF CHINA’S INVESTMENT IN AFRICA BY END OF 2009more factsUS$12.14millionUS$100millionUS$1billionUS$10billionUS$115billion1950 1970 1990 20101960 1980 20002000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Ministry of Commerce PRC website, Standard Bank and Standard Chartered 2012.Source: IMF, Regional Economic Outlook, 2011 Source: IMF, Regional Economic Outlook 2011 (data, Chinese authorities)Note: The figure covers both Sub-Saharan and North AfricaSource: Ministry of Commerce PRCwebsite, Standard Bank and StandardChartered 2012.PercentofFDIInflows2003 2005 2006 2007 2008200420151050Mining 29.2%Others 3.4%Agriculture, forestry, animalhusbandry and fishery 3.4%Manufacturing 22%Construction 15.8%Financing 13.9%Commercial services 5.4%Wholesale and retail 4%Scientific research, services andgeological prospecting 3.2%US$160billion20112010 2011140China is set tobecome Africa’slargest exportdestination in 2012Last year, China accountedfor 18% of Africa’s trade(up from 10% in 2008)Last year, Africa sourcednearly 17% of its importsfrom China(up from 4.5% in 2002)Africa and China’s growingpartnershipFigure 14:
  • 51Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeAfrica is increasingly being seen as the newfrontier for information and communicationstechnologies (ICTs). The exponential growth ofmobile telephony has opened up new possibilitiesfor entrepreneurship, giving citizens more say andmaking public service delivery more responsive,improving the lives of millions of people. Becausetechnology is associated with high foreign directinvestment, many countries consider it an essentialcomponent of any growth and developmentstrategy.ICTs hold huge potential to help Africa leapfrogover infrastructure insufficiencies and other barriersthat rich nations had to overcome on the path todevelopment. At the same time, the potential oftechnology should be set in the context of widerchallenges facing Africa. This section highlightspromising trends and examples of successful use oftechnology in different sectors.Towards an African agenda forscience, technology and innovationAfrica needs to define and pursue an agenda forharnessing the power of science, technology andinnovation (STI) to transform societies and economies.ICTs will figure prominently in this agenda, but formby no means the only sector in which innovation isneeded. Others include: biodiversity, biotechnologyand indigenous knowledge; energy, water anddesertification; material sciences, manufacturing,laser and post-harvest technologies; mathematicalsciences; and information, communication andspace-science technologies65.There are signs that Africa’s leaders are committedto grappling with the innovation challenge. In2008, President Ellen Johnson Sirleaf of Liberiatold delegates at a Science in Africa summit: “Nocountry on earth has developed without deploying,harnessing and utilizing S&T, whether throughtechnology transfer or home-grown solutions.”66InJanuary 2007, the African Union adopted an AfricanScience and Technology Consolidated Plan ofAction, while in 2010 the African Technology PolicyStudies Network, a group of experts, launched anAfrican Manifesto for Science, Technology andInnovation. Tanzania recently announced that anew science and technology policy would soon bepassed into law. Yet recognition of the link betweenSTI and Africa’s transformation has not been matchedby the required investment, and the institutionalinfrastructure needed to develop and implementnational STI strategies remains woefully weak.A related challenge is to build the necessarycapacity. As President Paul Kagame of Rwandahas emphasised, unless Africa invests in building itsscientific and technological training capabilities,it will “remain an impoverished appendage to theglobal economy.”67Africa must not simply replicate technologiesdeveloped elsewhere and hope that they will work– or become a dumping ground for redundanttechnologies. Africa’s decision-makers must put inplace policies that will enable their citizens to ridethe next wave of technological change, and not besubmerged by it.4. Science, technologyand innovationfuelling growth anddevelopment
  • 52AFRICA PROGRESS REPORT 2012ICTs continue to exceedexpectationsOver the last decade, internet usage in Africa hasincreased by over 2,000 per cent. Sub-SaharanAfrica has progressed from having one underseafibre optic cable in 2000 – connecting just onecountry, Djibouti to another continent – to having12, with 6 more planned68. As a result, accordingto the International Telecommunications Union(ITU), between 2005 and 2010 international internetbandwidth in Africa increased more than 20-fold,with the biggest growth spurt registered between2009 and 2010. Even more impressive is the rate atwhich mobile telecommunications are growing.In 2011, Africa became the world’s second-largestmobile market behind Asia – and the fastest growing.There are over 500 million mobile phone subscriberson the continent, more than double the 246 millionsubscribers in 2008. By 2015, more people in Sub-Saharan Africa will have access to mobile networksthan to electricity in their homes69.Mobile access is particularly significant because itsadvantages compared with fixed lines extend tobroadband connections. New fourth-generationtechnologies, including Long-Term Evolution (LTE),part of the GSM family, can transmit much moredata, much faster, than current 3G broadbandtechnologies – and exceed many fixed broadbandtechnologies, with a simple architecture that lowersoperating costs70. Given the penetration of mobiletelephony in Africa, mobile broadband subscriptionshave significant scope to grow from a low basetoday, meaning that with basic smartphones moreand more Africans will be able to access and usea range of internet applications, including cloudcomputing (Box 8).BOX 8: Can cloud computing serve development?Cloud computing, which has emerged as a major trend in ICT over the last two years, offers Africa significantopportunities to improve business, government and social services. In particular, it allows ubiquitousaccess to applications and services from low-cost internet devices. Cloud computing was first targetedat consumers, enabling them to access email, pictures and social networks from any internet device. Assecurity improved, cloud-based systems provided new ways to deploy business and government services,such as the M-Pesa banking service in Kenya. A cloud-based system can significantly lower the cost andtechnical expertise required to operate an internet service, as the software and much of the hardware isdeployed and maintained by the system provider rather than the enterprise71. Cloud computing also shiftsthe need for computing power and storage from the device to the network, lowering the cost of accessdevices. As a result, the benefits of cloud services may be particularly pronounced in helping developingcountries to overcome challenges in connectivity.
  • 5353Improving social accountability andservice deliveryBy lowering costs, improving quality and facili-tating access, ICTs can contribute to econom-ic growth and social progress by fundamen-tally transforming industries such as banking,agriculture, education and health care. ICTsare also increasingly being used to push forimproved service delivery, social accountabil-ity, transparency, and governance.HUDUMAIndependent monitoring organisations have collaborated with ICTexperts to develop HUDUMA, a web- and mobile-based platform thathelps citizens to push for better social accountability and service deliveryby channeling their concerns directly to authorities for redress using SMS,voice messaging and video.Ghana DecidesGhana’s general elections are coming up in December 2012 and for thefirst time ever, the country is implementing biometric voter registration. Tohelp publicize the process, correct misconceptions and increase overallattention about the elections, the non-partisan project Ghana Decideshas turned to social media.Developing mobile bankingExclusion from formal financial services is veryhigh in Africa but with the rapid growth of mo-bile phones on the continent, mobile bankingis regarded as a great opportunity to providethe unbanked with such services. Branchlessmobile banking services enable householdsto save, pay bills, and transfer money throughtheir mobile phones.M-PESAOne of the most talked-about ICT success stories in Africa is Safaricom’smobile money transfer service, M-Pesa, in Kenya. In 2006, only 19 per centof Kenya’s 35 million people had access to bank accounts. In the five yearssince M-Pesa was launched in 2007, over 40 per cent of Kenyans haveused the service. In 2010, an estimated $7 billion (the equivalent of 20 percent of Kenya’s GDP) was transferred through M-Pesa. According to a2011 Standard Bank report, the incomes of rural households in Kenya haveincreased by five to 30 per cent since they began using mobile banking.Enabling farmers to interact withmarket informationAfrican farmers face numerous challenges on adaily basis, most of which have been aggra-vated by changes in the climate. Ever resource-ful, many farmers have embraced ICTs as a wayof improving their productivity by accessingtimely, comprehensive agricultural information.Esoko Commodity IndexGhana’s Esoko Ghana Commodity Index (EGCI) is a cash market priceindex composed of data on physical commodities. The index, which ispublished weekly by the company, tracks prices at wholesale and retaillevels and enables consumers to get prices of agricultural products inreal time by texting through SMS codes.Improving access to learningIn the education sector, ICTs can contribute touniversal access, equity, the delivery of qualitylearning and teaching, teachers’ professionaldevelopment and more efficient manage-ment, governance and administration. ICTs arealso enabling education providers to competewith traditional education institutions by reduc-ing the importance of geographical distanceas a barrier, lowering overheads and logisticalrequirements, and expanding cheap access toinformation resources.NEPAD e-Schools InitiativeThe NEPAD e-Schools Initiative is a multi-country, multi-stakeholder,continental initiative, which intends to impart ICT skills to young Africansin primary and secondary schools and to use ICT to improve the provisionof education in schools. The initiative aims to ensure that African youthgraduate from African schools with the skills they will need to participateeffectively in the global information society.Bolstering health systemsAccording to the World Bank, ICTs could be a“game changer” in health in Africa, helpingto increase the availability of equipment andsupplies, skilled healthcare workers, healthsystem infrastructure, as well as communica-tion between rural and urban centres. ICTs canalso facilitate efforts to educate communitiesand populations about the prevention andtreatment of diseases.mPedigreemPedigree is a platform that combines mobile technology and cloudcomputing to fight counterfeit medicines by providing free access to aninstant drug quality verification system via text messaging in Africa andSouth Asia.PesinetPesinet is a system that combines local resources and mobile technologyto increase care and reduce child mortality in Mali.ICTs for social and economicdevelopmentFigure 15:Source:APP2012.
  • 54AFRICA PROGRESS REPORT 2012Last year the world was swept by a widespreadand fast-moving wave of social protest. Our mapon page 56-57 shows the breadth of causes that aredrawing people into the streets – but also highlightswhat unites many social protests. Shared anger overinequalities seen as unfair and unjust, concern overyouth unemployment, and frustration with corruptand unresponsive governments are pushing people tolook beyond traditional politics. What drives them toact is a conviction that change from below is possible.It is unclear whether social protests are transformingthe relationship between citizens and states acrossthe world. There is, however, another side to this story.Citizens’ action and engagement can promote moresustainable development outcomes. Across Africa,there is growing evidence that citizens are demandingmore accountability from their governments72. In thissection, we examine whether global social protestsare resonating in Sub-Saharan Africa and how citizensare participating in enhancing transparency anddemocratic governance.Global social protestsIn the developed world, the fall-out from the globalfinancial crisis has fanned the flames of socialprotest. Protestors tapped into a deep reservoir ofpublic anger over disparities of wealth, the salaries offinanciers and the failure of governments to regulatethe financial sector. In the United States, the OccupyWall Street movement captured public anger overthe bailout of banks and rising inequality with a simplephrase: “We are the 99 per cent.” Young Spanishindignados marched against austerity measures,spending cuts and youth unemployment behindbanners emblazoned with the words “A Europe for itscitizens.” Having studied hard, they see no prospectof finding fulfilling employment themselves – while thebankers who caused the crisis enjoy bonus packagesthat remain at pre-crisis levels.The protests of last year often reflected the importanceof culturally driven notions of fairness and justice.Protestors in Tahrir Square borrowed the slogan “bread,jobs and social justice” from their counterparts in Tunisia.In China’s southern Guangdong province, it was aresponse to perceived injustice that led the villagersof Wukan to demonstrate against local governmentofficials orchestrating land theft. And it was angerover government inaction in the face of corruption,a pervasive source of injustice, which led millions ofpeople to demonstrate in India. Across the world, socialprotest emerged in countries where the political systemand electoral processes were seen as serving vestedinterests rather than the public interest in fairness.The Arab Spring changed a region. As Eugene Rogancommented in the postscript to his 2010 book, TheArabs: “With the revolutions of 2010, the Arab worldentered a new age of citizen action for humanand political rights that endowed the region with anewfound sense of dignity and common purpose.” Butwhat does the rise of citizen protest in an era of masscommunications mean for Africa? How will the socialmedia – text messaging, email, social networking,tweeting and streaming – play out in African politicalprocesses and service delivery?Citizens’ participation in enhancingdemocratic governanceAfrica will not duplicate the Arab Spring but asthe region’s networked population expands,there will be more opportunities to engage in politics,take collective action and challenge authoritariangovernments. Africa’s citizens are finding many waysto be heard, but with mixed results. Movements forsocial and political accountability are gaining groundthrough demands for better service delivery anddemocratic leadership. Evidence across Africa showsthat citizens’ engagement in policy-making canlead to better diagnosis of problems and improveddesign and implementation of solutions73. Many toolsand methods now exist that enable citizens to holdtheir governments accountable and governments toengage citizens, including citizens’ report cards, openbudget processes, community monitoring of servicedelivery and expenditure tracking surveys.The evolving picture of democratic leadership in Africa,however, is not always positive. New constitution-making initiatives present an opportunity to correctelectoral systems and create a foundation for inclusiveand democratic governance but there is often a failureto identify what gives meaning to a “national identity”or the notion of “citizenship” and equity (see Part III).Social media, which can facilitate both accountabilityand protest, have played a smaller role in Africa thanin other regions. The networked population is smaller,the communications landscape is less dense and – ina major contrast with the Arab world – unemploymentis less widespread among educated youth. But civilsociety across Africa is heading up the social-medialearning curve (Box 9).5. The rising tide ofcitizen action
  • 55Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeBOX 9: Social media – the new tools of democracy?The street protests that rocked Nigeria in January 2012 could be the face of the future. One day after thegovernment announced plans to withdraw subsidies on fuel, youth groups from all over Nigeria formed anonline coalition called Enough is Enough, which mobilised, organised and shared information about protests.The Occupy Nigeria Facebook page provided a focal point for thousands of activists using Twitter and othersocial media, with its “citizen journalists” recording and reporting on alleged human rights violations. The speedand spontaneity of the emergence of online activism by networked youth took the government, oppositionparties and labour unions by surprise. Furthermore, one of the most striking features of the movement was itsmake-up. Enough is Enough draws support across all regions, language groups, religions and ethnic groups.If Twitter is a measure of networking, there are signs that Africa is coming of age. A recent survey found thatSub-Saharan Africa registered over 9 million tweets in 2011. Just over half of the total was recorded in SouthAfrica, but Kenya registered 2.4 million and Nigeria 1.6 million tweets, and tweeters were also very active inMali, Rwanda and Cameroon. Africa’s tweeters are predominantly young and middle class, with over 60 percent aged 21 to 29. More than two-thirds of connected Africans use Twitter to monitor news. The two biggesthashtag trends: “revolution” and “elections”.In some cases, youth groups have sought to use social media to combat group-based violence. After the2007 election, some Kenyans used mobile technology, mainly SMS, to spread fear, incite violence andorganise attacks. Sisi Ni Amani (“We are Peace” in Swahili) was founded in July 2010 to use mobile phonesto promote peace. Subscribing community members receive free text messages on civic engagement andpeace promotion. All of the messages that go out are moderated and created by local civic leaders andpeace groups. The network in Kenya is now almost 20,000 strong. One of its aims is to prevent violence in therun-up to the 2013 elections.CIVIC ACTIVISM, FREEDOM AND CORRUPTIONHigher levels of civic activism are strongly correlated with better control of corruption. Countrieswith the highest levels of civic activism are all considered‘free’by Freedom House, meaning that they havedemocratic institutions and the protection of civil liberties.Source:APP,datafromtheInstituteforSocialStudies,theFreedomHouse2011ReportandtheTransparencyInternationalReport2011.*Civic activism is measured using an index published by the Institute for Social Studies (www.indsocdev.org), which takes a range of items thattap the strength of civil society, including: surveyed levels of participation in boycotts, demonstrations, and petitions; newspaper circulation; andmembership of international NGOs.BelgiumBeninBotswanaBrazilCanadaCape VerdeCroatiaDenmarkFranceGermanyGhanaIndiaJapanSouth KoreaMaliNamibiaNetherlandsNew ZealandNorwayPolandPortugalSão Tomé and PríncipeSlovakiaSloveniaSouthAfricaSpainSwedenSwitzerlandTaiwanUnited KingdomUnited StatesBurkinaFasoBurundiChadComorosGuineaKenyaLesothoLiberiaMadagascarMalawiMoroccoMozambiqueNigerNigeriaQatarSenegalSierra LeoneTanzaniaTogoTunisiaTurkeyUgandaZambiaAlgeriaAngolaBahrainCameroonChinaDRCCongoCôte dIvoireDjiboutiEgyptEritreaEthiopiaGabonGambiaIraqJordanLibyaMauritaniaBurmaOmanRussiaRwandaSaudi ArabiaSudanSwazilandSyriaUnitedArab EmiratesZimbabwe0.350.40.450.50.550.60.650.70.75123456789Civicactivism2010*More corruptionLess corruptionMorecivicactivismLesscivicactivismNot freePartly freeFreeFigure 16:Corruption Perceptions Index
  • 56Mohamed Bouazizithe man who sparked a revolutionMohamed Bouazizi was born and raised in the central Tunisiantown of Sidi Bouzid [*]. He earned a precarious living, and helpedsupport his mother and siblings with the proceeds of his vegetablecart. Unable to afford the bribes needed to secure a permit onDecember 17, 2010, Mohamed Bouazizi had his stock confiscated.When he protested, he was beaten by officials and refused anaudience with the municipal governor. Confronted by corruption,injustice, and public humiliation, Mohamed Bouazizi dousedhimself with paint thinner outside the gates of the governor’soffice and set himself on fire. He suffered burns over 90 per centof his body. He died from his burns on 4 January, 2011. The waveof public protests that followed his death saw President Ben Aliswept from power ten days later and fuelled the uprising in Egypt.*These details on the life and death of Mohamed Bouazizi werereported by journalist Kareem Fahim after extensive interviews in SidiBouzid. “Slap to a Man’s Pride Set Off Tumult in Tunisia,” New YorkTimes, January 21, 2011.SOCIAL UPRISINGalgeria Arab Spring28 December 2010-31 December 2011ONGOINGOccupy London – 15 October 2011-present ongoingLondon anti-cuts march/Protests – 26 March 2011 endednorway occupy movement15 October 2011-presentONGOINGcanada occupy movementOccupyToronto evicted 23 november 2011OccupyVancouver ongoingOccupy Montreal ongoingmexico occupy movement15 October 2011ongoingbrazil occupy movement15 October 2011unknownargentina occupy movement15 October 2011ENDEDnigeria protest2 January 2012-13 April 2012ongoing Tunisia Arab Spring18 December 2010-23 October 2011Government overthrowngabon protest29/01/2011UnknownCôte d’Ivoire Protest28 November 2010-11 April 2011Ended 11 April 2011equatorial guinea protest23 March 2011Bannedchile chileanwinterMay 2011-presentongoingbolivia protestsAugust-October 2011ended in october 2011colombia student protests12 November 2011-presentongoingWestern Sahara arab spring25 February 2011-May 2011Ended in May 2011ireland Occupy Movement (“Occupy Dame Street”)8 October 2011-8 March 2012ongoingbelgium occupy movement15 October 2011-presentONGOINGgermany occupy movement15 October 2011-presentONGOINGunited states occupy movementNewYork/Wall Street – 17 September 2011-present ongoingD.C. – 1 October 2011-present ongoingChicago – 23 September 2011-present ongoingBoston – 30 September 2011-10 December 2011 Occupation ended, protests ongoingOakland, California – 10 October 2011-present ongoingspain M15/Indignados15/05/2011ongoingmauritania arab spring17 January 2011-presentongoingmorocco arab spring20 February 2011-presentsubduedProtest – 10/2011 ENDEDM15/Les Indignés – May 2011 ENDEDfranceunited kingdomThis map shows a selection of social uprisings that took place across the globe in 2011and highlights some of the main triggers to social unrest.MovementsArab SpringStudent protestsOccupy MovementOnline revolutionProtestM15Primary causesEqualityDemocracy (elections; voice; anti-government; global governance; constitutional reform)Prices (food, fuel, housing, etc.)Corruption and corporate greedJobsOtherApprox number of people reported in total0-1,000 1,000-10,000 10,000-100,000 100,000-1,000,000 1,000,000+Figure 17:TRIGGERS TOSOCIAL UNRESTUnemploymentAbsentLabourrightsLow wagesLack of freedomPoor livingconditionsPolicebrutalityHumanrightsviolationPoor/costlyeducationSocialreformFoodinflationLack ofopportunitiesLack of civil rightsAbsoluteMonarchyGovernmentPolitical systemSocialinjusticeEconomichardshipCorruptionInequalityCorporate greedDisregard forwomen’s rightsPovertyLack of democracy
  • 57Source: APP with data from various websites and news sources.South Africa Occupy Movement akaTaking Back South Africa15 October 2011ENDEDgreece 2010-2012 Greek Protests5 May 2010-presentongoingcroatia occupy movement15 October 2011-presentongoingAustria occupy movement15 October 2011ENDEDarmenia Protest19 January 2011-presentongoingAzerbaijan Protest11 March 2011-presentongoingrussian federation Protest5 December 2011-presentongoingitaly rome demonstration/occupy movement15 October 2011ENDEDdenmark Occupy Movement15 October 2011-presentongoingSwitzerland Occupy Movement15 October-15 November 2011Evicted on 15 November 2011. Protests ongoing.jordan arab spring14 January 2011-9 February 2011Ended on 9 February 2011south korea occupy movement14 October 2011ENDEDchina Jasmine Revolution/protest20 February-20 March 2011ENDEDSyrian Arab Republic arab spring15 March 2011-presentongoinglebanon arab spring12 January 2011-presentongoingKuwait arab spring19 February 2011-presentongoingHong Kong, China 1 July Protest (annual)1 July 2011ENDED (annual one day event)myanmar Just Do It against Military DictatorshipMarch 2011-presentongoingmaldives 2011 ProtestMay 2011endedmalaysia occupy dataran30 July 2011-presentongoingdjibouti protest28 January 2011-11 March 2011Ended on 11 March 2011Yemen, Rep. Arab Spring27 January 2011-presentOngoingsaudi arabia arab spring21 January 2011-presentongoingzimbabwe Million Citizen March/protest1 March 2011Preventedbahrain arab spring14 February 2011-presentongoingegypt, arab rep. arab spring25 January 2011-presentongoingaustralia occupy movement15 October 2011-presentongoingnew zealand occupy movement15 October-early 2012Unknownlibya Arab Spring/CivilWar15 February 2011-23 October 2011Ended on 23 October 2011Israel protests14 July 2011-presentongoinguganda Walktowork/Protest11 April 2011ENDEDsudan arab spring30 January 2011-31 December 2011Ended on 31 December 2011
  • 58AFRICA PROGRESS REPORT 2012Today’s patterns of social protest in Africa defysimple classification. In some cases, young peopleare mobilised to support the demands, claims andcounter-claims of competing parties. The youth riotsthat followed the 2010 elections in Côte d’Ivoire wereone extreme manifestation. In Ghana and Senegal,politicians have drawn youth into sometimes-violentpolitical activities. South Africa has seen a surge ofsocial protest since 2009. The focal point has beenservice delivery, though the underlying issues go fardeeper. Some commentators take the view that agrowing number of South Africans – especially theyoung – feel that conventional ways of engaging inpolitics are failing, and that alternatives may be moreeffective.Just as the Arab revolutions took the world by surprisein 2011, there will be unexpected and unpredictabledevelopments in Africa. Like the Arab states, Africahas a demographic bulge. But the differences are alsoimportant. Sub-Saharan Africa does not have a vastpool of educated unemployed. Another difference isthat Africa has established multiparty democracies,albeit fragile, with most countries routinely holdingelections since the 1990s.None of this diminishes the potential for protest. Likeyouth across the world, young Africans have hopesand ambitions. And like any youth, they will respondto political systems that deny them a voice by findingother forms of expression.
  • PART IIIGOVERNANCE FOR ABETTER FUTUREIn governance, as in economics, the story of the pastdecade has been one of steady progress in Africa.Multiparty elections are now firmly established, therehave been moves towards greater transparency, and forthe most part, armies have stayed out of politics. Manycountries have also become more peaceful.
  • 60AFRICA PROGRESS REPORT 2012There have been many reminders that the roots ofdemocracy have to be protected with vigilance,including the March 2012 coup in Mali and theprotracted dispute and violence that followed the2010 election in Côte d’Ivoire. Large pockets of low-intensity conflict are perpetuating instability, and theregion has continued to witness political violence,natural resource conflicts, terrorism, separatismand high levels of crime, including drug traffickingand organised crime. And some old political habitsdie hard, as the responses to the Arab Springdemonstrated.News of that uprising was censored in some countries,withstate-controlledorstate-influencedmediaplayingdown its significance. Some governments respondedto the Arab Spring by restricting the activities of civilsociety organisations – an approach that is likely toprove ineffective and counterproductive.This section looks at four key governance issues:1. Multiparty democracy – playing by the rules2. The changing map of African conflict and instability3. Improving business governance4. Managing natural resources for the public goodMultiparty democracy is now firmly establishedacross Africa, where there were more electionsheld in 2011 than in any previous year. Some electionshave been free and fair; however, many campaignsand voting processes were marred by sporadicviolence and intimidation (Box 10).There have been some less positive developments.Several leaders in Africa have sought and attainedlegislative approval to extend the number of termsin office permitted under constitutional rules. Whilethere is no age limit on political leadership, thereluctance of some long-serving leaders to leaveoffice is a matter of concern. The world’s mostyouthful region has some of its oldest leaders, manyof whom have served for well over a decade. This isnot a sign of political health, especially in countrieswhere there are public concerns about a lackof respect for the rule of law, corruption and themanagement of mineral wealth.The infographic here provides an overview of the twosides of emerging democracy in Africa. It situatesthe multiparty elections that took place in 2011, andidentifies countries whose presidents have beenin office longer than might be seen as healthy in afunctioning democracy.Learning from flawed electionsMultiparty elections are an imperfect measure ofdemocracy and adherence to the rule of law –but they are a necessary condition for both. Africancitizens have fought hard to secure their right toparticipate in free and fair multiparty elections – andthey have cause to remain vigilant.In 2011, the quality of elections in Africa was mixed.In Zambia, the opposition candidate, Michael Sata,won an unlikely victory in the presidential elections,ending the 20-year dominance of the Movement forMultiparty Democracy. The Nigerian elections of 2011were heralded as an advance for democracy, andthe process was seen as a dramatic improvement onthe polls of 2007. However, the election itself fell farshort of international standards. Similarly, althoughelection monitors declared the first round of voting inthe Senegalese presidential election largely free andfair, many people saw the elections as illegitimatebecause the incumbent, Abdoulaye Wade, hadignored mass demonstrations against his decision torun for a third term in office. Wade conceded defeatafter being convincingly beaten in a second roundrun-off by a former associate, Macky Sall – ensuringa transition and sparing Senegal further episodes ofviolence and instability.In Uganda, after clearing the way by changingthe constitution, President Yoweri Museveni heldon to power by a large margin, but the electioncampaign was marred by intimidation, harassment ofopposition figures and the arrest of leading opposition1. Multipartydemocracyplaying by the rules
  • 61Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeBOX 10: Taking the pulse of African democracyBeyond the sphere of elections, several countries had their governance tested during 2011. The decision ofthe International Criminal Court (ICC) to indict six prominent public figures in Kenya for their alleged rolesin the post-election violence in 2008, including two prospective presidential candidates, has far-reachingconsequences. Leaving aside the gravity of the charges, it is a matter of concern that, according to opinionpolls, Kenyans have more confidence in the ICC’s judicial processes than in their own country’s courts. Ona more positive note, Kenya has adopted a new constitution that will give its citizens a far stronger voiceand more deeply entrenched protection for a wide range of civil, political, social and economic rights. Theconstitution’s provisions on “equitable sharing” as a guide for public spending address many of the concernsover inequality raised earlier in this report – and these provisions merit review by other governments acrossAfrica.Reflecting the fallout from the Arab Spring, the annual survey of political rights and civil liberties conductedby Freedom House found a decline in both dimensions in 2011 for Sub-Saharan Africa, especially in “countrieswhere members of the opposition and civil society made pleas for change in emulation of protests in theArab world.”74More positively, eight Sub-Saharan African countries were among the 87 countries in theworld rated free with respect to political rights and civil liberties.The Press Freedom Index 2011–12 by Reporters Without Borders also suggests a widening gap between goodand bad performers in Africa75. There was a marked deterioration in the standing of countries that crackeddown on mass unrest, including Malawi and Uganda. At the opposite end, Niger is being credited with asharp improvement in its media freedom, underpinned by favourable legislation and a public commitmentby its president. Other measurement exercises have been more positive. The NGO Sustainability Index forSub-Saharan Africa, compiled by USAID, found that there had been “more improvement than deterioration”in 2010 (the latest available index) across the seven dimensions assessed, which include the legal andadvocacy environment and financial sustainability76.In its latest Global Trends in NGO Law (June 2011), the International Center for Not-for-Profit Law (ICNL)found that “the number of restrictive laws is on the rise”77. Onerous registration requirements, restrictions onactivities, and limits on foreign-sourced financing are cited as evidence of this backlash against civil societyin several countries, including Ethiopia, Zambia, Uganda and Zimbabwe.candidates. Even in Liberia, where the Nobel Prizewinner Ellen Johnson Sirleaf won a convincing victoryin the presidential election, the campaign processwas dogged by controversy. The main oppositioncandidates accused the government of vote-riggingand boycotted the second round of voting.Recent history cautions against the view thatelections are an automatic source of political stability.In some cases, including Côte d’Ivoire (2000, 2010),DRC (2011), Kenya (2007/08), Zimbabwe (2007) andUganda (2011), elections have been associated witha breakdown of institutional rules and processes.Political competition in these and other cases hassought to mobilise people around the cleavages thatdivide society. The winner-takes-all political systemscan exacerbate underlying social tensions since thelosers may expect to receive little from the state.Power sharing can serve as a welcome pacifier afterdivisive electoral processes. In Kenya, the creationof a unity government quickly ended a bloodyperiod of civil conflict and led to the introductionof a new constitution. In certain contexts, however,power sharing can be manipulated to reinforcehard-line positions, coerce oppositional elementsinto no-win situations and postpone conflicts thatare inevitable.There are good reasons to be concerned about theimpact of multiparty elections on countries with fragilestates and diverse societies. By definition, electionsincrease the level of political uncertainty. The dangeris that incumbents fearing defeat may seek to retainpower by any means. In some countries this hasled to higher levels of corruption, as ruling partiesseek to generate funds for election campaigns. Inothers, it has precipitated electoral violence and therepression of opposition parties and their supporters. Inmost countries, leaders are less closely connected tomilitary forces (Box 11).
  • 62AFRICA PROGRESS REPORT 2012Does the emerging evidence confirm the view ofpessimists who claim that Africa is not ready formultiparty democracy? The answer to that questionis no – but high-stakes elections can magnify socialtensions. Afrobarometer opinion surveys haverevealed that ethnic identification tends to peakaround election time, reflecting the appeals to identityand language used during campaigns78. Directcompetition between parties that represent particulargroups, regions or religions can certainly exacerbateunderlying tensions over issues ranging from land toreligious expression. But the social and political costsof restricting multiparty democracy far outweigh therisks of holding elections. To the extent that a broadlesson can be drawn from recent experience in Africa,this is that governments and opposition leaders needto exercise far greater restraint in their campaigning.Political parties need to extend their appeal beyondthe narrow identities that divide people, to addressthe problems that people share and build a sense ofcommon identity.The bottom line is that rules-based competitionbetween parties offering different visions andpolicies is the life-blood of democracy. That is whycompetition has played such an important role inpolitical liberalisation – and in democratic reformin Africa. Making sure that the opposition’s legalstatus is recognized and protected is vital. Whetheror not they are genuine democrats, oppositionparties are likely to push for political liberalisationbecause a more level political playing field is in theirown interests. In this way, political competition canencourage those excluded from power to invest instrengthening democratic processes, whatever theirnormative beliefs and personal ethics. In Ghana, forexample, the main opposition party campaignedon a number of issues relating to the design ofthe electoral and political system, pressuringthe government into a series of concessionswhich, along with a gradual strengthening of theopposition itself, gave rise to a freer, fairer and morecompetitive political landscape.BOX 11: When military figures hold on to powerSince independence, the military has played a major role in shaping the prospects for stability anddemocracy in Africa. By 1980, more than two-thirds of Sub-Saharan African countries had experiencedsome form of military rule. Following the reintroduction of multiparty politics, however, the political role of themilitary has become less obvious. Almost all governments in Africa are now officially civilian. In the 1970s, themajority of African leaders left power through violent means, such as coups or assassinations; today mosttransfers of power occur constitutionally, through elections or term limits. In many countries, however, civiliangovernments are actually staffed by military figures who have taken off their uniforms but not severed theirmilitary ties. In Angola, Burundi, Namibia, Mozambique, Rwanda, Uganda and Zimbabwe, parties came topower that had previously been liberation armies or military forces, and appointed cabinets that reflectedtheir roots.In many countries, the dividing line between the armed forces and the government has yet to be established.And while some governments have engaged in democratic backsliding, those run by military figures aremore likely to respond to criticism by limiting freedoms, because they come from strongly hierarchicalorganisations.
  • 6363EthiopiaSudanChadLibyaEgyptAlgeriaNigerDemocraticRepublic of CongoNigeriaMauritaniaAngola ZambiaSouth AfricaBotswanaTanzaniaKenyaMoroccoNamibiaTunisiaEritreaSomaliaMozambiqueZimbabweMadagascarMauritiusComorosSeychellesUgandaSwazilandLesothoRwandaBurundiCongoEquatorial GuineaGabonCameroonWestern SaharaMalawiCentralAfrican RepublicSão Tomé and PríncipeGhanaTogoBeninCôted’IvoireLiberiaSierra LeoneBurkina FasoSenegalGambiaGuinea BissauGuineaCape VerdeDjiboutiMaliParliamentary election Referendum Senate electionPresidential election0- 8 years 9 - 15 years 16- 22 years 23- 30 years > 30 yearsHead of State/Government, years in officeSouthSudanSource: APP with data from Election Guide (www.electionguide.org) and from the Electoral Institute for Sustainable Democracy in Africa (www.eisa.org.za)Electoral MAPFigure 18:
  • 64AFRICA PROGRESS REPORT 2012The Arab Spring has profoundly changed howgovernments, analysts and civil society viewsocial protest, as outlined in Part II above. Boththe parallels and the differences with Africa areinstructive. As the events of the Arab Spring unfoldedin early 2011, protests in Sub-Saharan Africabarely registered with the international media, yetdemonstrations took place in 26 countries. Nonedeveloped into comparable mass uprisings, despiteclear similarities in grievances: repressive regimeswith long-serving leaders, restricted civil liberties,widespread corruption, high poverty levels and youthunemployment, and rising food and fuel prices.So why didn’t the Arab Spring spark a more tellingrevolt south of the Sahara? In part, because theunderlying political conditions are very different.Democracy, multiparty elections and politicalfreedom are more deeply embedded in Sub-Saharan Africa. In North Africa, where elections werecarefully stage-managed to secure the re-electionof autocrats, the absence of free and fair pollingbecame a focal point for popular mobilisation. Levelsof education may also have been significant. UnlikeTunisia and Egypt, countries in Sub-Saharan Africado not yet have the large social mass of educated,unemployed youth that shaped the Arab Spring –and social media campaigning is still in its infancy(see Part II).Social protest and violence in Sub-Saharan Africahave taken different forms. While some conflictscontinue to be caused by clashes over resources, analarming new trend is the rise in conflict surroundingelectoral processes (as in Côte d’Ivoire), failedpeace agreements (such as between Sudan andSouth Sudan), and ethnic or sectarian violence (as inNigeria and Somalia)79.There is good news and bad news on conflict.The good news is that the level of armed violenceis diminishing, with Africa’s share of the world’sviolent conflicts falling from 55 per cent in 2002 to24 per cent in 2011. The bad news is that Africa stillaccounts for 23 per cent of refugees and 42 per centof internally displaced people worldwide80. Pocketsof low-intensity conflict are perpetuating instabilityin the region. Meanwhile, people face threats totheir security from political violence and coupsd’état (Niger, Madagascar, Mali, Mauritania, Libya,Zimbabwe), over the conflicts related to control ofnatural resources (DRC, Ethiopia, Nigeria), high levelsof crime (South Africa, Egypt), drugs trafficking andorganized crime (West Africa), terrorism (Algeria,Somalia, Kenya, Mali, Mauritania, Niger, Nigeria),and separatism (Somalia, Mali, DRC, Nigeria,Senegal, Sudan, Uganda). Children and women areparticularly vulnerable – for example, Africa accountsfor two-thirds of the world’s estimated 300,000 childsoldiers, and sexual violence predominately againstwomen and girls accompanies armed conflict.2. The changing map ofAfrican conflict andinstability
  • 6565Violent conflicts in AfricaIn 2002 55% of worldwide violent conflict took place in Sub-Saharan Africa, in 2011 the share had dropped to 24%. Countries emerging from violent conflict haveshown some of the most encouraging examples of development gains. Large parts of Sub-Saharan Africa have become more peaceful, includingWest Africa andparts of the Great Lakes. Many peaceful regions have consolidated even in countries with persisting patches of violent conflict.no violent conflict warcrisis limited warConflicts as defined by Heidelberg Institute for International Conflict Research (HIIK) Conflict Barometer 2011Source: APP with data from the Conflict Barometer 2011 published by the Heidelberg Institute for International Conflict Research (HIIK)World Bank fragile situationTunisiaWestern SaharaBurkina FasoSenegalMozambiqueZimbabweSwazilandLesothoComorosMalawiEritreaSomaliaUgandaDjiboutiCongoEquatorial GuineaGabonCameroonSão Tomé and PríncipeGhanaTogoBeninLiberiaSierra LeoneGuinea BissauGuineaCape VerdeGambiaRwandaBurundiSouth AfricaSudanChadLibyaEgyptAlgeriaMauritaniaMoroccoMaliDemocraticRepublic of CongoAngola ZambiaBotswanaTanzaniaNamibiaEthiopiaKenyaNigerNigeriaCôted’IvoireCentral AfricanRepublicMadagascarMauritiusSeychellesSouthSudanCONFLICT AND FRAGILITYFigure 19:
  • 66AFRICA PROGRESS REPORT 2012Escaping conflictArmed conflict is a major reason for the slow paceof progress towards the Millennium DevelopmentGoals. People in fragile and conflict-affected statesare more than twice as likely to be undernourishedas those in other developing countries, and less thanhalf as likely to have access to clean water. Childrenare three times less likely to be in school and twiceas likely to die before they reach the age of fiveyears. The average cost of civil war is equivalent tomore than 30 years of GDP growth for a medium-sizedeveloping country, with civil wars reducing growthby about 2.3 per cent a year. So it is not surprisingthat so far, no low-income fragile or conflict-affectedcountry has achieved a single MDG81. Violent conflictand civil war are “development in reverse”82.While conflict makes countries and people poorer,the relationship works in the opposite directionalso: countries with lower GDP per capita tend toexperience both large-scale political conflict andhigh rates of homicide. Slow growth, stagnation oreconomic decline also makes a country more proneto civil war. Youth unemployment is consistently citedin citizen perception surveys as a motive for joiningboth rebel movements and urban gangs83.Recent economic growth performance suggeststhat parts of Africa may be pulling out of the conflicttrap as governments and development partnerstackle one of the greatest challenges facing theregion: capitalising on the opportunity created byrising income. Experience has shown that targetedpost-conflict interventions can provide furtherleverage for peace, especially when they restoreconfidence in state institutions. In post-conflictsituations, when it is unlikely that the private sectorwill create jobs quickly, public works programmescan absorb some of the unemployed and restorebasic services. Aid has a vital role to play. ThroughoutAfrica, official development assistance is one part ofan increasingly complex resource equation in whichdomestic revenues, foreign direct investment, trade,remittances, peacekeeping expenditures and illicitoutflows play pivotal roles, and the modalities ofaid delivery have yet to adapt to this. However, aidremains a crucial injection in countries emerging fromconflict: it saves lives, counterbalances economicswings, and can help set a crisis-affected country onthe road to recovery.That is why donors’ failure to seize the opportunityto deliver an education peace dividend in SouthSudan has been so disappointing (see Box 4). Oneof the problems with development assistance inconflict- and post-conflict environments is that it isoften governed by unpredictable and short-termhumanitarian aid budgets. Turning a fragile peaceinto reforms that raise institutional performance andmitigate the risk of a return to violent conflict requireslong-term predictable support84.
  • 67Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeGood business governance is critical not justas a goal in its own right but also as a tool foreconomic growth and job creation. Africa needsgood-quality domestic and foreign investment inorder to enter higher value-added, employment-intensive areas of production. Poor businessgovernance discourages long-term investment. Itcontributes to a culture of short-termism, in which theinvestment community responds to perceived riskby seeking high profit margins and avoiding the re-investment of profit in local enterprises.Most observers continue to view business-environment trends in a positive light. The WorldBank/IFC’s latest Doing Business analysis foundthat 36 of 46 governments in Sub-Saharan Africaimproved their economy’s regulatory environmentfor domestic businesses in 2010/201185. Businessindicators cannot be viewed in isolation, however.The wider governance environment also matters.The Ibrahim Index of African Governance underlinesthe need for a more rounded set of measurementtools and a balanced approach to governance.Summarising the evidence on the four high-levelcategories covered by the index, the 2011 reportcommented: “the majority of countries haveimproved in both Sustainable Economic Opportunityand Human Development, but this progress is notmirrored in Safety and Rule of Law and Participationand Human Rights.”86The record shows thatsustainable gains in overall governance require evenand balanced progress in all four categories.3. Improving businessgovernanceBOX 12: Regional governance initiatives show promiseSeveral encouraging regional initiatives promise to improve governance in Africa. A renewed pan-Africanpride is also stirring, as the African Union (AU) approaches the 50thanniversary next year of the establishmentof the Organisation for African Unity. The hope is that these developments will produce meaningful benefitsfor Africa’s people beyond the inevitable declarations and communiqués.The most important homegrown governance initiative in Africa is the New Partnership for Africa’sDevelopment (NEPAD), which is now under the umbrella of the AU, and which is based on the Declarationon Democracy, Political, Economic and Corporate Governance adopted by the AU in 2001. Adherenceto this Declaration is monitored through the African Peer Review Mechanism (APRM); 33 countries havenow acceded to the APRM, of which 13 have been peer-reviewed87. At its summit in January 2012, theCommittee of Participating Heads of State and Government took several steps that gave a new impetus tothe APRM, including filling several vacancies on the APR Panel of Eminent Persons who lead country reviews.Two new initiatives by African institutions aim to improve financial governance. First, the African DevelopmentBank (AfDB) and the African Capacity Building Foundation jointly launched the African GovernanceOutlook, a diagnostic tool for financial governance — in particular, public financial management — ona regional scale88. The outlook is being piloted in selected African countries that participate in the APRMbut no country analysis has yet been issued. Second, in February 2012, the UN Economic Commission forAfrica established a High Level Panel on Illicit Financial Flows from Africa, chaired by former president ThaboMbeki of South Africa, to raise awareness of illicit financial flows and recommend policies to curb them. Theimportance of this work can hardly be overstated. As well as being linked to criminality and violence, illicitfinancial flows can generate exchange rate instability, inflation, speculative bubbles in property marketsand wider economic contagion effects.At the end of 2010, the Organisation for the Harmonization of Business Law in Africa, which groups 16countries in West and Central Africa, adopted a common law governing credit guarantees, thus addressinga significant obstacle to doing business89. In 2011, the AfDB’s new African Legal Support Facility (AFLS)started operations, including a capacity-building project and advice on the development of contractsin the natural resource sector. One area in which the AFLS could consider developing further expertise island management. As we highlighted in Part II, the post-2007 surge in land grabs across Africa has drawnattention to the limited capacity of African governments to manage foreign investment in this vital area.
  • 68AFRICA PROGRESS REPORT 2012Corruption and lack of transparency remainpervasive concerns, undermining social, economicand political progress at many levels. For ordinaryAfricans who are obliged to pay illegal chargesfor education, health or the marketing of goods,corruption is a source of diminished opportunity. Forinvestors, corruption raises the costs of doing business,with damaging consequences for economicefficiency and jobs creation. And corruption hascorrosive effects on political systems, making itpossible for leaders to use their office in the pursuitof private gain rather than the public good. A lackof transparency leads to inefficient and inequitableuse of natural resources. It is ultimately up to Africancitizens and governments to combat corruptionthrough their national political systems. However,global initiatives and measurement tools can providesupport.The Open Government Partnership (OGP) is apromising new multilateral initiative that aims tosecure concrete commitments from governmentsto promote transparency, empower citizens,fight corruption and harness new technologies tostrengthen governance90. Jointly spearheadedby the United States and Brazil, the OGP wasformally launched in September 2011 by eightfounding governments – including South Africa –that endorsed an Open Government Declarationand announced their country action plans. SinceSeptember 2011, 43 additional governmentshave committed to join the partnership, includingGhana, Kenya, Liberia and Tanzania. In thespirit of collaboration, the OGP is overseen by asteering committee of governments and civilsociety organisations, and performance will beindependently assessed against action plans.According to the most recent CorruptionPerceptions Index produced by TransparencyInternational (TI), the best-ranked African country in2011 remains Botswana, followed by Cape Verde,Mauritius and Rwanda. In many other countries,corruption remains a barrier to investment andefficiency.Multilateral efforts to combat corruption have amixed record. The UN Convention Against Corruption(UNCAC) entered into force at the end of 2005, butwas only recently equipped with an implementationreview mechanism. Terms of reference for thismechanism were adopted in November 2009, callingfor a combination of self-assessments and peerreview. The mechanism started up in July 2010, with27 countries selected for review in Year 1 of the firstfive-year cycle. There were eight African countriesin this first group, among which Rwanda was thefirst to present its self-assessment. Regrettably, theterms of reference stipulate that the “country reviewreports shall remain confidential”, although executivesummaries of a few reports have been published. Alsoregrettably, an earlier decision to exclude civil societyrepresentatives from review meetings was maintained,despite lobbying by several country governments onbehalf of the UNCAC Coalition of Civil Society.Corruption is not just an African problem. For everycorrupt African government or official engaged insiphoning off a “rent” from contracts with foreigninvestors, there is a counterpart - mostly in theforeign investment community. Monitoring of the1997 OECD Convention Against Bribery, whichaddresses the “supply side” of corruption, entereda new phase in 2011. While Phases 1 and 2 focusedon the adequacy and effective application of anti-bribery legislation by countries that have signedthe convention, the present Phase 3 focuses on theactual enforcement of the convention. Recognizedby the relevant OECD Working Party, civil society - ledby Transparency International foremost - has playeda key role in pushing for effective enforcement ofthis important convention.Some African leaders fall far short of expectationsbut there is growing awareness that they often workwith multinational corporations and/or governmentsof developed countries that pursue their own geo-political agenda. Therefore, the various conventionsagainst corruption, drug trafficking and othertransnationalcrimeaswellasgeo-politicalexpediencyby some governments are critical.
  • 69Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeThe governance of natural resources is of vitalimportance for Africa’s development. Mineralsand oil can represent over 40 per cent of nationalbudget revenues – rising to 98 per cent in the case ofoil in South Sudan. In this sector, good governance isabout harnessing the financial capital embedded innatural resources and converting it into the physicalinfrastructure and human capital on which dynamicgrowth, employment creation and shared prosperitydepend. Effectively utilized, the revenues from naturalresources could close some of the glaring inequalitiesand justice gaps identified in this report. Optimizingother aspects of mineral development, such asenvironmental protection, labour conditions, localprocessing and other linkages depends very much ongood governance of all actors.Governments are now much more aware of thehigh stakes involved in managing natural resources,and civil society is increasingly well organizedand effective in highlighting violations of goodpractices. While many governments lack either thepolitical will or the technical capacity – or, morecommonly, both – to manage natural resourceseffectively in the public interest, several resource-rich countries in Africa have stepped up efforts toimprove natural resource governance, combiningnational programmes with participation in globaland regional initiatives.Atthegloballevel,theExtractiveIndustriesTransparencyInitiative (EITI) has made further strides in Africa, with22 African countries implementing the initiative, ofwhich seven are already deemed to comply with itsstandards91. Reform discussions are underway at theEITI on making the reconciliation reports pertainingto government revenue from oil, gas, and miningmore informative and accessible, and on tacklingthe transparency challenges of payments in kind andof barter transactions. It has also been proposed tobroaden the mandate of the EITI to other componentsof the value chain, especially contracting. Barterand contracting are particularly relevant to Africa,including from the perspective of capacity buildingand legal support, as now being offered by the AfDB(see Box 12).Operating under the umbrella of the EITI (where 21African governments are publishing all revenues fromtheir oil, gas and mining sectors), some countrieshave chosen to extend their revenue transparencyprogrammes to non-traditional resource sectors – inLiberia’s case, for example, forestry and commercialagriculture. Nigeria is implementing a broad-basedFacility for Oil Sector Transparency. Taking their cuefrom the Kimberley Process certification of diamonds(see below), other countries are experimenting withthe certification of mineral and forestry products.At the regional level, the adoption of the African MiningVision in 2008, and of an accompanying Action Plan inDecember 2011, represent potentially important stepstowards beneficial and sustainable natural resourceexploitation in Africa. A Mineral Development Centre,soon to be established at the AU/ECA, will guideimplementation of the vision and plan.4. Managing naturalresources for thepublic good
  • 70AFRICA PROGRESS REPORT 2012new discoveriesDiscoveries in Q1 2011Natural Resource CountryOil Ghana (West Cape Three points)Gold Tanzania (Handeni region)Iron Ore Liberia (Bopulu and Timbo)Manganese Gabon (Ndjole)Diamond Sierra Leone (Tongo)Natural gas Tanzania (offshore)New Production to come on stream in 2011Natural Resource CountryCoal MozambiqueOil GhanaCopper Zambia (Konkola North)Manganese GabonCOUNTRYResourceshare oftotal worldproduction %Oil Gas OFFSHOREor notData Source: Raw Materials Group Database, 2012Source: Africa Mining, various issuesNatural Resource rents asshare of GDP50% or more 5% - 9,9%25% - 49,9% 1% - 4,9%10% - 24,9%No data0% - 0,99%What resources are forIn bold: Resources that account for over 10% of global productionTin: Solder and alloysZinc: Alloys and batteriesTitanium: Pigments, alloys and aeropaceBauxite: Aluminum for packaging and transport (aircraft, cars)Chromite: Stainless steelCoal: Power generationCobalt: Batteries, metal alloysColtan: Electronic devices, mobile phonesCopper: Electrical wires and telecommunications cablesDiamond: JewelleryIron Ore: Steel for construction etcGold: Jewellery (and as a store of value)Lead: Car batteriesLithium: Batteries for electronic devicesNickel: Stainless steel, magnetsNiobium: Steel production and alloysManganese: Steel productionPalladium: Catalysts, electronicsPhosphate Rock: FertiliserPlatinum: Catalytic converters (for cars)Platinum group metals (PGM): Catalytic converters (for cars)Rhodium: Catalysts, electronicsTungsten: Alloys and other industrial usesUranium Oxide: Power generationZirconium: CeramicsThe momentum created by the EITI and its civilsociety supporters has been strengthened throughrecent legislation by the United States Congress,the Dodd-Franks Act, requiring US-listed extractivecompanies (even if not domiciled but in the UnitedStates) to disclose their extractive industries paymentsby country and by project. The US Securities andExchange Commission has still not issued regulationsto flesh out this new disclosure requirement,however, amid intense lobbying on both sides ofthis transparency effort. The EU is at a similar stageof introducing comparable rules for EU-domiciledcompanies. Mandatory disclosure requirements ofthis detail and reach could transform the resourcegovernance landscape in Africa.In addition, the OECD has recently developed theOECD Due Diligence Guidance for ResponsibleSupply Chains of Minerals from Conflict-Affectedand High-Risk Areas, which provides the firstcomprehensive set of government-backedrecommendations to help companies respecthuman rights and avoid contributing to conflictthrough their mineral purchasing decisions andpractices. In cooperation with partner countries ofAfrica’s Great Lakes region, the World Bank and theUnited Nations, the OECD is coordinating a project toensure use of the Guidance and its Supplement onTin, Tantalum and Tungsten by companies sourcingminerals from the region. Currently 82 companiesand industry associations have volunteered to takepart in the project. In the second half of 2012, theOECD will launch an implementation programme forthe recently completed Supplement on Gold.Another initiative that has gained considerabletraction is the Natural Resource Charter (NRC),drafted by an independent group of experts ineconomically sustainable resource extraction andorganizedaroundtwelvepreceptsofnaturalresourcegovernance92. Having won the endorsement ofthe AfDB and NEPAD, with which it is beginning apromising programme of work at country level, theNRC is now developing and piloting a Charter-basedbenchmarking methodology in several countries.In Nigeria, NRC scores are to serve as goal-levelindicators for the ambitious multiyear Facility forOil Sector Transparency. Meanwhile, the KimberleyProcess Certification Scheme for rough diamonds,currently in its tenth year, is seeking to restore itscredibility, with Botswana chairing a working groupto review the effectiveness of the process93.resourcesFigure 20:
  • 71Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangealgeriaIron OrePhosphate Rock1.311.09-MauritaniaIron OreGoldCopper0.670.280.21- OffshoreMoroccoCobaltPhosphate Rock2.7614.85- -NigerUranium OxideGold6.910.1- -TanzaniaGold 1.61- offshoreNigeriaColtanTinNiobiumGold2.080.630.310.13OFFSHORESUDANGoldChromite0.420.78- -gabonManganese 2OFFSHOREghanaGoldManganese3.562.86- OFFSHORECHAD- -CongoOFFSHOREEquatorial GUINEAOFFSHORECameroonGold 0.04- OFFSHOREDRCCobaltDiamondCopperColtanTin49.6920.501.578.333.15- OFFSHOREcôte d’ivoireGold 6.9OFFSHOREegyptPhosphate RockIron Ore3.350.12-libYa-TunisiaPhosphate Rock 4.6CEntral african republicDiamond 0.38EThiOPIAColtan 3.08KENYAGold 0.02RWANDAColtanTungstenTin101.790.95BURKINA FASOGold 0.34maliGold 1.82GUINEABauxiteGoldDiamond8.260.731.9SENEGALPhosphateGold0.590.23Sierra leoneBauxiteDiamond0.420.78liberiaDiamondGold0.030.03TogoGoldPhosphate Rock0.50.45BURundiColtanGold1.330.1angolaDiamond 9.50- OFFSHORENamibiaUranium OxideDiamondZinc9.857.211.65botswanaDiamondCopperCoalGoldNickel25.7122.41.041.631.48zambiaCobaltCopper7.14.38LESOTHODiamond 1.75ZIMABABWEChromiteDiamondLithiumPalladiumPlatinumPGMsRhodium1.840.492.612.22.892.471.92MozambiqueColtanZirconiumGold9.172.540.01- -MalawiUranium Oxide 0.21madagascarChromite 0.32south africaChromiteCoalCobaltCopperDiamondsGoldIron OreLeadManganeseNickelPalladiumPhosphatePlatinumPGMsRhodiumTitanium40.353.721.540.777.929.632.921.2417.872.06381.3976.9259.5783.3323.64- OFFSHORE
  • 72AFRICA PROGRESS REPORT 2012
  • PART IVEDUCATION –A TWIN CRISIS IN ACCESSAND LEARNINGLearning is the engine that drives economic growth, fuelsinnovation and creates jobs. It is what equips countries– and people – with the skills they need to escape thegravitational pull of poverty and build shared prosperity.And it is what empowers people, enabling them tobuild more secure livelihoods, enjoy better health andparticipate in political processes that affect their lives.For all of these reasons, Africa’s ongoing education crisisdemands the urgent attention of political leaders and aidpartners.
  • 74AFRICA PROGRESS REPORT 2012Wedonotusetheword“crisis”lightly.Ineducation,as in other areas, much has been achieved overthe past decade. Enrolment levels have soared. Morechildren are making it through primary educationinto secondary school. Gender gaps have narrowed.Many countries have registered a pace of advancethat would have been inconceivable when the MDGcommitments were made. Yet, on current trends, thetarget of universal primary education by 2015 will bemissed by a wide margin, leaving millions of childrenout of school – and there are worrying indicationsthat progress may be slowing. Meanwhile, many ofthe children in school are receiving an educationof such abysmal quality that they are learning verylittle. Far from accumulating “21st-century learning”skills, millions of Africa’s children are emerging fromprimary school lacking basic literacy and numeracy.The twin education deficits in access to school andlearning in school have far-reaching consequences.They are undermining the potential of a wholegeneration of children and young people, reinforcingsocial divisions and damaging prospects for sustainedand shared economic growth. Africa’s governmentshave placed considerable emphasis over the past10 years on putting in place the macroeconomicpolicies needed to support growth – and rightly so.But the kind of broad-based growth that Africa needsis simply not possible if its people lack the necessaryskills and capabilities on which dynamic and broad-based growth depend.Left unattended, this imbalance in priorities will havedamaging consequences for Africa’s future. In anincreasingly interconnected and knowledge-basedglobal economy, today’s disparities in educationare tomorrow’s inequalities in income, trade andinvestment. More than ever, the prosperity of nationshinges less on what countries have (their naturalresource capital) than on what their citizens areable to learn (their human capital). And what is truefor countries is also true for people. Those deniedan opportunity to develop their potential througheducation face the prospect of marginalisation,poverty and insecure employment.Education has the potential to transform Africa’ssocial and economic development. Unlockingthat potential will require governments to act withurgency on three fronts. First, every governmentneeds to redouble its efforts to ensure that all childrenare in school by 2015. Second, far greater attentionmust be directed towards the quality of educationand learning achievement. Africa needs to embracewhat researchers at the Brookings Institution havedescribed as a “global compact on learning” – acompact that puts a premium on results. Shortly afterGhana’s independence, its first president, KwameNkrumah, said: “We shall measure progress by thenumber of children in school, and by the quality oftheir education.”94Too many governments – anddonors – have forgotten the quality part of theequation.The third priority goes to the heart of the wideragenda for jobs, justice and equity. Both in accessand education quality, Africa has some of the world’smost glaring education inequalities. Most countrieshave constitutional provisions that enshrine the rightof all citizens to an education, without regard to theircircumstances. Yet all too often being born into a poorfamily, living in a rural area, being female or comingfrom a conflict-affected region is a marker for extremedisadvantage in education. These inequalities areacting as a brake on progress towards the MDGs,reinforcing wider social disparities and underminingeconomic growth. That is why governments need toput equity at the centre of their education strategies.
  • 75Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeMeasured by the number of children sittingin classrooms, Africa has registered someremarkable achievements. The net enrolment rate,which measures the proportion of primary-school-age children registered for school, increased from60 per cent in 2000 to 76 per cent in 2009. Over thesame period, out-of-school numbers fell from 42million to 30 million95. Given that Africa has the world’sfastest-growing primary school age population, theseoutcomes are even more impressive than the headlinedata suggest. Gender disparities have also declined.And there has been a marked increase in secondary-school participation, with the enrolment rate increasingfrom 24 to 34 per cent.When the MDG commitments were made in 2000, fewobservers would have predicted the achievementsregistered by many countries. Tanzania had over3 million children out of school and enrolment wasdeclining. Today the country is within touchingdistance of universal primary enrolment. From BurkinaFaso to Ethiopia, Mozambique, Senegal and Zambia,one country after another has made a breakthrough inenrolment. From a far lower base, Niger has increasedenrolment rates by 50 per cent. Just six years ago, theregion that is now South Sudan was emerging froma brutal civil war. Since then, enrolment levels havedoubled – a remarkable testimony to the importancethat the new country’s parents attach to the educationof their children.Impressive as the growth in school participation maybe, Africa is not on track to achieve the MDG targets.If the trend from 2004 to 2009 is continued, there will stillbe 17 million out of school in 2025 – two primary schoolgenerations after the 2015 target date for universaleducation96. Disconcerting as these figures are, they tellonly a partial story. Another 12 million African childrenenter school only to drop out before completing a fullprimary school cycle, many of them in the early gradesof education. In Mali, only one in three children whoenter school make it to the last grade.Why do so many of Africa’s children drop out of primaryschool? The reasons vary across and within countries. Forpoor households, formal and informal fees, and chargesassociated with textbooks, can create cost barriers. Thepoor quality of education is another factor (see below).Young girls face distinctive barriers. Many start schoollate, and early marriage often cuts short their schoolyears. In Niger and Chad, over 30 per cent of younggirls are married before the age of 15, and for a farwider group of countries – including Mali, Mozambique,Ethiopia and Burkina Faso – over half marry by 1897. Inthe vast majority of cases, early marriage signals the endof education. At the same time, keeping young girls inprimary school is one of the most effective sources ofprotection against early marriage.Africa’s education deficits do not end with primaryeducation. There are 19 million adolescents out ofschool, many of them making the transition to workwithout having completed a basic education98.Compared with Sub-Saharan Africa, teenagers in SouthAsia are 50 per cent more likely to be in secondaryschool; and those in East Asia are twice as likely to geta secondary education. Stated bluntly, Africa’s humancapital foundations are too weak to sustain dynamiceconomic growth and shared prosperity.Inequalities are hampering progressRegional aggregates mask underlying inequalities inaccess to education. Disparities linked to wealth,gender, ethnicity, the rural–urban divide and othermarkers for disadvantage create social fault-linesrunning through the region’s education systems. Ascountries have moved closer to universal access,the challenge of combating these disparities hasbeen brought into sharper focus. Continued progresstowards the goal of universal primary education by2015 will require interventions that reach those whohave been left behind.Gender inequalities remain endemic. While thedisparities are narrowing, girls still account for adisproportionate share of out-of-school children. Thereare just 8 girls for every 10 boys in secondary school99.Wealth gaps and regional disparities are equallymarked. Children from the poorest households areless likely to get into school, and those who do enterare more likely to drop out. In Mali, young adults fromthe poorest 20 per cent of households have receivedon average five years less education than those fromthe wealthiest households – and this is not atypical. InKenya, a group of 12 counties in the arid and semi-aridnorthern region accounts for around 20 per cent ofthe country’s population, but 46 per cent of the out-of-school population.1. The educationprogress report
  • 76AFRICA PROGRESS REPORT 2012None of these inequalities operates in isolation.Disadvantages linked to wealth, gender and locationhave mutually reinforcing effects. UNESCO’s Educationfor All Global Monitoring Report developed ameasurementtool–theDeprivationandMarginalisationin Education indicator – that charts the impact ofoverlapping inequalities in limiting opportunities foreducation. One illustration comes from Nigeria, wherepoor rural Hausa women aged 17 to 22 average lessthan one year in school. The comparable figure forurban males from wealthy households is over nine yearsin school (Figure 21). Africa’s pastoralist communitiesprovide another illustration of the region’s overlappinginequalities. Among those aged 17 to 22 in Senegal, 57per cent of women report having less than two yearsof education100. For women from the pastoralist Poularcommunity, that figure rises to 80 per cent. Similarpatterns of disadvantage occur in Ethiopia, Ugandaand Kenya (Figure 22).Accelerated progress towards universal access toeducation will require a far stronger focus on themost marginalised children. Governments acrossmuch of Africa face a common challenge. Thesurge in enrolment over the past decade reflects thesuccess of policies that have made education moreaccessible, such as the withdrawal of school fees andlarge-scale school construction. But reaching thelast 10–20 per cent will require additional measurestargeting the most marginalised and hardest to reach– including child labourers, girls forced into earlymarriage, children living in urban slums and remoterural areas, disadvantaged ethnic groups and thedisabled.14106128420Nigeria, 2003UkraineCubaBoliviaHondurasCameroonBangladeshChadC.A.Rurbanurbanruralrural Hausaruralpoorest 20%IndonesiaNigeriaEducation povertyExtreme education povertyAverageyearsofeducationFigure 21: The education inequality treeSource: UNESCO (2010) EFA Global Monitoring Report: Reaching the Marginalized, UNESCOBoys Girlsrichest 20%
  • 77Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeLearning outcomes – a weak recordIf getting more children into school has been a partialsuccess story, the evidence on learning points in adifferent direction. That evidence remains fragmentedand partial, in part because policymakers haveattached insufficient weight to collecting data anddeveloping learning-assessment systems. Even so, itis apparent that Africa’s schools are failing millions ofchildren.Learning-assessment exercises provide a windowonto the state of education. Zambia has made rapidprogress towards universal primary school enrolment,with over 90 per cent of primary school aage childrenin school. But half of the children in the last grade areunable to meet basic literacy standards. It has to beemphasized that such outcomes are the rule, not theexception.This is a state of affairs that merits consideration outsidethe confines of education ministries. Governmentsacross the region invest heavily in education. Publicspending on education averages over 5 per cent ofGDP, one of the highest levels for any region in theworld. Since 2009, average annual spending hasincreased by 6 per cent a year. Yet learning outcomesfall far short of the levels needed to unlock the potentialof education to act as a force for sustained growth,innovation and accelerated poverty reduction.Skills deficits among Africa’s youthThere are 173 million young Africans aged 15 to24. The majority have made the transition fromchildhood to the world of work with limited education.Only a minority went to secondary school, and themajority did not complete primary education.These education deficits are reflected in labourmarkets. Youth unemployment rates in Sub-SaharanAfrica are second only to those in the Middle Eastand North Africa, with one in five affected. Those inemployment often face lives of working poverty. InMalawi, Mozambique and the Democratic Republicof Congo, more than 70 per cent of working youth liveon less than $1.25 a day. With Africa’s youth populationset to grow by 73 million in 2025, no country can affordto ignore the challenge of providing decent jobs.Youth unemployment and working poverty are twosymptoms of wider learning deficits. Having enteredlabour markets with limited education assets, Africa’syouth face restricted pathways for skills development.One survey of youth in Kigali, the capital of Rwanda,found that a lack of access to opportunities foreducation was seen by young people themselvesas the biggest barrier to employment and a betterlife. Deprived of the chance to develop their skills,young people are left to scramble for employment ininsecure, low-wage activities. The sense of helplessnessand thwarted ambition experienced by the millionsof young people unable to find work inevitably fuelscriminality, the threat of violence and instability.There is a two-way interaction between educationand employment. Increasing the general level ofeducation without creating jobs is a prescriptionfor high levels of unemployment and lower wagesat higher skill levels. Thwarted youth ambition andfrustration over the lack of employment opportunitieswas a major force behind the Arab revolutions.These revolutions underline the critical importanceof aligning enhanced education with job creation.One of the challenges for Africa in this context is tomake the transition to more labour-intensive growthpatterns.African governments have been slow to address theskill deficits facing the region’s youth. These deficitsrepresent an enormous cost to society in terms of lostpotential for economic growth and social cohesion.Yet, few countries have put in place, on the scalerequired, strategies for providing “second-chance”education programmes for young people who missedout in their earlier years, technical and vocationaleducation and training, and support for training inthe informal sectors where the vast majority of Africa’syoung people work. In the absence of a breakthroughin education, even the most effective policies willdeliver modest results.
  • 78AFRICA PROGRESS REPORT 2012Figure 22: Pastoralists face extreme education deprivationEducation inequalities in globalperspectiveThe scale of the education divide that separatesSub-Saharan Africa from other regions is notsufficiently recognized. In the United States and muchof Europe, a typical child reaching primary school agecan anticipate 15 to 18 years in full-time education.Around 70 per cent will go beyond secondary schooland into tertiary education – the gateway to thehigher levels of knowledge development.Africa is at the other end of the global distribution.Research by UNESCO’s Education for All GlobalMonitoring Report has used survey evidence todocument the number of years spent in education bythose aged 20 to 24 across Africa. In Mozambique, 40per cent reported less than four years of schooling,rising to 50 per cent or more in Senegal, Ethiopia, Chadand Mali101. Today, a child entering the primary schoolsystem in Burkina Faso has less chance of reachingthe last grade than a counterpart in Europe has ofmaking it to university. The enrolment rate for tertiaryeducation is just 6 per cent, which is half the level inSouth Asia and one quarter of the level in East Asiaor Latin America. Measured on the standard criteriafor participation in education, Sub-Saharan Africanchildren and youth have been cut adrift from the riseof opportunity.0 020 2040 4060 6080 80100 100Ethiopia:Afar/related39886085Kenya:Somali 9297 51Benin:Afar/related26965394Nigeria:Fulani17913368Senegal:Poular438057716299 51874235 87843830 79534041 5061906083Country average (male)Country average (female)Pastoralist group (male)Pastoralist group (female)Extreme education poverty: population aged 17 to 22with fever than two years of education (%)% out of primary school*% of the population aged 17 to 22 with fewer than two years of education and % of primary school age children notattending primary school, by gender and membership of selected pastoralist groups, latest available year.Notes: *% out of primary school: proportion of children of primary school age not attending primary school.Data from: UNESCO-DME (2009); census, calculations by Harttgen and Klasen (2009).Source: UNESCO (2010) EFA Global Monitoring Report: Reaching the Marginalized, UNESCO
  • 79Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeEducation is where sound economics andethical imperatives come together to make anoverwhelming case for action in favour of jobs and ofjustice. Good-quality education is a solid investmentwith high rates of return in terms of economic growthand employment creation. And learning is thebirthright of all African children, irrespective of theircircumstances.The early yearsEfforts to tackle the crisis in education have tostart long before children enter school. Goodhealth and nutrition is critical. Learning outcomes ineducation are strongly affected by the nutritionalstatus of children in their early years, especiallythe first two years of life. With one in every three ofAfrica’s children experiencing chronic malnutrition intheir early years, there is an unfortunate interactionbetween the education crisis and child hunger.Breaking that interaction must be a priority.Undernutrition affects cognitive development bycausing structural damage to the brain and impairingmotor development. Stunting by the age of two,one of the most sensitive indicators of undernutritionduring foetal and post-natal life, is strongly associatedwith weakened cognitive development, especiallywhen combined with household poverty. Evidencefrom middle-income developing countries suggeststhat children who are stunted lose the equivalent oftwo grades in education, and another two grades asa result of diminished learning. That evidence goessome way towards explaining the high dropout ratesand abysmal learning outcomes that characteriseeducation systems across Africa. With around halfof children in eastern Africa and one-third in westernAfrica stunted, and malnutrition levels falling veryslowly over time, governments need to recognizethat hunger is an education policy issue.Governments across Africa need to do far more tojoin up early childhood and education policies. Everycountry should have a “first 1,000 days” strategycovering the critical period from conception toage two, when much of the brain’s architecture isformed. There should also be a concerted effort toexpand pre-schooling, with centres linked to schoolsdelivering both early learning and nutritional support.Recent evidence from Africa confirms that earlychildhood provision is one of the best investmentsthat can be made for education. A randomizedcontrol trial in Mozambique found that children whohad attended pre-school were 24 per cent more likelyto be enrolled in primary school. Participation in pre-school was associated with consistent improvementsin cognitive and problem-solving abilities, and higherlevels of learning achievement.Access and learning –delivering on the MDG promiseLooking towards 2015, there is an unfortunate airof resignation hanging over much of the region.Many governments and donors appear to view alarge shortfall against the MDG targets in educationas an inevitable outcome. Indeed, much of thedebate surrounding the MDGs in education hasmoved on to dialogue on the “post-2015” agenda.Without discounting the importance of this dialogue,the shift in priorities is premature. As many countriesacross the region have demonstrated, rapid progresstowards the 2015 goals is possible. Both Tanzaniaand Ethiopia reduced out-of-school numbers byover three million in the first half of the decade after2000. The immediate challenge for governments andtheir development partners is to identify strategiesaimed at getting more children into school, reducingdropout rates and improving learning achievementlevels.Some of the barriers to participation in educationcan be swiftly removed through well-designedpolicies. Classrooms can be constructed closer tothe communities they serve. Cost barriers can belowered by eliminating fees and targeting support todisadvantaged regions and students. Bursaries canbe used to create incentives for parents to keep girlsin school and out of early marriage.Overcoming the learning achievement deficits willrequire deeper institutional reforms. Overcrowdedclassrooms, shortages of textbooks and a dilapidatedschool infrastructure are part of the problem in manycountries – but it is the easier part to fix. The moredifficult part revolves around teaching. Ultimately, noeducation system is better than its teachers. With adeficit of around one million teachers, Africa urgentlyneeds to step up recruitment102. However, far moreneeds to be done to raise the quality of teaching.2. An agenda foraddressing Africa’seducation crisis
  • 80AFRICA PROGRESS REPORT 2012Many of Africa’s teachers enter classrooms withlimited subject knowledge. One survey found thatfewer than half of grade six teachers in Mozambique,Uganda and Malawi were able to score at the topof the competency level for the pupils103. Teaching istypically delivered in rote fashion, reflecting trainingsystems that regard “child-centred learning” as analien concept. In-service support systems are weak.And whether as a result of low morale, poor pay or alack of accountability, Africa’s schools are plaguedby an epidemic of teacher absenteeism.Governments can do far more to raise the bar ofambition in learning. Basic learning-assessment toolscan be used to identify failing schools and pupils.Teacher deployment and education financing canbe geared towards the most disadvantaged schoolsrather than, as is currently the case in most countries,towards the more advantaged. Critically, far moreemphasis needs to be placed on ensuring that theschool curriculum, teachers, and teaching materialsare geared towards equipping children with the early-grade reading and numeracy skills that they need toprogress.In retrospect, the MDG framework may haveinadvertently deflected attention away fromlearning and created an incentive for governments– and donors – to concentrate their efforts on gettingmore children into school. The debate on the post-2015 development goals provides an opportunityto correct this failing. Whatever the framework thatemerges from the ongoing dialogue, it should includea meaningful goal for learning achievement, andprovide for effective monitoring of progress towardsthat goal. As a minimum, the post-2015 learninggoal should include the twin target of getting allchildren into school, while at the same time ensuringthat no child is unable to perform basic literacy andnumeracy tasks after three years.Aligning education, skillsdevelopment and employmentMany young people entering labour markets inAfrica have not completed primary education.One survey covering Senegal, Kenya, Tanzania andZambia found that over half of informal-sector workershad only a primary school education, or less104. Byfar the most important source of skills development forworkersintheinformalsectoristraditionalapprenticeshipand on-the-job training. In Ghana, it is estimated that 80–90 per cent of basic skills training comes from traditionalapprenticeships, compared with 5–10 per cent frompublic training institutions, which for the most part havenot been very effective in addressing the needs ofyouth in the informal sector and in reaching the mostmarginalised youth105.There are encouraging signs to suggest thatgovernments in Africa are starting to address theskill deficits among youth populations. The AfricanDevelopment Bank has identified several countries –includingCameroon,Ethiopia,RwandaandMozambique– that have moved to strengthen coordination betweendifferent skills development agencies. Members ofthe African Union are developing a new frameworkfor technical and vocational education and training,linked to tools for assessing the skills that young peoplewill need to gain employment. For example, the Kenyangovernment has developed a public–private partnershipto train 20,000 skilled information technology workers.Several donors – including Japan and Germany – havescaled up aid for vocational programmes.
  • 81Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeAfrican governments themselves have toprovide leadership in tackling the twin crisis inaccess and learning. At the same time, the MDGsand the Education for All compact commit toproviding support for national efforts. When donorssigned the plan of action for achieving Educationfor All in 2000, they pledged that “no countriesseriously committed to education for all will bethwarted in their achievement of this goal by lackof resources.”106It is difficult to square that pledge with the recordon aid delivery, as outlined above. Best estimatessuggest that, even with a strengthened domesticresource mobilisation effort, the poorest countriesin Africa and elsewhere will need around $16 billionannually in aid. However, aid levels have stagnatedat around $3 billion a year. While the overall aidenvelope for education did expand in 2010, Sub-Saharan Africa – with the partial exception ofEthiopia – was bypassed.Aid donors have justifiably pressed Africangovernments to increase levels of support foreducation – and they, too, must hold to the MDGpromise. The Global Campaign for Education hascalled on the donor community to allocate 10per cent of overall aid to basic education in thepoorest countries. This is a target that most couldreach – in some cases, as in France and Germany,by reallocating aid to primary basic educationin Africa that is currently diverted to domesticeducation providers. The World Bank has pledgedto increase support to basic education by $750million from now to 2015.Education should be a central element in therenewal of the MDG compact proposed earlier inthis report. Governments in Africa should undertaketo put in place policies aimed explicitly at reachingchildren who are being left behind, and raising theirlearning achievement levels. For their part, donorsshould pledge to support these policies throughmore flexible and responsive financing. Convertingthe Global Partnership for Education (GPE) into anindependent global fund could help to galvanisethe support and mobilise the financing needed tounderpin the compact that we envisage.3. The key role of aiddonors
  • 82AFRICA PROGRESS REPORT 2012
  • PART VMOBILISING ANDMANAGING FINANCESFOR DEVELOPMENTTo meet its young people’s aspirations for better lives,Africa needs to diversify the sources of growth fromnatural resources and other commodities to sectors suchas manufacturing and services that have greater potentialto create jobs and prosperity. Such an agenda requiresmobilising and strengthening the sources of domesticfinance, as well as managing development assistance.
  • 84AFRICA PROGRESS REPORT 2012There is a widespread public perception in manyrich countries that international aid remains thedominant form of development financing for Africa.That perception is wide off the mark. Africa is moredependent on aid than other regions, but domesticresource mobilisation – the public and private financeraised within countries, through taxes and savings – faroutweighs levels of development assistance. This partof the report provides an overview of the pattern ofresource mobilisation for Sub-Saharan Africa, focusingon four types of finance.1. Domestic resource mobilisation (or taxation) is risingbut needs to increase faster in order to reduce aiddependence.2. Foreign direct investment is also rising.3. Development assistance, in the form of aid grantsand highly concessional loans, seems likely toflatten out after the growth of the past decade,and indeed fell in 2011 for the first time this century,once distortions from debt write-off are taken intoaccount.4. Semi-concessional loans and market-based financefrom official or private sources are financial flowswith terms that place them somewhere betweenaid and commercial flows. These have potential forgrowth but could raise concerns over debt.This part concludes by examining how Africancountries and the providers of official assistance canensure that such finance is used effectively. With lowaverage incomes, high poverty and a narrow tax base,many African countries have struggled to increasegovernment revenues as a share of Gross NationalIncome (GNI). That picture is starting to change –and mineral exports are widening the revenue base.Continued progress is critical if governments are tofinance the social and economic infrastructure neededto create jobs, sustain growth and improve the qualityand reach of basic services.Over the period 2004–2008, government revenue inSub-Saharan Africa averaged 27.0 per cent of GNI,while grants from aid donors added only 1.6 per cent ofGNI. Even in low-income countries, domestic revenue ison average nearly three times the contribution of grantaid107. It follows that domestic resource mobilisationholds the key to development financing.While tax revenues are gradually increasing as a shareof the economy, they remain lower in Africa than inother regions – and the rate of increase varies widelyacross countries. From 2004 to 2010, Malawi increasedits revenue share of GDP from 16.8 to 24.9 per cent, andMozambique from 13.1 to 20.3 per cent. In Ethiopia,the comparable figure fell from 16.1 to 14.0 per cent.There are no rules for determining the “right” tax/GNIratio. However, increasing savings and taxation is vitalif Africa is to sustain higher levels of investment, providebasic services and manage the increase in fiscaldeficits projected by the International Monetary Fund.Natural resource wealth is now the single largestsource of potential government revenues in the region.Between 2000 and 2008, ODA flows to Sub-SaharanAfrica increased from $12 billion to $36 billion per year.In contrast, the value of natural resource rents rosefrom $39.2 billion to $240 billion. If governments couldincrease the share of rents captured by extraction,they could reduce aid dependence and increasedomestic resource mobilisation dramatically.1. Domestic resourcesare the key tosustainable growth
  • 85Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeNew discoveries across the region are creating newlyresource-rich countries. This trend is set to continue withrising investments in exploration both around existingdeposits and into new areas. But the record of turningthis wealth into revenue and improved living conditionsremains poor in many resource-rich countries. In 2008,the DRC collected only $92 million in minerals taxesand tariffs108on estimated mineral exports of $2 billion.In 2006, Equatorial Guinea had a GDP per capita of$15,000, similar to Portugal, while 76 per cent of thepopulation were living below the national povertyline – the highest proportion recorded that year in theWorld Bank database109.But there is also progress to record. The list of resource-rich countries that have successfully navigated thesechoices is growing: from Norway to Malaysia to Brazil.In Sub-Saharan Africa, Botswana has demonstratedthat the journey from resource-wealth to sustainedprosperity is possible.The adoption of good governance practices,characterised by a wave of mining code revisions,offers promise for the coming decade. Major revisionsto the mining code in Guinea, for example, couldyield increased government revenues of up to $3.15billion by 2017, compared to revenues of only $123million between 1995 and 2010. These “best practice”provisions included in the revised mining code arebecoming more widespread across the continent,and include public contract disclosure and reportingof payments.How should governments strengthen their tax basemore generally? A report released in March 2011 bythe Collaborative Africa Budget Reform Initiative(CABRI)110identifies priorities for improving taxgovernance, including: efficient management ofthe tax system; avoiding overly generous tax breaksfor investors; building capacity for negotiations withextractive industries; and addressing problems suchas tax evasion, illicit capital flows, transfer pricing andfiscal corruption.The CABRI report cautions against narrowlytechnocratic approaches to tax. It points out thateffective tax policies require a degree of socialconsensus. If society in general and taxpayers inparticular view the overall system of public finance asinefficient and unfair, tax evasion and the transactioncosts for preventing it inevitably rise. Societies with astrong sense of shared social interest and collectiveresponsibility are also likely to have more efficient andequitable tax systems. So, while African governmentsneed to improve revenue mobilisation, they also needto recognize that deficiencies in the tax collectionsystem–evasion,corruption,abuseandmisapplicationof provisions for tax exemption, political interferenceand the low capacity of tax administrations – aresymptomatic of broader problems.There are wider issues at stake in tax reform. Taxation ispart of the social contract between states and citizens.Indeed, dependence on revenue from public taxationcan act as a lever for accountability. Conversely,when governments have large alternative sources ofrevenue – from oil revenues or foreign aid, for example– this can weaken accountability. Taxation stimulatesdemands for representation, and an effective revenueauthority is the central pillar of state capacity111.In a globalised economy, regions and countries withweak institutions face, in a magnified form, problemsthat many of the more advanced economies aredealing with. Multinational companies minimize theirtax exposure in “high-tax” jurisdictions by shifting theirreported profits towards “low-tax” havens, for exampleby transfer pricing. Over the past two decades, theFigure 23: Share of GDP from extractive resource rents and officialdevelopment assistance, 2009Source:APPcalculationsbasedonWDI2012Percentage0106020304050EquatorialGuineaChadSudanGuineaCongoMauritaniaDem.Rep.ofCongoMozambiqueGabonNigeriaCameroonCôted’IvoireAngolaZambiaGhanaTanzaniaSouthAfricaBotswanaZimbabweSierraLeoneOfficial Development Assistance as share of GDPExtractive rents as share of GDP
  • 86AFRICA PROGRESS REPORT 2012DOMESTIC RESOURCE MOBILISATIONAID AND TAX REVENUE PER CAPITA (2008)Notes: (*) 2007, (**) 2006. Source:AFDB/OECD 2010 - African Economic OutlookDomestic resource mobilisation is rising but needs to increase faster in order to reduce aid dependence.FOREIGN DIRECT INVESTMENTForeign direct investment is rising but needs to beencouraged beyond the natural resource sector.GRANT & HIGHLY-CONCESSIONALLOANS FROM OFFICIAL SOURCESDevelopment assistance is likely to flatten out after the growthof the past decade, and indeed fell in 2011 for the first time thiscentury.SEMI-CONCESSIONAL ANDNON-CONCESSIONAL FLOWS FROMOFFICIAL AND MARKET SOURCESSemi-concessional loans and market-based finance have poten-tial for growth but could raise concerns over debtMANAGING FUNDS FOR DEVELOPMENTForeign Direct Investment vs Aid** Aid data is from the OECD report on Aid Predictability, 2011, and refers to gross Country Programmable Aid as definedby the OECDTax revenue per capitaODA per capitaAPP with data from the‘2011 African Economic Outlook’and‘Africa in 50 Years Time’published by the African Development Bank; Recalibrating Development Co-operation: How Can African Countries Ben-efit from Emerging Partners? by the OECD Development Centre, 2011 and the 2011 UNCTAD Investment Report.Figure 24:BurundiGuinea-BissauDRCSierraLeoneEthiopiaNigerCARLiberiaMadagascarRwandaMozambiqueUgandaGuineaTanzaniaBurkinaFasoTogoGambiaMaliComoros**Ghana**BeninS.T.andPríncipeCoted’IvoireMauritaniaCameroonSenegalZambiaDjiboutiChadSudanLesothoEgyptNigeriaAfricaMoroccoCapeVerdeTunisiaSwazilandNamibiaMauritiusCongoSouthAfricaBotswanaAngolaAlgeriaGabonSeychellesEquatorialGuineaLibyaMalawi*Kenya2 0001 6001 2008004000USD11 7252 8652 6482 317US$million16 00014 00012 00010 0008 0006 0004 0002 00002000 2005 2010 2013Southern AfricaEast AfricaWest AfricaCentral Africa Aid*FDI
  • 87Jobs, Justice and Equity: Seizing Opportunities in Times of Global Changeshare of world trade conducted between subsidiesand affiliates of the same multinational company hasincreased, creating scope for the overpricing of importsby the parts of companies in higher-tax countries (apractice that reduces tax liability by lowering reportedprofits). These are issues of concern to tax authoritiesfrom the United States to France and Japan – and itappears likely that Africa suffers considerable lossesbecause of such practices. The use of bribes by foreigncompanies can also subvert tax administration.These problems have increased the need for a strongermultilateral system. There have been some positivedevelopments in this area, but more needs to be done.The G20 has taken several steps that could benefit Sub-Saharan Africa. It has agreed to sign the MultilateralConvention on Mutual Administrative Assistance in TaxMatters, which allows for exchange of tax informationbetween countries, and to help developing countriescounter abusive transfer pricing. It has also called formultinational companies to be fully compliant andtransparent in their dealings with poor countries, andwelcomed a call from Bill Gates to impose legallybinding transparency requirements on mining and oilcompanies, as exists in the United States under theDodd-Frank Act. The G20 has also encouraged allcountries to join the Global Forum on Transparencyand Exchange of Information in Tax Purposes. Whilethis is a voluntary mechanism, information is critical togreater transparency.In addition, the Financial Action Task Force – aninternational agency that combats money laundering– agreed in February 2011 that those who facilitatemoney laundering linked to tax crime may be charged.These initiatives need to be followed through.The principal responsibility for mobilising moredomestic resources, however, lies with Africancountries themselves. They should further encouragedomestic savings, which they can facilitate throughthe development of financial markets and microcreditinstitutions. Levels of revenue collection should beincreased, with an emphasis on broadening coverage,for example by tackling inappropriate tax preferencesand exemptions. Governments should strengthentax administration efforts, including addressing theproblem of tax avoidance and getting a fair sharefrom the exploitation of natural resources.At the international level, donors should enhance theircooperation in support of tax administrations. Thereshould be a stronger dialogue between tax jurisdictionsin Sub-Saharan Africa and its major trading partners onissues such as tax havens, transfer pricing and greatertransparency in key areas such as extractive industries.Major financial centres, for their part, should take moredecisive steps to address recovery of stolen assets.DOMESTIC RESOURCE MOBILISATIONAfrican states should• Encourage domestic savings and increased levels ofrevenue collection• Strengthen tax administration efforts. Address theproblem of tax avoidance and ensure a fairer share fromthe exploitation of natural resources• Give higher priority to facilitating savings, for examplethrough the development of financial markets andmicrocredit institutionsDevelopment partners should• Enhance their cooperation in support of taxadministrations• Promote stronger dialogue between tax jurisdictionsin Sub-Saharan Africa and its major trading partners onissues such as tax havens, transfer pricing, and greatertransparency in areas such as extractive industriesMajor financial centres should• Take more decisive steps to address recovery of stolenassetsFOREIGN DIRECT INVESTMENTAfrican states should• Continue to improve the legal and administrativeenvironment for all businesses both local and foreign• Address infrastructural constraints and encourage cross-border movement of goods• Encourage investment in export-oriented processing andmanufacturing with a view of creating jobs• Maintain competitive exchange ratesDevelopment partners should• Further increase their support for infrastructure where it isnot feasible for the private sector to invest• Increase“aid for trade”measuresGRANT & HIGHLY-CONCESSIONAL LOANSFROM OFFICIAL SOURCESTraditional donors should• Recognize that aid has the potential to become moreeffective as African economies grow and capacitygradually increases• Increase“triangular cooperation”where traditional donorsprovide finance and emerging economies supply expertiseMultilateral Development Banks and bilateral donorsshould• Take measures to smooth the impact of graduationpolicies on countries that graduate from access tomultilateral development banks soft fundsSEMI-CONCESSIONAL AND NON-CONCESSIONAL FLOWS FROM OFFICIAL ANDMARKET SOURCES• Ensure that less concessional loans are devoted to well-considered and well-executed activities that enhancecredit worthiness in the long run to avoid the dangers ofdebt overload in the medium termRECOMMENDATIONS
  • 88AFRICA PROGRESS REPORT 2012Foreign direct investment to Africa has increasedconsiderably over the past decade. FDI grew fromabout $10 billion in 2000 to over $50 billion by 2006,and has remained at or above that level ever since,with a peak of over $70 billion in 2008. Africa’s shareof global FDI increased over the same period from0.7 to 4.5 per cent, North Africa typically accountingfor about a third of this figure. For Sub-SaharanAfrica, absolute amounts exceeded $30 billion in2006 and have remained at or above that level ineach succeeding year112. There is scope to attracteven more FDI, however. Excluding Angola, wherehydrocarbon-based FDI has been exceptionallyhigh, FDI has averaged only 2.6 per cent of GDP inthe Sub-Saharan African markets classified by theIMF as “Frontier Markets,” compared with 4 per centof GDP in other Frontier Markets during 1991–2009113.As in previous years, direct investment in Africa in2010 was mostly from developed countries. Amongdeveloping countries, China, India and the UnitedArab Emirates were the main source countries in2010. By contrast, FDI from one Sub-Saharan countryto another is low, according to UNCTAD, accountingin 2010 for only 5 per cent of the total in terms of valueand 12 per cent in terms of number of investments114.South African investors apart, intra-regional FDIis particularly underdeveloped. Some Africantelecommunications and banking companies havenonetheless expanded investment within Africa atan impressive rate from a very low base115.The balance between aid and FDI variesconsiderably across Sub-Saharan Africa. In 2010,there were 11 countries, including Mauritius and theSeychelles and a clutch of resource-rich mainlandstates, where FDI was more than twice as muchas country programmable aid116. In 25 countries,mostly low-income countries that are either not richin resources or are emerging from conflict, countryprogrammable aid was over twice FDI; 11 were in anintermediate position.Although FDI in 2010 was below the 2008 peak,and there are instances of disinvestment117, thereseems every reason to expect robust growth overthe medium term, for at least three reasons. Africangovernments have significantly improved the businessclimate, even though there is still much to do. Strongdemand seems likely to drive substantial furtherforeign investment in minerals and hydrocarbons(and maybe also renewable resources such astimber and food crops). And Africa’s own growth willprovide increasing opportunities for foreign investorsacross a widening range of economic sectors.While this is a broadly encouraging picture, FDIcould be increased if governments take actionin several areas. In this section, we examine two:further enhancing the business environment andencouraging investment outside the natural resourcesector.Improving the business environmentForeign direct investment is vital both for the financialresources that it brings and for the skills, technologyand access to markets that it offers. But domesticprivate investment is also extremely important, andthere are usually no good reasons to offer foreigninvestors better treatment than local businesses. Abusiness environment that is good for local business isalso going to be attractive to foreign investors.Nor is it desirable to offer extreme tax breaks tostimulate foreign investment. As CABRI notes,“revenues foregone by virtue of tax incentives forinvestment tend to exceed by a wide margin therevenue costs expected before the concession isput in place.”118In providing an attractive tax systemfor investors, African governments should aim fortransparency, certainty and predictability of taxtreatment before exempting international investorsfrom all or part of their fiscal obligations.2. Creating a betterclimate for foreigndirect investment
  • 89Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeStimulating investment outside thenatural resource sectorThe huge appetite for investment in Africa’shydrocarbons sector is shown by the inflows toAngola over the past decade and by rapidly growinginvestments by foreign companies in Ghana. UNCTADfigures show that in terms of industry distribution, theprimary sector – mainly coal, oil and gas – accountedfor 43 per cent of all FDI to Africa in 2010, withmanufacturing receiving 29 per cent (of which almosthalf was in the metal industry), and services (mainlycommunications and real estate) 28 per cent119.While foreign investment is essential in the vital andtechnologically challenging natural resource sector,the long-term economic health of Africa requiresa more diversified pattern, increasing investmentespecially in manufacturing, which could createmany more jobs per dollar invested than thecapital-intensive minerals and hydrocarbon sectors.Some argue that the time is particularly propitiousfor attracting FDI from Chinese and other Asiancompanies looking to outsource production as theirlabour costs rise120. Adding value to agriculturalproduction is also important, as we note in Part II.Given the small size of most African markets, onlyexport-oriented industry can achieve significantscale in much of the region. Securing foreign directinvestment in export-oriented processing andmanufacturing will require action by both Africa andits principal markets. African governments need tomaintain competitive exchange rates (a particularchallenge for resource-rich economies) andaddress infrastructure constraints, both nationallyand regionally121, skill shortages, and administrativeconstraints, including on cross-border movementof goods and the proliferation of checkpoints ontransport routes122. Africa’s partners need to domore through “aid for trade” measures to helpgovernments improve infrastructure and skills andremove unnecessary bureaucratic restrictions.
  • 90AFRICA PROGRESS REPORT 2012As noted above, Sub-Saharan Africa has madereal progress not only in growth but also inpoverty reduction and human development moregenerally. The increases in aid have flowed notleast to these areas – areas that remain importantgiven that the growth pattern in many Africancountries is not spreading its benefits to the poorestand the marginalised. Future levels of aid and itseffective management continue therefore to bevital issues for many Sub-Saharan African countries,where many countries are still relatively dependenton aid. Worldwide, most aid-dependent countriesare small islands and states emerging from majorconflicts. In Africa, however, some countries that fitneither of these categories were still receiving aidin 2009/10 that represented over 10 per cent of GNI(Figure 25).Future levels of aid from traditionaldonorsThe latest figures for official development assistanceare for 2011. They show a decline of almost 3 percent in ODA from members of the OECD DevelopmentAssistance Committee (DAC) from the figure for 2010 –the first decline in ODA this century once distortions fromdebt relief are excluded. Bilateral aid to Sub-SaharanAfrica was US$28.0 billion, representing a fall of 0.9 percent in real terms compared to 2010. By contrast, aidto the African continent increased by 0.9 per cent toUS$31.4 billion, as donors provided more aid to NorthAfrica after the revolutions in the region. Lookingforward, the OECD’s figures for country programmableaid123currently provide the only basis for assessingfuture aid levels124, although as the International AidTransparency Initiative develops125, transparency ofdata on forward-looking flows should improve.After relatively rapid increases in gross countryprogrammable aid from traditional donors (8 percent annually worldwide and 12 per cent annually inAfrica from 2007 to 2009), its growth will be modestfrom 2010 to 2013: 2 per cent worldwide and only 1per cent in Africa, with multilateral agencies providingmost of the increase. This is not unexpected, giventhe constraints many donors are facing, but it isnevertheless regrettable. In most countries aid is 1 percent of public expenditure or less, and countries likeSweden and the United Kingdom have shown thatthis can be maintained or even expanded in timesof austerity. Traditional donors should also take notethat aid to Sub-Saharan Africa is likely to be moreproductive than in any recent period as Africaneconomies grow and capacity gradually increases.What happens after 2013 is of course uncertain, butaid from the traditional bilateral and multilateralsystem seems bound to decline significantlyrelative to domestic taxation and most otherinternational financial flows. Continent-wide,country programmable aid for Africa increased as aproportion of African GNI from 2.1 per cent in 20053. Prospects forconcessional financeCountry 1999-2000 2004-2005 2009-2010Mozambique 21 22 21Malawi 26 20 19Rwanda 19 23 18Ethiopia 10 12 13Burkina Faso 10 13 13Tanzania 8 17 12Uganda 13 13 12Mali 10 17 11Niger 12 14 11Zambia 23 20 8Source:OECD-DAC,2012Figure 25: Official development assistance as a share ofgross national income
  • 91Jobs, Justice and Equity: Seizing Opportunities in Times of Global Changeto 2.4 per cent in 2010 but is expected to fall by2013 to 2.3 per cent, and there seems every reasonto expect this downward trend in aid dependenceto continue. One signal is that the EuropeanCommission has proposed an increase of only 13per cent in the European Development Fund (oneof the main sources of grant aid to Africa) for theperiod 2014–2020 over the previous seven years, avery modest annual growth rate that is unlikely toexceed inflation. On the other hand, as thriving Asianeconomies become ineligible for help from the WorldBank’s soft-loan arm, the International DevelopmentAssociation (IDA), Sub-Saharan African countries thatare still eligible should receive a stronger financialcontribution from this key source of grants and highlyconcessional credits, even if traditional contributorsare under fiscal pressure. However, countries suchas Ghana, the Republic of Congo, Cameroon andNigeria may also become ineligible in the future127.When this happens, it is vital that they receive goodaccess to “harder” loans from multilateral institutions.While it is a matter for regret that assistance toSub-Saharan Africa from traditional official sourcesis flattening off, the picture of African growthoutpacing the inflow of concessional resourcesis very encouraging, and of course parallels whattook place in Asia from the 1980s128. But the taxbase of many poorer African countries will notbe able to substitute fully for aid for a generationor more. Sustaining levels of aid to Africa fromtraditional suppliers is essential to maintain socialand economic progress, particularly in the poorercountries, which are facing additional challengesimposed by climate change.Emerging support for Africa risesBy contrast with the traditional donor sources,it seems probable that grants and highlyconcessional loans129from emerging economies havegood potential for growth over the coming decade.Africa has long experience in receiving official fundsfrom countries outside the “traditional” bilateral donorsthat belong to the OECD Development AssistanceCommittee and the established multilateral agencies.Countries as varied as Saudi Arabia, Libya, China andRussia have financed activities in Sub-Saharan Africa.The number of sources of such assistance has grownsignificantly in the past decade or so and the overallamounts have increased dramatically. Brazil, India andTurkey, for example, have all developed substantialprogrammes in a range of African countries. By a verylarge margin, however, China is the most significant ofthese donors.Recent growth in grants and highly concessional fundsstarted from a modest base. It is estimated that China,forexample,disbursedaboutUS$1.4billioninthesetypesof assistance in 2009130. These contributions financesignificant amounts of technical assistance – reflectingthe strong institutions of the emerging economies andthe relevance of their skills to African conditions – aswell as capital projects in both infrastructure and socialsectors (e.g., hospitals and schools)131. These South–South funding channels have value and potentialfor Africa, particularly where vital recurrent fundingcan be assured. There is also potential for increasing“triangular cooperation,” in which traditional donorsprovide finance and emerging economies supplyexpertise to African projects.
  • 92AFRICA PROGRESS REPORT 2012As African economies expand, the share ofsemi-concessional and market-based (or non-concessional) loans to African governments mayalso be expected to increase. These loans alreadymeet some important funding needs, especially foreconomic infrastructure. The main types of finance inthis category are export credits, with or without someform of subsidy, and loans from state developmentbanks and other development financing institutions,though these are often focused on the private sector;and loans from the “hard windows” of the multilateraldevelopment banks.Many export credit agencies of DAC members lostlarge amounts of money through inappropriatelending in the 1970s and 1980s, so they have pursuedvery cautious approaches in Africa ever since (Figure26). Most of their development finance institutions,with some exceptions such as the German KfW andthe European Investment Bank, are modest lenders tothe public sector in Africa. It will be interesting to seewhether export credit agencies from DAC countriesbegin prudently to re-engage with Sub-SaharanAfrica, and if so, whether they can avoid the mistakesof the past.4. Growing Africaneconomies and accessto ‘harder’ loansFigure 26: OECD export credits to Africa, 1966–200905003 0001 0003 5001 5002 0002 5001966197419821990199819681976198419922000197019781986199420021972198019881996200420062008Export credits from DAC members (extended)2008ConstantUSDMillionsSource:OECDDevelopmentCentre(2011)RecalibratingDevelopmentCo-operation:HowCanAfricanCountriesBenefitfromEmergingPartners?
  • 93Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeSource:DahmanSaidi,MyriamandWolf,Christina(2011,March14)OECDDevelopmentCentre,presentationatOxfordUniversityChina/AfricanNetworkConferenceFigure 27: Complementary financing from aid and loans to Africa020%40%60%80%100%020%40%60%80%100%Public facilities (health, education, civil buildings etc.)Energy supply/resource developmentInfrastructure IndustryAgriculture Others20097%3%61%9%16%4%Social sectors (health, education, etc.)Production (agriculture, industry, trade etc.)Infrastructure (roads, energy etc.)Multisector8%10%17%65%CONCESSIONAL loans china,sectoral distribution 2009oda to africa ,sectoral distribution2005-2009Meanwhile, countries including India and China areevidently willing to make available larger volumes ofexport credit and other non-subsidised lending to Sub-Saharan Africa. China, in particular, has developed avery large concessional credit programme through itsEXIMBANK, under which export credits benefit from agovernment subsidy, while the China Development Bank,as well as managing the China–Africa DevelopmentFund, which supports Chinese enterprises in Africa,provides a growing number of unsubsidised loans from itsown account. As a result, emerging economy providers,and China in particular, are much more significant asproviders of semi-concessional and non-concessionalfunds than of grants and highly concessional funds.This leads to a strong complementarity betweendonors from traditional and from emerging economies.Traditional donors are using their relatively large grantand near-grant funds particularly for the social sectors,while African countries are accessing less concessionalemerging economy finance for infrastructure and theproductive sector (Figure 27).
  • 94AFRICA PROGRESS REPORT 2012Before the 4th High Level Forum on Aid Effectiveness(29 November to 1 December 2011) in Busan,South Korea, African governments, parliamentariansand civil society set out an impressive statement ofAfrica’s approach to working with its internationalpartners133. This marked a determination in Africato move away from dependence on aid, andcalled upon Africa’s partners to align their supportwith the continent’s priorities, thereby ensuring thataid complements domestic financing and otheralternative sources for effective development. It alsocalled on African countries to scale up policies thatlook beyond aid through effective and innovativeuse of domestic resources and development ofappropriate implementing capacities, with theprivate sector playing a key role. The statement alsoreiterated that dialogue on global developmentcooperation should shift from aid effectiveness todevelopment effectiveness, focusing on inclusiveness,equity, gender equality, environmental sustainabilityand better development results.Aid pessimism and its close cousin, aid cynicism, havegrown in recent years. Some of the concerns raisedover aid effectiveness have been well placed butthe strong effort of DAC to respond to them mustbe recognized as well as the important conclusionof the last Busan conference. For example, theBusan meeting resulted in a commitment to “workto improve the availability and public accessibility ofinformation on development cooperation and otherdevelopment resources.” If donors stick to the detailof the commitments they made in Busan, this wouldradically improve the availability of information,not least at country level, and largely deal with theconcerns expressed about both traditional donorsand emerging-economy providers.5. Management ofOfficial SupportOfficial flows from emerging-economy donors resembleEuropean mixed credits and unsubsidised lendingbefore Africa’s debt crises of the mid-1980s. Many ofthe capital assets financed by such aid were poorlyconceived and poorly maintained, however, andlending for such projects was a leading cause of Africa’sdebt problems. Most Sub-Saharan African countriesnow have historically low debt-service ratios (thoughstock-of-debt figures have risen significantly in somecountries in the years following debt cancellation), anda measure of borrowing is therefore an appropriatesource of development finance – as long as overalllevels are prudent and borrowing is invested in well-designed activities of genuinely high priority.In this connection, Africa stands to benefit from theagreement132between President Barack Obama of theUnited States and Vice-President Xi Jinping of China inFebruary 2012 to establish an international working groupthat will include other major providers of government-backed loan guarantees, with the goal of concluding anagreementby2014onguidelinesforexportcreditfinancing.Meanwhile, the World Bank and the AfricanDevelopment Bank currently offer loans from their“hard windows” to only a very small number of Sub-Saharan countries. In the 2011 financial year, forexample, the World Bank provided $7.4 billion ofnew commitments to Sub-Saharan Africa from its softwindow (the IDA), but a mere $56 million from its hardwindow, while the African Development Bank lists onlyCape Verde, Nigeria, Seychelles, Mauritius, Botswana,Namibia, South Africa and Swaziland as eligible for itshard-window lending to the public sector. This reflectsthe limited creditworthiness of African borrowers, manyof which remain extremely poor and very dependenton volatile export commodity prices. But the situationis going to have to evolve as Sub-Saharan countrieslose their eligibility for soft funds and improve theircreditworthiness. The World Bank, which has arguablybeen too cautious in making its IBRD funding availableto creditworthy former IDA borrowers – and indeed toIDA borrowers that could benefit from a blend of IDAand IBRD resources – should look positively at investingin such countries.The less concessional the funds, however, the moreimportant it becomes to ensure that they are devotedto well-considered and well-executed projects thatenhance creditworthiness in the long run. Without this,the dangers of debt overload in the medium term areobvious. There are also concerns about arrangementsthat involve repayments in commodities, the priceof which is not known in advance, and where theadvantages to lender and borrower are unclear. In thisfinal section, we therefore turn to the key issue of theeffective management of inflows.
  • PART VIRECOMMENDATIONSAND CONCLUSIONS
  • 96AFRICA PROGRESS REPORT 2012Priority area: Keeping the MDG promiseGuiding principles selected Policy actionsAfrican governments shoulddevelop action plans for a “bigpush” towards the 2015 MDGtargets, including:• goals for narrowing socialdisparities linked to wealth,gender, rural/urban dividesand other factors in areassuch as child survival, nutrition,maternal health, water andsanitation, and education;• economic growth policies thatreduce poverty by reducingincome inequality.Data and reporting systems thatmonitor and redefine action forachieving national developmentgoals and the MDGs shouldbe strengthened and opengovernment and open datapolicies should be adopted.African governments and civilsociety should take the leadin developing the post-MDGagenda, including a time framefor eradicating extreme poverty.MDG 1 – Extreme povertySet a course for eradicating hunger and reducing extreme incomepoverty to 10 per cent by 2025.MDG 2 – EducationBuild on the achievements of the Global Partnership for Education byconverting it into an independent multilateral financing mechanism.Focus its remit on accelerating progress towards the 2015 goals,with an emphasis on helping disadvantaged groups and improvinglearning achievement.MDG 3 – Gender equitySet out government strategies for equalizing opportunity for young girlsand women. Empower women by promoting their active participationin social, economic and political issues and specifically by enablingthem to have access to family planning choices.MDGs 4 and 5 – Child and maternal mortalityPut child survival and maternal mortality at the center of 2015action plans and include non-health interventions, such as accessto safe water and sanitation, girls’ education, and women and girlsempowerment. African leaders should take greater responsibility,learning from the effective Africa Leaders Malaria Alliance.Roll out new vaccines against deadly strains of diarrhea andpneumonia.MDG 6 – Infectious diseasesBuild up health systems, support health workers (by providing drugs,diagnostics and medical equipment) and make treatment accessibleand affordable.Promote sustainable, predictable financing for health (from domesticresources, where possible, and from development partners) to preventdiseases (including the possible resurgence of malaria), promoteeffective and efficient use of resources, and increase accountabilityand transparency.MDG 7 – Access to water and sanitationDonors should swiftly replenish the Rural Water Supply and SanitationInitiative (RWSSI) and the African Water Facility (AWF).MDG 8 – International partnershipsDevelopment partners should act on longstanding aid commitmentsincluding the EU commitments to make progress on reaching aidtarget of 0.7%, G8 commitments made in Gleneagles in 2005, andthose of a wider range of development partners at Busan in 2011.Facilitating private-sector investments should be a focus.Aid architecture should be strengthened to support conflict-affectedand fragile states.The UN, World Bank and African Development Bank should developmore effective systems for analyzing trends in poverty, and othersocial development outcomes, with a stronger emphasis on measuringequity. Building national statistical capacity should be a top priority.
  • 97Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangePriority area: Agriculture and food securityGuiding principles selected Policy actionsPut smallholder farmers andagriculture productivity at thecentre of national food securityand nutrition strategies, with afocus on women farmers.Strengthen social protection andfood safety nets.Develop risk management andadaptation systems to prepare forclimate change.Ensure that Africa’s land andwater resources are sustainablymanaged to provide food andnutrition security and livelihoods.Protect Africa’s farmers againstlarge-scale speculative landpurchases.Focus policies on householdenterprises to reduce poverty anddependence on agriculture.Strengthen early warning andresponse systems for food securitycrises.Focus on smallholder farmers by investing in:• research and extension systems that address agro-ecologicalproblems in several countries rather than individual countries, toincrease cost effectiveness and regional integration;• new seeds, fertilisers and technologies for rain-fed agriculture;• rural infrastructure;• post-harvest technologies to minimize wastage, improve producequality and resolve labour bottlenecks;• youth engagement in agriculture throughout the value chain.Land: Strengthen legislation to give women farmers equal land rights.Carefully assess large-scale land deals and consider a moratoriumpending legislation to protect smallholder farmers and communities.The African Union should develop a framework for managing foreigninvestment in agriculture.Risk management: Focus on social protection by providing cash orfood during periods of stress, to enable rural producers to cope withoutcompromising their long-term productivity or withdrawing their childrenfrom school.Development partners: The meetings of the G8 in the United States in2012 and in the United Kingdom in 2013 should renew and intensifycommitment to improving food security and nutrition in Africa.Climate change: Developed countries should step up support foradaptation financing in Africa through the $30 billion “fast start”provision (2010-2012) and the $100 billion in overall financing agreed inCopenhagen (2009) and Durban (2011).
  • 98AFRICA PROGRESS REPORT 2012Priority area: Education and skillsGuiding principles selected Policy actionsSet targets for expanding earlychildhood care and educationby 2015.Accelerate progress towardsuniversal primary education byfocusing on marginalised groups.Improve education quality andlearning outcomes so that allchildren can read, write andmeet basic numeracy standardsafter three years in school.Raise the quality of teachertraining and in-service support.Strengthen second-chanceeducation and acceleratedlearning programs.Ensure post-primary education tooffers the skills needed for securelivelihoods and jobs.Develop equitable education strategies that:• expand early childhood care and education under an integratedhealth and education framework;• accelerate progress towards universal primary education by 2015,with specific targets for hard-to-reach children;• strengthen equity in public spending by targeting disadvantagedregions, schools and pupils, including girls and marginalisedgroups;• put in place a national learning assessment system, reformteacher training and develop a curriculum to facilitate effectivechild-centered learning.Development partners: Development partners should honorcommitments made in 2000 by providing $16 billion a year in aid forbasic education in low-income countries.The World Bank has committed to increase IDA lending to basiceducation by $750 million over the period 2011 to 2015. Creatinga baseline that reflects actual lending over the past 3-5 years, thiscommitment implies that IDA loans for basic education shouldaverage $1.1-1.3bn annually.Development partners should strengthen support for educationin countries affected by conflict or embarking on post-conflictreconstruction, including $400 million annually for an “educationcatch-up” plan in South Sudan.
  • 99Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangePriority area: Good governance and democracyGuiding principles selected Policy actionsAfrican regional institutions shouldtake the lead in consolidatingdemocracy and promoting goodgovernance.Reform the security sector toreduce the incentives for drugtrafficking and organized crime.Strengthen transparency andaccountability in politics andeconomic management.Strengthen management ofnatural resources to maximizeeconomic growth andemployment, and to reducepoverty.Reinforce the requirement forleaders to respect term limits,and increase investment in theinstitutions that hold governmentsto account (parliaments, auditbodies, free media, think tanks,civil society).Promote Africa’s global positionand voice.Democracy: With the support of the AU and UN, ECOWAS shouldintensify efforts to resolve the crises in Mali and Guinea-Bissau andprevent regional spillover effects. The international communityshould adequately finance the ECOWAS Standby Force and supportdiplomatic efforts.The AU should hold leaders of member states to account, drawingon the groundbreaking norms and standards it has developed andensuring that these are backed by credible sanctions.Governance: Prosecute companies for bribing African leaders. Expandthe application of the Extractive Industries Transparency Initiative (forexample, by requiring extractive companies to publish payments) andthe Natural Resource Charter.The EU should adopt the principles in the Dodd-Frank Amendment.Voice: To avoid marginalisation in the emerging G20 processes,African leaders should make the case for broad-based participation(rather than elevated observer status) and articulate an Africanagenda.
  • 100AFRICA PROGRESS REPORT 2012Priority area: Jobs, growth and tradeGuiding principles selected Policy actionsMake employment creation anexplicit objective of economicpolicy.Develop the skills base forsustained economic growththrough training, second-chanceeducation for youth, and betteralignment of education withemployment.Strengthen moves towardsregional economic integration.Integrate trade and investmentpolicies into wider strategiesaimed at raising productivity,facilitating entry into higheradded-value areas of production,and expanding opportunitiesfor African companies and theirworkers.Develop economic infrastructureto strengthen competitivenessand expand opportunities.Provide a supportive environment for the four major sources ofemployment: small and medium-sizes companies, the informal sector,off-farm rural enterprises and smallholder agricultureAfrican governments should:• increase investment in skills development for the informal sector,with a special focus on learning opportunities for youth;• urge China and other partners to improve market access forAfrican goods and investment that supports local companies andemployment of Africans, and technology and skills transfer;• accelerate plans for regional integration;• work collectively in the WTO and other fora to address sharedconcerns in areas such as market access, with the AfricanUnion supporting measures aimed at strengthening capacity tonegotiate with foreign investors.Trade and investment partners:• The EU should withdraw demands for reciprocal liberalisationunder the economic partnership agreements for Africa, and usedevelopment assistance to promote Africa’s export capabilities.• Africa’s trading partners should reconsider in a post-Dohaenvironment how trade access for African agricultural, processedand manufactured products can be enhanced, including byreducing/eliminating tariff escalation.
  • 101Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangePriority area: Resource mobilisationGuiding principles selected Policy actionsWhile Africa should andwill gradually reduce thedependence of some countrieson aid, providers of aid shouldnot be pulling back just when theproductivity of aid to a growingcontinent is at a peak.All development partners and other providers should implement theirpromises to Africa and support a “big push” to maximize achievementof the MDGs.African governments should:• continue to improve the mobilisation of domestic resources,where possible though broadening coverage and by tacklinginappropriate exemptions;• work to attract FDI, particularly for labour-intensive activities,not by offering inappropriate special incentives but by creatinga positive environment for all business including domestic,predictable conditions for investors, and transparent enforcementof contracts;• ensure that all financial transactions that involve commitments bythe state (e.g. loan repayments and guarantees) are published,centrally approved and managed prudently within foreseeableresources. All official borrowing on semi-concessional or marketterms should be allocated to specific activities with a higheconomic return.Lenders should respect the policies in the African Consensus andPosition on Development Effectiveness set out ahead of the Busanforum.African governments, parliaments and civil society should takefurther steps to encourage the productive and transparent use of allinflows, whether concessional or not; and providers should supportimprovements in transparency as agreed at Busan and outlined in theInternational Aid Transparency Initiative (IATI).
  • 102AFRICA PROGRESS REPORT 2012CONCLUSIONWe started this report by cautioning against highlypolarised perspectives on Africa’s prospects.Perhaps more than at any time in recent years,there is cause for cautious optimism. The region hasregistered a decade of strong economic growth andhas recovered strongly from the global recessions.The private sector is emerging as a vibrant andinnovative force for change. Domestic and foreigninvestment is rising. For the first time in a generation,poverty levels are falling – and many countrieshave witnessed strong progress towards the MDGs.Democracy is throwing down deeper roots, with multi-party elections now the firmly established rule ratherthan the exception. Inevitably in a region as diverseas Africa, there are many national exceptions to thisbig picture canvas. Yet the favourable constellationof strong economic growth, improving humandevelopment, and more accountable governancemeans that African leaders could set the scene for abreakthrough that transforms the lives of the currentgeneration and the prospects of future generations.That outcome is not automatic. Trend is not destiny –and Africa’s future will be shaped by how effectivelythe region’s governments and development partnersrespond to the great challenges that lie ahead. Inthis report, we have identified a number of concernsthat, in our view, merit urgent consideration. Acrossthe world, we have seen the rise of social movementsand the spread of public attitudes contesting whatare viewed as unacceptable levels of inequality. Weare of the strong view that inequalities across muchof Africa are ethically indefensible, economicallyinefficient and politically destabilising. That is whywe call upon Africa’s leaders to put equity and thedevelopment of more inclusive societies at the heartof their planning for the future.This message should not be interpreted as part ofan anti-growth agenda. Consistently high growthis unquestionably a condition for sustained – andsustainable – progress in Africa. Similarly, it isimportant that Africa’s leaders not be mesmerisedby economic growth in and of itself. They mustalso consider the quality of growth, the distributionof benefits from wealth creation, the opportunitiesthat poor people and women have to participatein growth, and the relationship between growthand progress towards the MDGs. It is clear fromthe experience of several high-growth economiesaround the world that growth alone will notautomatically deliver accelerated progress towardsthe international development goals in maternalhealth, child survival or hunger.The 2015 target date for the MDGs provides anopportunity to focus national and internationalattention on parts of society that have been leftbehind. The Africa Progress Panel welcomes theemerging debate on the post-MDG framework.However, we are concerned that governmentsare losing sight of the 2015 promise enshrined inthe original MDG targets. The value of any futurecommitments will be diminished by a failure toaccelerate progress towards these targets. Thatis why we call for a ‘big push’ towards the MDGs,with every government setting out a best endeavourstrategy for getting as close as possible to the goals– and donors backing their efforts by acting on theiraid commitments.In our view, both the current and future MDGframeworks should attach far more weight to equitytargets. The MDG promise was made for everyone.Yet in many countries, people who are poor, femaleand rural face acute disadvantages. And becauseof inequitable patterns of public spending they havethe last call on public spending. We are convincedthat it is time to integrate equity targets into the MDGframework. These targets could take the form ofspecific goals aimed at reducing gaps in, say, childmortality, maternal health, and education basedon wealth, gender, rural-urban divisions and widermarkers for disadvantage. Reducing inequalitiesin basic life-chances is a moral imperative. But itwould also spur prospects for economic growthand accelerate progress towards the MDG targetsthemselves.Looking ahead, there are immense opportunities.African economies are becoming more integratedwith high-growth emerging markets. The region’svast mineral wealth is driving growth and acting asa magnet for foreign investment. With populationgrowth and rising wealth driving up demand for food,Africa’s farmers could benefit from opportunities inglobal markets. As the centre of gravity in the worldeconomy moves south and east, the emerging forms
  • 103Jobs, Justice and Equity: Seizing Opportunities in Times of Global Changeof global economic governance could provideAfrica with a greater voice. Meanwhile, the revolutionin information and communication technology hascreated an opportunity for Africa to leapfrog old,outmoded technologies and adapt new innovations.For each of these opportunities there is acorresponding risk. In the absence of strategiesaimed at facilitating entry to higher value-addedareas of production, there is a danger that Africa’smineral wealth and integration with emerging marketswill reinforce dependence on the export activitiesthat generate modest levels of employment, haveweak linkages to local markets, and leave the regionvulnerable to adverse price trends. Rising globaldemand for food could generate incentives for a newwave of speculative land-grabbing, with the profitmargins of hedge funds and other investors overridingnational and regional food security. Paradoxically,the rise of the BRICS and the G20 could leave Africamore, not less, marginalised in global economicgovernance. And failure to lower the cost of Internetaccess could limit the democratising and leapfroggingpotential of ICTs. In all of these areas, governments willneed to develop proactive policies aimed at seizingopportunity and mitigating risk. Laissez-faire is unlikelyto deliver results. That is why we call for more activepolicies in agriculture, manufacturing and tradeaimed at strengthening competitiveness, supportingtechnological innovation, and protecting the landrights of Africa’s farmers.The future is never entirely predictable – but there aretwo areas in which policy failure today will have highlypredictable, and damaging, consequences for thefuture. The first is youth employment. Africa’s youthbulge could create a large demographic dividend.Young Africans have extraordinary levels of energyand creativity. They also have hopes, ambitions anddreams. What they are lacking is the opportunity todevelop the skills they need to realise their potential.Stated bluntly, the region’s education and trainingsystems are not currently fit for the purpose ofproviding decent quality education for all. Failure totackle the twin crisis in access to school and learningin school will not just limit the right to education,undermine prospects for economic growth, andwaste human potential. It will also render countriesall the more vulnerable to the political and socialinstabilities that inevitably accompany urbanisationand youth unemployment.The second area that requires urgent policy attentionis smallholder agriculture. It is sometimes forgottenthat farming is the primary source of employment andfood security for most Africans. Yet for far too long,smallholder farmers have suffered from a combinationof indifference and actively damaging policies. Withthe right incentives, institutional reforms and publicspending policies in place, we are convinced that itis possible to dramatically increase the productivityof smallholder agriculture, to expand opportunitiesfor rural employment, and strengthen the economicinteraction between urban and rural economies. Bycontrast, continued neglect of smallholder farming willundermine economic growth, reinforce inequalities,and increase the region’s exposure to the risks thatcome with over-dependence on food imports.Africa was never a ‘hopeless continent’. It was – andremains – a region of immense potential, much ofit unfulfilled. With decisive leadership at home andsustained support from development partners, thereis now an opportunity to unlock that potential andto set course for a future of shared prosperity, moreequal opportunity, and political stability. The journeywill not be easy. But the prize is great and it is withinreach – and we must collectively seize the moment.
  • 104AFRICA PROGRESS REPORT 2012
  • annexes
  • 106AFRICA PROGRESS REPORT 2012list of ACRoNYMSAfDB African Development BankAGOA African Growth and Opportunity ActAGRA Alliance for a Green Revolution in AfricaAPP Africa Progress PanelAPRM African Peer Review MechanismART Anti-Retroviral TherapyAU African UnionAWF African Water FacilityCABRI Collaborative Africa Budget Reform InitiativeCADF China – Africa Development FundCDB China Development BankCOP Conference of PartiesDAC Development Assistance CommitteeEAC East African CommunityECLAC Economic Commission for Latin America and the Caribbean (UN)EISA Electoral Institute for Sustainable Democracy in AfricaEITI Extractive Industries Transparency InitiativeEU European UnionEXIM Export – Import BankFAO Food and Agriculture Organization (UN)FDI Foreign Direct InvestmentGAVI Global Alliance for Vaccines and ImmunizationGDP Gross Domestic ProductGNI Gross National IncomeGPE Global Partnership for EducationHDI Human Development IndexIBRD International Bank for Reconstruction and DevelopmentICC International Criminal CourtICT Information and Communication TechnologyIDA International Development AssociationIFC International Finance CorporationIFES International Foundation for Electoral SystemsIFPRI International Food Policy Research InstituteIMF International Monetary FundIPCC Intergovernmental Panel on Climate ChangeITU International Telecommunication UnionMDG Millennium Development GoalNBER National Bureau of Economic ResearchNEPAD New Partnership for Africa’s DevelopmentNRC Natural Resource CharterODA Official Development AssistanceOECD Organization for Economic Cooperation and DevelopmentOGP Open Government PartnershipRWSSI Rural Water Supply and Sanitation InitiativeSTI Science, Technology and InnovationUNCTAD UN Conference on Trade and DevelopmentUNEP UN Environment ProgrammeUNESCO UN Educational, Scientific and Cultural OrganizationUSIP United States Institute of PeaceWDR World Development ReportWHO World Health OrganizationWTO World Trade Organization
  • 107Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeLIST OF FIGURESFigure 1: Africa’s Successes and Setbacks 10-11Figure 2: Growth rates of African GDP, 2000–2013 14Figure 3: Fastest-growing African economies in 2011 14Figure 4: Africa’s small middle-class 17Figure 5: Inequality: Chances to survive birth and early childhood 19Figure 6: Income inequality 23 Figure 7: Maternal and child health at the heart of MDG progress 26Figure 8: Water: A critical challenge not only for the MDGs 28Figure 9: Urbanisation facts and trends 33Figure 10: Demographics 34-35Figure 11: Slum population in urban Africa 36Figure 12: Food security 38Figure 13: Land grabs and property rights 42Figure 14: Africa and China’s growing partnership 50Figure 15: ICTs for social and economic development 53Figure 16: Civic activism, freedom and corruption 55Figure 17: Social Uprising 56-57Figure 18: Electoral Map 63Figure 19: Conflict and fragility 65Figure 20: Natural Resources 70-71Figure 21: The education inequality tree 76Figure 22: Pastoralists face extreme education deprivation 78Figure 23: Share of GDP from extractive resource rents and official development assistance, 2009 85Figure 24: Managing funds for development 86-87Figure 25: Official development assistance as a share of gross national income 90Figure 26: OECD export credits to Africa, 1966–2009 92Figure 27: Complementary financing from aid and loans to Africa 93LIST OF BOXESBOX 1: Across Sub-Saharan Africa: strong but uneven growth 15BOX 2: Rising slowly – an African middle class 17BOX 3: The eurozone crisis is harming many African economies 18BOX 4: South Sudan – still awaiting an education peace dividend 30BOX 5: The ‘forgotten class’ – Africa’s farmers 43BOX 6: Global economic governance in flux 45BOX 7: Can Africa replicate China’s transformation? 47BOX 8: Can cloud computing serve development? 52BOX 9: Social media – the new tools of democracy? 55BOX 10: Taking the pulse of African democracy 61BOX 11: When military figures hold on to power 62BOX 12: Regional governance initiatives show promise 67
  • 108AFRICA PROGRESS REPORT 2012REFERENCES USED IN THE FIGURESFigure 1: Africa’s Successes and SetbacksAfrican Economic Outlook. n.d. AEO launches a new database on African fiscal performance. AEO WEBSITE.Accessed in April 2012. Available from http://www.africaneconomicoutlook.org/en/aeo-launches-a-new-database-on-african-fiscal-performance/.International Foundation for Electoral Systems (IFES) n.d. Election Guide website. Accessed on 22 April, 2012.Available on http://www.electionguide.org/Electoral Institute for Sustainable Democracy in Africa (EISA). N.d. EISA website. Accessed on 22 April, 2012.Available on http://www.eisa.org.za/Global Financial Integrity, 2009. Illicit Financial Flows from AfricaIMF, 2011. Regional Economic Outlook. Sub-Saharan Africa - Sustaining the Expansion.ILO, 2011. Towards decent work in Sub-Sahara Africa: Monitoring MDG employment indicatorsLozano R., Wang, H., Foreman, K., Rajaratnam, J., Naghavi, M., Marcus, J., Dwyer-Lindgren, L., Lofgren, K., Phillips,D., Atkinson, C., Lopez, A., Murray, C. (2010). Progress towards Millennium Development Goals 4 and 5 onmaternal and child mortality: an updated systematic analysis. The Lancet.Mo Ibrahim Foundation, n.d. The Ibrahim Index of African Governance 2011. Mo Ibrahim Foundation website.Accessed on 22 April, 2012. Available on http://www.moibrahimfoundation.org/en/section/the-ibrahim-indexPinkovskiy, M., Massachusetts Institute of Technology; Sala-i-Martin, X., Columbia University and NBER, 2010 .African Poverty is Falling...Much Faster than You Think!The Economist, 2011. A more hopeful continent - The lion kings? The Economist website. Accessed on 22 April,2012. Available on http://www.economist.com/node/17853324Transparency International, 2011. Corruption Perceptions Index 2011.Tripp et al. 2009. Laws and policies on gender equality and women’s representation in parliaments in sub-SaharanAfrica. UN-WOMEN website. Accessed 22 April 2011. Available on http://progress.unwomen.org/2011/06/laws-and-policies-on-gender-equality-and-womens-representation-in-parliaments-in-sub-saharan-africa/UNAIDS, 2010. Facts from the Global Report. UNAIDS Website. Accessed on 22 April, 2012. Available on www.unaids.org/documents/20101123_fs_ssa_em_en.pdfUNESCO, 2010. Education For All. Global Monitoring Report. Table 2.2, pg. 62.UNESCO, 2011. Financing education in Sub-Sahara Africa.United States Institute of Peace (USIP), 2010. Trends in Electoral Violence in Sub-Saharan Africa.WHO, 2010. Trends in Maternal Mortality: 1990 to 2008. Estimates developed by WHO, UNICEF, UNFPA and TheWorld Bank.Figure 2: Growth rates of African GDP, 2000–2013.World Bank, 2011. Africa Pulse, September 2011, Volume 4. Figure 2, pg 3. World Bank blogs. Accessed in April2012. Available on http://siteresources.worldbank.org/INTAFRICA/Resources/Africas-Pulse-brochure_Vol4.pdfFigure 3: Fastest-growing African economies in 2011World Bank, 2011. Africa Pulse, September 2011, Volume 4. Figure 3, pg 3. World Bank blogs Accessed in April2012. Available on http://siteresources.worldbank.org/INTAFRICA/Resources/Africas-Pulse-brochure_Vol4.pdfFigure 4: Africa’s small middle-classBrookings Institution, 2012. Data provided by the Brookings Institution.Figure 5: Inequality: Chances to survive birth and early childhoodMeasure DHS, n.d. Demographic and Health Surveys (DHS). Kenya (DHS 2008-09); Mali (DHS 2006); Nigeria (DHS2008); and Zambia (DHS 2007). Accessed in April 2012. Available on http://www.measuredhs.com/Figure 6: Income inequalityDevelopment Research Group of the World Bank, n.d. PovcalNet: the on-line tool for poverty measurement. Ac-cessed on 22 April, 2012. Available on http://iresearch.worldbank.orgFigure 7: Maternal and child health at the heart of MDG progressUnited Nations, 2011. The Millennium Development Goals Report 2011.Figure 8: Water: A critical challenge not only for the MDGsMaplecroft, 2012. Mean Annual Relative Water Stress Index.
  • 109Jobs, Justice and Equity: Seizing Opportunities in Times of Global ChangeFigure 9: UrbanizationUNDESA, 2010. The World Urbanisation Prospects, the 2009 Revision.Figure 10: DemographicsAfrican Development Bank, 2011. Africa in 50 Years’ Time - The Road Towards Inclusive Growth. Accessed on 22 April,2012. Table A.5, pg. 67. www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Africa in 50 Years Time.pdfUnited Nations, n.d. Population Division, Population Estimates and Projections Section. Accessed in April 2012.Available on http://esa.un.org/unpd/wpp/unpp/panel_population.htmFigure 11: Slum population in urban AfricaUNDESA, 2010. The World Urbanisation Prospects, the 2009 Revision.Figure 12: Food securityMaplecroft, 2012. Food Security Risk Index.Figure 13: Land grabs and property rightsMaplecroft, 2012. Respect for property rights index 2012.Figure 14: Africa and China’s growing partnershipMinistry of Commerce of the People’s Republic of China,2012. China-Africa Economic and Trade Cooperation.MOFCOM website accessed in April 2012. Available on http://english.mofcom.gov.cn/aarticle/subject/minister/lanmua/201102/20110207420927.htmlStandard Chartered Bank, 2012. Africa Focus, Up. Standard Chartered Bank.Standard Bank (2012). China has front row seats to Africa’s next growth phase. Asia Asset Management. Ac-cessed in April 2012. Available on http://www.asiaasset.com/news/standardbank_china_africa.aspx.Figure 15: ICTs for social and economic developmentBoafo, O. (1 December 2009) Esoko Ghana launches first agricultural commodity index. Accessed in April 2012.Available on http://www.modernghana.com/news/252085/1/-esoko-ghana-launches-first-agricultural-commod-ity.html.Harding, C. (13 October 2011) How Africa’s economy is benefitting from the ICT revolution. Accessed in January2012. Available on http://www.howwemadeitinafrica.com/how-africa%E2%80%99s-economy-is-benefitting-from-the-ict-revolution/12857/.Huduma. n.d. Welcome to Huduma. Accessed in April 2012. Available on http://huduma.info/.mHealth Alliance. n.d. mHealth Alliance and Rockefeller Foundation honor leading mobile health innovatorsof the year. Accessed in January 2012. Available on http://www.mhealthalliance.org/press_releases/mhealth-alliance-and-rockefeller-foundation-honor-leading-mobile-health-innovators-ye.NEPAD. n.d. Projects. NEPAD e-schools initiative. Accessed in April 2012. Available on http://www.eafricacommis-sion.org/projects/127/nepad-e-schools-initiative.Paul, S. (18 March 2012) How Ghana is using social media to promote voter registration. Accessed in March2012. Available on http://mashable.com/2012/03/27/ghana-voter-registration-social-media/.World Bank. (6 March 2012) eTransform Africa: Health Sector Study. Sector Assessment and Opportunities for ICT.Accessed in January 2012. Available on http://www.etransformafrica.org/sites/default/files/Complete-Report-Health.pdf.Figure 16: Civic activism, freedom and corruption.International Institute for Social Studies (ISS), n.d. Indices of Social Development. IISS website. Accessed in March2012. Available on http://www.indsocdev.org/civic-activism.html.Freedom House, 2012. Freedom in the World 2012. Freedom House website. Accessed in March 2012. Avilableon http://www.freedomhouse.org/report/freedom-world/freedom-world-2012 .Transparency International, 2011. Corruption Perceptions Index 2011. Transparency International website.Accessed in April 2011. Available on http://cpi.transparency.org/cpi2011/in_detail/.Figure 17: Social UprisingBBC. (28 September 2011) Bolivia highway protests spread, paralyzing La Paz. Accessed in April 2012. Availableon http://www.bbc.co.uk/news/world-latin-america-15101253.Drew, A. (1 July 2011) Growing discontent seen in annual Hong Kong protest. Accessed in April 2012. Availableon http://www.nytimes.com/2011/07/02/world/asia/02iht-hong02.html?pagewanted=all.Kershner, I. (3 september 2011) Summer of protest in Isreal peaks with 400,000 in city streets. Accessed in April2012. Available on http://www.nytimes.com/2011/09/04/world/middleeast/04israel.html?_r=1.Nossiter, A. (3 March 2011) Women said to be killed at Ivory Coast protest. Accessed in April 2012. Available onhttp://www.nytimes.com/2011/03/04/world/africa/04ivory-coast.html.
  • 110AFRICA PROGRESS REPORT 2012Reuters Africa. (30 January 2011) Police use tear gas to break up Gabon protest. Accessed in April 2012. Avail-able on http://af.reuters.com/article/topNews/idAFJOE70T00R20110130.Rogers, S. (14 November 2012) Occupy protests around the world: full list visualised. Accessed in April 2012. Avail-able on http://www.guardian.co.uk/news/datablog/2011/oct/17/occupy-protests-world-list-map.Wikipedia. n.d. 15 October 2011 global protests. Accessed in April 2012. Available on http://en.wikipedia.org/wiki/15_October_2011_global_protests.Wikipedia. n.d. 2011-2012 Spanish protests. Accessed in April 2012. Available on http://en.wikipedia.org/wiki/2011%E2%80%932012_Spanish_protests.Wikipedia. n.d. Arab Spring. Accessed in April 2012. Available on http://en.wikipedia.org/wiki/Arab_Spring.Wikipedia. n.d. Impact of the Arab Spring. Accessed in April 2012. Available on http://en.wikipedia.org/wiki/Im-pact_of_the_Arab_Spring.Wikipedia. n.d. List of occupy movement protest locations. Accessed in April 2012. Available on http://en.wikipedia.org/wiki/List_of_Occupy_movement_protest_locations.Wikipedia. n.d. Occupy movement. Accessed in April 2012. Available on http://en.wikipedia.org/wiki/Occupy_movement.Figure 18: Electoral MapInternational Foundation for Electoral Systems (IFES) n.d. Election Guide website. Accessed on 22 April, 2011.Available on http://www.electionguide.org/Electoral Institute for Sustainable Democracy in Africa (EISA). N.d. EISA website. Accessed on 22 April, 2011. Avail-able on http://www.eisa.org.za/Figure 19: Conflict and fragilityHeidelberg Institute for International Conflict Research (HIIK), 2011. Conflict Barometer 2011. HIIK website ac-cessed in April 2012. Available on http://www.hiik.de/en/konfliktbarometer/index.htmlWorld Bank, 2012. Fragile and Conflict-affected countries. Fragile Situations List (FY12). World Bank website ac-cessed in April 2011. Available on http://siteresources.worldbank.org/EXTLICUS/Resources/FCS_List_FY12_Exter-nal_List.pdfFigure 20: Natural ResourcesRaw Materials Group Database, 2012.World Bank, n.d. World Development Indicators 2009. World Bank website. Accessed in April 2011. Available onhttp://data.worldbank.orgFigure 21: The education inequality treeUNESCO, 2010. Education for All. Global Monitoring Report. Figure 3.3 pg. 144.Figure 22: Pastoralists face extreme education deprivationUNESCO, 2010. Education for All. Global Monitoring Report. Figure 3.3 pg. 144.Figure 23: Share of GDP from extractive resource rents and official developmentassistance, 2009World Bank, n.d. World Development Indicators, 2012. World bank website. Accessed in April 2012. Available onhttp://data.worldbank.org/data-catalog/world-development-indicatorsFigure 24: Managing funds for developmentAFDB/OECD, 2010. African Economic Outlook. Fig. 2. Aid and tax revenue in Africa per capita. Pg. 82.OECD, 2011. OECD Report on aid predictability: Survey on donors’ forward spending plans 2011 - 2013Figure 25: Official development assistance as a share of gross national incomeOECD/DAC, 2012.Figure 26: OECD export credits to Africa, 1966–2009OECD Development Centre (2011) Recalibrating Development Co-operation: How Can African Countries Ben-efit from Emerging Partners?Figure 27: Complementary financing from aid and loans to AfricaDahman Saidi, Myriam and Wolf, Christina (2011, March 14) OECD Development Centre, presentation at OxfordUniversity China/African Network Conference
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Save the Children (2012). A life free from hunger: Tackling child malnutrition.29. UNICEF (2011). Levels & Trends in Child Mortality Report 2011: Estimates developed by the UN Inter-agency group for child mortality. UNICEF30. WHO, UNAIDS and UNICEF (2011). Global HIV/AIDS Response: Epidemic update and health sector progress towards universal access. Accessed on 3 April, 2012. Available from http://www.unaids.org/en/media/unaids/contentassets/documents/unaidspublication/2011/20111130_UA_Report_en.pdf31. WHO (2011). Global Malaria Report. WHO32. WHO (2010). Trends in Maternal Mortality: 1990 to 2008. Estimates developed by WHO, UNICEF, UN-FPA and the World Bank. Accessed on 6 April, 2012. Available from http://whqlibdoc.who.int/publica-tions/2010/9789241500265_eng.pdf33. UNAIDS (2011). Unparalleled Global Progress in HIV Response but Sustained Investment Vital. Accessedin March 2012. 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Lions on the move: The progress and potential of African economies. McKinseyGlobal Institute. Accessed on 20 March 2012. Available from http://www.mckinsey.com/Insights/MGI/Research/Productivity_Competitiveness_and_Growth/Lions_on_the_move52. Anseeuw, W. et al. (2012). Land Rights and the Rush for Land: Findings of the Global Commercial Pressureson Land Research Project. ILC, Rome.
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The GSM Association provides an example of the estimated savings from the United Kingdom’s G-cloudinitiative. See also Verizon Business News (2011, November 10) Cloud Strategies, Economy Continue to Under-score Top Technology Trends for 2011, Trend 2, Everything as a Service: a ‘Cloudy’ New Mindset, Accessed on 20April, 2012. Available from http://www.verizonbusiness.com/about/news/pr-25643-en-Cloud+Strategies,+Economy+Continue+to+Underscore+Top+Technology+Trends+for+2011.xml72. World Bank (2010). Demanding Good Governance: Lessons from Social Accountability Initiatives in Africa.World Bank73. See examples at the African Community of Practice at http://www.cop-mfdr-africa.org/page/about-afcopand the International Budget Partnership at http://internationalbudget.org. Both accessed on 20 April, 201274. See 7275. Reporters without Borders. Press Freedom Index 2011-2012. Accessed on 20 April, 2012. Available fromhttp://en.rsf.org/press-freedom-index-2011-2012,1043.html76. USAID (2010). 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Sub-Sahara Africa needs more than one million teachers. UNESCO. Accessed on 6 April,2012. Availabe from http://www.unesco.org/new/en/dakar/about-this-office/singleview/news/sub_saharan_af-rica_needs_more_than_one_million_teachers/103. Southern and Eastern Africa Consortium for Monitoring Education Quality (2010). Project results: Pupilachievement levels in reading and mathematics104. Adams, Arvil V. (2008). Skills development in the Informal sector of Sub-Saharan Africa. World Bank105. Emmanuel, J. (2007). World Development Report: Development and the next generation. World Bank106. UNESCO (2000). Dakar Framework for Action. Education for all: meeting our collective commitments. Ac-cessed on 6 April, 2012. Available from http://unesdoc.unesco.org/images/0012/001211/121147e.pdf107. IMF (2011). Regional Economic Outlook. IMF108. Oxford Analytica (7 July, 2010) Relief for Congo109. World Bank. n.d. World Bank Indicators110. Collaborative Africa Budget Reform Initiative (2010). Good financial governance in Africa: The statusreport. Accessed in April 2012. Available from www.cabri-sbo.org/en/e-networking/blog/11.../145-gfgblog111. Brautigam, D., et al. (eds) (2008). Taxation and State-Building in Developing Countries: Capacity and Con-sen. Mick Moore Institute of Development Studies112. UNCTAD (2011). Global Investment Report. UNCTAD113. The IMF lists Angola, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Senegal, Tanzania, Uganda, Zambiaand Zimbabwe as African “Frontier Markets”, and the comparator “Frontier Markets” are Bangladesh, Bulgaria,Jordan, Kazakhstan, Pakistan, Romania, Sri Lanka, Tunisia and Vietnam.114. UNCTAD (2011). Global Investment Report. UNCTAD115. According to Ernst and Young’s Africa Attractiveness Report, 2011, intra-regional FDI increased by 21 percent annually from 2003 to 2010. Accessed in April 2012. Available from www.ey.com/...Africa_Attractiveness_Survey/.../11EDA187_attractiv116. Country Programmable Aid refers to those elements of Official Development Assistance that are pro-grammed at country level – thus omitting for example emergency and humanitarian aid, expenses incurred inthe donor country (for example student subsidies) and the cost of aid administration.117. For example, in April 2010, Shell announced its plan to withdraw from downstream oil and gas markets– considered “low-margin” – in 21 African countries. Similarly, BP announced plans to divest from five SouthernAfrican countries (UNCTAD (2011) Global Investment Report).118. See 110119. See114
  • 115Jobs, Justice and Equity: Seizing Opportunities in Times of Global Change120. Lin J. (2011). From flying geese to leading dragons: new opportunities and strategies for structural transformation in developing countries. World Bank Policy Research Working Paper No. 5702 . Accessed on 20April, 2012 . Available from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1871599#121. The World Bank/IFC Doing Business Report (2012) notes, for example, that ‘Getting an electricity connec-tion [….] costs more on average in Sub-Saharan Africa than in any other part of the world—more than 5,400% of income per capita (the average in OECD high-income economies is 93% of income per capita).’122. World Bank (2011) Light Manufacturing in Africa. The report addresses constraints to developing lightmanufacturing industries in Ethiopia, Tanzania and Zambia, and comes up with a similar list of areas to be addressed: input industries, trade logistics, access to finance, access to industrial land, worker skills, and entrepre-neurial skills.123. Country Programmable Aid refers to those elements of Official Development Assistance that are pro-grammed at country level – thus omitting for example emergency and humanitarian aid, expenses incurred inthe donor country (for example student subsidies) and the cost of aid administration.124. These figures are gross, unlike ODA figures, which are defined as net of loan repayments.125. International Aid Transparency Initiative. n.d. Accessed in April 2012. Available from http://www.aidtrans-parency.net126. For Sub-Saharan Africa, the absolute amounts are: for 2010, $32.9 billion; for 2013, $34.0 billion.127. Currently, the operational threshold for IDA eligibility is set at a GNI per capita of $1,165 in real 2009 dol-lars. See Moss, T. and Leo, B. (2011). IDA at 65: Heading Toward Retirement or a Fragile Lease on Life? Centre forGlobal Development.128. As an example, Bangladesh, where aid disbursements exceeded tax revenue in 1980/91, tax revenues arenow about six times their level (Flow of External Resources into Bangladesh, External Resources Division, Ministryof Finance, Table 14).129. Defined here as loans at zero or near-zero interest. This is a more restrictive definition than applied for Of-ficial Development Assistance provided by DAC members, but in practice there is at present very little DAC aidto Africa except on very soft terms.130. Brautigam, D. (2009). The Dragon’s gift: The Real Story of China in Africa, Oxford University Press. London131. It is rare for these providers to fund recurrent expenditure.132. Palmer, D. (February 2012) US, China agree to negotiate export credit deal. Accessed in April, 2012. Avail-able from http://www.reuters.com/article/2012/02/14/us-usa-china-exportcredits-idUSTRE81D1YV20120214133. African Consensus and Position on Development Effectiveness
  • Africa Progress PanelP.O. Box 1571211 Geneva 20Switzerlandinfo@africaprogresspanel.orgwww.africaprogresspanel.orgPANEL MEMBERSKofi AnnanChair of the Africa Progress Panel, formerSecretary-General of the United Nations andNobel LaureateMichel CamdessusFormer Managing Director of the InternationalMonetary FundPeter EigenFounder and Chair of the Advisory Council,Transparency International and Chairman ofthe Extractive Industries Transparency InitiativeBob GeldofMusician, businessman, founder and Chair ofBand Aid, Live Aid and Live8, co-founder ofDATA and ONE advisor and advocateGraça MachelPresident of the Foundation for CommunityDevelopment and founder of New Faces NewVoicesLinah Kelebogile MohohloGovernor, Bank of BotswanaOlusegun ObasanjoFormer President of NigeriaRobert RubinCo-Chairman of the Board, Council on ForeignRelations and former Secretary of the UnitedStates TreasuryTidjane ThiamChief Executive Officer, Prudential Plc.Muhammad YunusEconomist, founder of Grameen Bank andNobel LaureateThe Africa Progress Panel promotes Africas development by tracking progress,drawing attention to opportunities and catalyzing action.The Africa Progress Panelprints on recycled paper