Africa’s development models must change

Given the informality of their economies and the vulnerability to organized crime, governments should not lead the development of the continent.

As the world struggles with COVID-19, analysts have had to revise their predictions about development in Africa. There is now a lot of discussion about V-shaped, U-shaped or L-shaped recovery patterns and what this could mean for an overall positive outlook for the continent – an ‘Africa Rising’ story.

However, conditions over the past decade or more suggest that the starting point for these models of development and recovery could have been tougher than is generally acknowledged, with a lower threshold of stability.

The socio-economic development models used by the major multilateral financial institutions such as the World Bank, the International Monetary Fund and development agencies need to be reviewed. This should be consistent with the fact that most African economies are outside the current legal framework and the law, and are subject to informality, poor land management and harmful networks for organized crime.

Most African economies face informality, poor land management and harmful organized crime

Future instability and uncertainty in Africa are likely to have the combined effects of five dominant trends: climate change, rapid urbanization, increasing infrastructure shortages, vulnerability to epidemics and pandemics, and lawlessness (which provides fertile ground for extremism).

Over the past forty years, interventions to promote African development by multilateral banks, development institutions and other donors have been based on specific socio-economic models. These approaches drive the movement of people and capital from low-productivity agriculture to industrial productivity and higher-productivity services.

The aim was to accelerate an industrial, manufacturing sector in and around urban centers that had access to a pool of surplus labor. These structural changes did not occur as predicted.

Massive urbanization has taken place, but as the United Nations Economic Commission for Africa pointed out in 2017 ‘amid declining or stagnant industrial production and low agricultural productivity’. While Africa’s economy has tripled since 2000, the sectoral composition of gross domestic product (GDP) has not changed significantly. GDP growth is not accompanied by comparable job growth.

In all African countries except a few countries, the formal economy accounts for only 20% of total employment

Between 2000 and 2014, the increase in employment was below GDP growth and barely before the population explosion on the continent. In all African countries except a few countries, the formal economy is only 20% of the total work. In sub-Saharan Africa, informal work accounts for about 94.9% of all youth work.

The International Labor Organization estimates that 92.4% of ‘all economic units in Africa are informal’. Unlike Western socio-economic development models, informality is growing ‘faster in most African countries than large-scale modern manufacturing’ and is the socio-economic reality of Africa.

Lawlessness also hinders the stability of Africa. Since 2008, the Ibrahim Index of African Governance has been reporting a continuing weakening of the composite scores for security and rule of law. The index claims that lawlessness has been normalized by rising crime rates, unbridled corruption and a citizenship that both refuses to pay for public services and does not pay taxes.

Poor land management links lawlessness: 90% of rural Africa is not cadastre or has no title; 90% of all landowners / owners are unregistered; 62-75% of all urban housing is informal; and almost all land management takes place outside of legal planning processes.

Governments should not automatically be considered the standard partner of development agencies

A 2019 study on organized crime in Africa found that ’embedded state actors’ are the ‘most prominent’ and virulent type of organized criminal. The research claims that institutional reforms based on capacity building for government institutions will have no impact on organized crime in 75% of Africa’s countries – a finding reflected in the 2017 World Development Report.

Due to the wide informality of systems and processes, the structure and operation of Africa’s private sector and its legal markets have also fallen prey to lawlessness and organized crime.

All of these factors are accelerating the effects of climate change, urbanization, a lack of infrastructure construction and maintenance, and vulnerability to epidemics and pandemics. Climate change is already causing profound changes in rainfall, higher temperatures and rising sea levels. Agriculture, food security and health will be adversely affected. Along with population growth, these changes will exacerbate socio-economic vulnerabilities.

Explosive African urbanization also challenges continental stability. Analysts estimate that urban land in Africa will increase by almost 600% by 2030, and that 50-53% of all Africans are expected to live in urban centers by 2040.

The annual shortfall in continental infrastructure expenditure is about 100% of actual expenditure. The World Bank points out that infrastructure needs are US $ 130-US $ 170 billion a year, while spending is only US $ 75 billion, with about 30% of all infrastructure needing maintenance. The African Development Bank says this is an accurate expression of the political commitments of the ruling elite.

COVID-19 is not the first epidemic or pandemic to spread in Africa recently. Ebola, dengue fever, cholera and malaria are endemic in large parts of the continent. More than 75% of all African countries reported an outbreak of a contagious disease in 2018.

Although progress has been made in the provision of health care, the World Bank indicates that ‘the majority of African countries are [still] unable to meet the basic requirements for good healthcare systems. The World Bank claims that this situation can best be understood in the context of Africa’s total lack of infrastructure.

These trends and their consequences are examined in a new report by the Institute for Security Studies which motivates why new approaches must explicitly acknowledge the African reality, the existing capabilities and the inherently compromised African state.

Governments should no longer be automatically considered the standard partner of development agencies. The state should be seen as one actor under much rather than the main foundation on which development is based. Governments should be encouraged to standardize, coordinate, support and fund initiatives that enable community control of local resources.

In revisiting the dynamic relationship between the state and local communities, the resilience of community actors – defined by their management of local resources – must become the primary outcome used to design and measure development.

The real question for policymakers and development practitioners should be how to support small-scale, decentralized initiatives (such as off-grid local power networks) and encourage those that meet local needs.

Eric Scheye, Consultant on Justice, Organized Crime, Violence Against Women and Government and Eric Pelser, Head of ENACT Organized Crime Program, ISS Pretoria

Read the full ISS report: Why Africa’s development models need to change: understanding five dynamic trends. Watch a live recording of a seminar on the topic here.

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