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IS AFRICA GROWING OUT OF POVERTY?
Ewout Frankema
Wageningen University, Utrecht University
Public Lecture at Fundación Ramón Areces, Madrid, 22 January 2015
A decade ago...
The African ‘Lions’
Real GDP growth
Estimate Top 10 2000s Forecast Top 10 2013-15
Angola 11.1 Turkmenistan 11.3
China 10.5 DRC (Congo) 8.4
Myanmar 10.3 Paraguay 8.3
Nigeria 8.9 Ivory Coast 8.0
Ethiopia 8.4 Mozambique 7.8
Kazakhstan 8.2 China 7.5
Chad 7.9 Ethiopia 7.3
Mozambique 7.9 Tanzania 7.1
Cambodia 7.7 Ghana 7.0
Rwanda 7.6 Nigeria 6.8
Source: IMF 2012
Yet another short-lived commodity boom,
or
the first stage of a transition towards sustained
economic growth and poverty alleviation?
Sub-Saharan Africa, 1950-2013
Average annual GDP per capita growth
Source: Maddison 2010; IMF 2012
Real wages of unskilled workers, 1870-2010
Source: Frankema and van Waijenburg 2014
Poverty trends, 1981-2010
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010
Scenario’s of poverty trends to 2100
Five main socio-economic trends
of the past 20 years
(I) Improved macro-economic stability
Source: Africa Development Indicators 2014
(II) Export growth, 2000-2012
Source: UNCTAD 2014
Purchasing power of
exports in terms of
imports (%)
Terms of trade
(share)
Export volume
(share)
East Africa
108% 0.17 0.83
Central Africa
312% 0.36 0.64
West Africa
151% 0.61 0.39
Southern Africa
60% 0.70 0.30
North Africa
90% 0.84 0.16
Export-GDP relationship, 1995-2012
Source: UNCTAD 2014; African Development Indicators 2014
(III) Infrastructural investment
Construction of Highway Nairobi-Thika (Kenya)
Rwanda, rice (paddy), t/ha
Source: FAOSTAT
2014
(IV) Glimpses of an African ‘Green Revolution’
Benin, cassava, t/ha
(V) Declining intensity and changing nature
of violent conflict
Source: Centre for Systemic Peace, http://www.systemicpeace.org/CTfig04.htm
What drove the post-1995 growth recovery?
• “Lost Decades” of 1973-1995 (growth cycle)
• End of the Cold War
• Shifting global economic gravity (China, Brazil)
• Structural adjustment programs?
What’s new?
Exports per capita, 1850-2010
(in constant US$ 1980)
Per capita exports of ‘non-oil’ countries, 1850-2010
Chinese FDI offers in Africa, since 2010
A slow revolution...
Population Land area Denisty
(millions) (millions of km2
) people/km2
Africa total 50 29.5 1.7
Sub-Saharan Africa 40 18.5 2.2
Central & South America 35 19.2 1.8
North America 15 24.7 0.6
Eurasia total 350 53.0 6.6
India 110 3.0 36.7
China 100 9.3 10.8
Japan 15 0.4 37.5
Western Europe 57 3.5 16.3
Eastern Europe 14 1.1 12.7
Population density (pp/km2), ca. 1500
Population density (pp/km2), 1900-2100
Source: Frankema and Jerven 2014; UN Population Prospects 2012
Concentration of economic power
Drivers of urban growth
• Ca. 50% of post-2000 GDP growth in SSA caused by
domestic structural change (McMillan & Harttgen 2014)
• Consumer demand concentration (market size)
• Agglomeration effects in product and factor markets
• Concentration of investment capital (partly export
revenue driven) and human capital
• Higher potential for labour division and economic
specialization
The temporal ‘order’ of development
• Urban economic growth comes ahead of agricultural
intensification; well-functioning land market institutions
(e.g. registration); rural infrastructure
• Urban growth financed by extra-continental trade relations
and foreign investment (FDI) flows.
• Urban growth goes ahead of human capital investment
(educational quality in particular).
• Urban growth goes ahead of well-functioning financial &
fiscal institutions (credit markets, tax systems etc.).
• Urban growth goes ahead of historically grounded
institutions of ‘citizenship’.
Can urban growth induce institutional reforms and
agricultural intensification?
Conclusion
• Yet another commodity boom? No, there is much more
going on.
• However, the specific ‘order’ of development implies a
lack of useful historical analogies to understand current
African growth, and its sustainability in particular.
• Policy implications:
– Strengthen rural-urban market connections, also if this implies
‘de-liberalization’ and fiscal re-distribution.
– Governing institutional reform (land registration, fiscal capacity,
financial institutions and evolution of ‘citizenship’).

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Ewout Frankema - '¿Está saliendo África de la pobreza?'

  • 1. IS AFRICA GROWING OUT OF POVERTY? Ewout Frankema Wageningen University, Utrecht University Public Lecture at Fundación Ramón Areces, Madrid, 22 January 2015
  • 3. The African ‘Lions’ Real GDP growth Estimate Top 10 2000s Forecast Top 10 2013-15 Angola 11.1 Turkmenistan 11.3 China 10.5 DRC (Congo) 8.4 Myanmar 10.3 Paraguay 8.3 Nigeria 8.9 Ivory Coast 8.0 Ethiopia 8.4 Mozambique 7.8 Kazakhstan 8.2 China 7.5 Chad 7.9 Ethiopia 7.3 Mozambique 7.9 Tanzania 7.1 Cambodia 7.7 Ghana 7.0 Rwanda 7.6 Nigeria 6.8 Source: IMF 2012
  • 4. Yet another short-lived commodity boom, or the first stage of a transition towards sustained economic growth and poverty alleviation?
  • 5. Sub-Saharan Africa, 1950-2013 Average annual GDP per capita growth Source: Maddison 2010; IMF 2012
  • 6. Real wages of unskilled workers, 1870-2010 Source: Frankema and van Waijenburg 2014
  • 7. Poverty trends, 1981-2010 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010
  • 8. Scenario’s of poverty trends to 2100
  • 9. Five main socio-economic trends of the past 20 years
  • 10. (I) Improved macro-economic stability Source: Africa Development Indicators 2014
  • 11. (II) Export growth, 2000-2012 Source: UNCTAD 2014 Purchasing power of exports in terms of imports (%) Terms of trade (share) Export volume (share) East Africa 108% 0.17 0.83 Central Africa 312% 0.36 0.64 West Africa 151% 0.61 0.39 Southern Africa 60% 0.70 0.30 North Africa 90% 0.84 0.16
  • 12. Export-GDP relationship, 1995-2012 Source: UNCTAD 2014; African Development Indicators 2014
  • 13. (III) Infrastructural investment Construction of Highway Nairobi-Thika (Kenya)
  • 14. Rwanda, rice (paddy), t/ha Source: FAOSTAT 2014 (IV) Glimpses of an African ‘Green Revolution’ Benin, cassava, t/ha
  • 15. (V) Declining intensity and changing nature of violent conflict Source: Centre for Systemic Peace, http://www.systemicpeace.org/CTfig04.htm
  • 16. What drove the post-1995 growth recovery? • “Lost Decades” of 1973-1995 (growth cycle) • End of the Cold War • Shifting global economic gravity (China, Brazil) • Structural adjustment programs?
  • 18. Exports per capita, 1850-2010 (in constant US$ 1980)
  • 19. Per capita exports of ‘non-oil’ countries, 1850-2010
  • 20. Chinese FDI offers in Africa, since 2010
  • 21.
  • 23. Population Land area Denisty (millions) (millions of km2 ) people/km2 Africa total 50 29.5 1.7 Sub-Saharan Africa 40 18.5 2.2 Central & South America 35 19.2 1.8 North America 15 24.7 0.6 Eurasia total 350 53.0 6.6 India 110 3.0 36.7 China 100 9.3 10.8 Japan 15 0.4 37.5 Western Europe 57 3.5 16.3 Eastern Europe 14 1.1 12.7 Population density (pp/km2), ca. 1500
  • 24. Population density (pp/km2), 1900-2100 Source: Frankema and Jerven 2014; UN Population Prospects 2012
  • 26. Drivers of urban growth • Ca. 50% of post-2000 GDP growth in SSA caused by domestic structural change (McMillan & Harttgen 2014) • Consumer demand concentration (market size) • Agglomeration effects in product and factor markets • Concentration of investment capital (partly export revenue driven) and human capital • Higher potential for labour division and economic specialization
  • 27. The temporal ‘order’ of development
  • 28. • Urban economic growth comes ahead of agricultural intensification; well-functioning land market institutions (e.g. registration); rural infrastructure • Urban growth financed by extra-continental trade relations and foreign investment (FDI) flows. • Urban growth goes ahead of human capital investment (educational quality in particular). • Urban growth goes ahead of well-functioning financial & fiscal institutions (credit markets, tax systems etc.). • Urban growth goes ahead of historically grounded institutions of ‘citizenship’.
  • 29. Can urban growth induce institutional reforms and agricultural intensification?
  • 30. Conclusion • Yet another commodity boom? No, there is much more going on. • However, the specific ‘order’ of development implies a lack of useful historical analogies to understand current African growth, and its sustainability in particular. • Policy implications: – Strengthen rural-urban market connections, also if this implies ‘de-liberalization’ and fiscal re-distribution. – Governing institutional reform (land registration, fiscal capacity, financial institutions and evolution of ‘citizenship’).