Michael Meyer: Rethinking East Africa’s prosperity gap

In recent years, the narrative of a “rising Africa” has been embraced by some and debunked by others. But all agree on what social engineers call “inclusiveness” – the degree to which members of a society share in its prosperity.

With it, say the boosters, Africa will rise. Without it, say the skeptics, it cannot.

Africa’s future really is as simple as that. Without a sense of social contract – a faith in shared progress – economies tend to become unstable and fall apart. “No society that hopes to prosper,” writes the economist Jeffrey Sachs in his book The Price of Civilization, “can afford to leave large parts of its population stuck in the poverty trap.”

Against this background, a new report by the Society for International Development (SID) in Nairobi is a sobering read. Its conclusion: a rising Africa – and in particular a rising East Africa – will never become a reality without economic progress across all sectors of society.

Superficially, East Africa appears to be doing well. Annual economic growth rates are averaging around 6%, and trade and foreign investment are rising. Some countries, such as Uganda and Tanzania, have large energy-resource endowments. In Kenya, the region’s largest economy, finance and new consumer service industries are propelling growth – an important economic evolution. Look deeper, however, and it is difficult not to worry. Across the region, the richest are the overwhelming beneficiaries of economic growth, while the poorest are falling further behind.

Numbers tell part of the story. The richest 10% of East Africans have an average annual income of $2,100. They tend to live in cities, work in industry or professional services, and send their children to private schools. Their East Africa, according to the report, resembles Central America or a lower-middle-income European country.

By contrast, the bottom 40% of East Africans make do on $225 a year – significantly below the threshold of $1.25 a day that development experts use to define extreme poverty. These poorest of the poor are mostly the rural. They live without basic utilities such as power, clean water, and sanitation. Their children have a 40-80% higher chance of dying before their fifth birthday.

Some problems cut across the extreme-poverty divide. Childhood stunting is on the rise everywhere, affecting 42% of the region’s 24 million under-five children. All East African countries have achieved 100% primary-school enrollment, but only 28% of primary-school students in Uganda, and 49% in Kenya, go on to secondary education.

In Rwanda and Uganda, 88% of secondary-school students pass their national exams; in Tanzania and Kenya, that proportion is less than 30%.

Unsurprisingly, the 2012 Afrobarometer survey indicates a sharp erosion of public confidence. In Tanzania, 40% of those polled described current economic conditions as “very bad.” Two-thirds of Ugandans felt similarly, up sharply from 42% in 2010. In Kenya, 84% of adults described the economy as either “very bad” or “fairly bad” – a 30-point jump from 2005.

What are governments to do in the face of such realities? For starters, East Africa’s political leaders must put aside their penchant for what the authors of the SID report call “social bribery” – delivering the promise of progress without the results.

Consider agriculture, which accounts for most of the region’s real economy and employs the vast majority of East Africans. Yet the sector is stagnating, with growth rates that are less than half of those attained in the rest of the economy. And, while the average age of an East African is 15-19, the mean age of a farmer is roughly 60. That is not a prescription for a bright future.

In many ways, the foundations for building more inclusive societies – societies that are ultimately richer and politically stable – must be laid in the countryside. Policies that extend social services and create new economic and entrepreneurial incentives for rural communities are key. So is infrastructure development, both in the provinces and in terms of linking the region more generally.

In many ways, China is a model. “To become rich is glorious,” said Deng Xiaoping as he set about dismantling the country’s dysfunctional command economy in the early 1980’s. But he made sure that the rising tide of China’s growth, at least during his leadership, lifted all boats. In East Africa, too many boats remain stuck in the sand.

Michael Meyer is Dean of the Graduate School of Media and Communications at Aga Khan University in Nairobi.

Project Syndicate, 2014.

Source: Mareeg.com