The Equation for Africa’s Frontier Integration

Photo Dj.aspby: Djoudie Etoundi Essomba ’12

The economic emergence of Africa has been so sudden that many observers still can’t wrap their heads around it. But you know something big is going on when the Boston Consulting Group and McKinsey publish almost simultaneously studies tracking the continent’s growth; or when Wal-Mart and the Carlyle Group announce expansion plans in the near future. In Africa, in contradistinction to rising Asia or the BRICS, the environment and the relationship of the actors to one another is not yet set. So an appropriate approach to analyze what this phenomenon means for Africa should focus on the unknown, and to try to define a working equation from there.

(I am shamelessly borrowing my methodology from French strategist Alexandre Adler and philosopher Michel Serres; if you are going to borrow, take from the best…)

Let’s begin with what we do know, the constants:

Africa’s growth will be paid for by Asia through a double lane investment stream: A rule of Globalization 101 is that it breaks up production chains on the national level and reintegrates them on the international level, a process described by Dr Thomas PM Barnett as Frontier Integration (in reference to the old West in the United States). In Africa, Frontier Integration was accelerated by Chinese companies’ natural resources-for-infrastructure deals which accelerated local growth (to reach double digits in 3 to 5 years time in countries like Ghana, Mozambique, and Angola). Meanwhile, base of the pyramid products developed for Asiaare are being replicated on the continent to service both its rural poor and now rising middle class, with Indian companies like Bharti Airtel leading the way.

Africa’s Frontier Integration won’t be as export-centric as Asia’s has been. Although accelerated by 10 to 15 years due to the ‘Chindia’ element, local growth actually increased in the 90s (at the same time that the international media christened Africa the “Hopeless Continent”). A 2010 study paper by Maxim Pinkovskiy and Xavier Sala‐i‐Martin (professors at MIT and Columbia University, respectively) clearly makes this point. More impressively, thanks to growth rates set to reach double digits in many countries, Africans appetites for consumption will be one of its primary drivers.
Africa is quietly poised to take center stage in globalization over the next 20 years in the same way Asia did during the last 30. Given the weakened state of the traditional engines of global growth in the Old Core (US, EU, Developed West) following the financial and debt crises, the sorting out of which will require a decade, and as the potential replacement engines in the New Core (‘Chindia’, BRIC, rising Asia) haven’t matured yet, Africa’s frontier integration is set to be the only game in town for investors looking for high rates of growth.

african mapWhat variables could impede this potential? After the constants, the variables:

What about the markets?
Many African countries lack the basic economic scale, with populations too small to sustain individualized growth, while others are landlocked such as Uganda, Gabon, Ethiopia or Namibia. So for those countries that will not benefit from the continent’s demographic transition (estimated to be an aggregate 2 Billion by 2050), what regional integration should be pursued to reach the proper scale?

What about the currency?
An especially acute concern for former French colonies who still live with the ghost currency of the Franc, and whose development is increasingly impaired by it. After all, utilization of such made sense when 90% of exports went to France or the EU, but not when China and India are set to become the predominant trade and financial partners. Will there be a proliferation of near-junk currencies in each country, or the birth of one or several African versions of the Euro, minus the debt?

What about security?
Frontier integration is a process which causes violence because the preexisting power structure and corresponding relationships must be broken down and renegotiated to suit the active economic restructuring . So what security architecture will emerge: Afro-Nato(s) or the dominance of new Asian overlords, eg: the USA, India, China, and others to replace France and the EU; or even a new ChinAfrica to replace Franco-Africa?

What about freedom?
Most countries going through their economic rise do so as one-party states, most of the time autocratic ones (China, South Korea, Taïwan, Singapore, Spain, etc…). Much more rare are the democratic ones (India, Japan, Italy, Sweden). Will Africa follow one of those two paths or will it become characterized as the first mass economic advancement to happen in the context of increasing democracy in the body politic?

What about culture?
This facet is especially pivotal for me (In the end I think it’s all about the culture, the rest is just foreplay): Will Africa’s economic emergence lead to renewed investment in its own vast, rich heritage and traditions, or will it just substitute one Western centrism (the West) for an Asian one (ChinAfrica, IndiAfrica)? This could prove tricky, as globalization often increases nationalism due to economic development being perceived as a vindicator of local values and virtues.

african developmentAnd now for the actual equations, the relationships of all of the above to each other, which brings us into the domain of actual strategy: eg, choices. As mentioned before they are too fluid and complex to report in an accessible way. Nevertheless, by using intuition and past experience, it is possible to at least identify the broad outlines.

First the “China factor”: if African nations do not define a coherent strategy for themselves, connectivity with China’s current regime would turn Africa into a lower-end of the production chain, a billion man alternative of North Korea (The situation in Sudan and Zimbabwe are potential models for this outcome, although the fates of Ghaddafi and Mubarak must be giving their leaders second thoughts about liberalization). Ordinary people’s perceptions of China would go from that of partner to oppressor. Or, in a similar wrinkle, frontier integration could be hijacked by existing superpowers, as China , the US, or the BRICs, would carve up the continent in spheres of client states, a soft repeat of the 1885 Vienna conference where European powers agreed to break up the existing African states to draw new borders that fitted their own interests.

Another factor that is already being felt all over the continent is the influence of radical Islam or “the rise of the Caliphates”, causing increased Christian/Muslim and Native/Arab strife in all the countries of the Sahel (Arab Tuaregs coordinated across frontiers by Al Qaeda agents in Mali, Niger, Mauritania and Sudan whose Al Qaeda and Iran friendly regime is killing both Black Christians in the South and Black Muslims in Darfur).Concurrently, the economic influence of Iran and Saudi Arabia on the continent is rising. They have genuine economic motivations of course as; everyone wants a piece of the frontier integration action but Islamic fascists in both countries could spell lasting instability. A nightmarish scenario for African growth and freedom would be a definitive alliance between an arch-Nationalist China and radicalized Muslim states.

Aside from the rivalries among actual or presumptive superpowers, the other main factor in Africa’s economic emergence are pivotal African countries themselves. Nigeria’s sheer size anchors West Africa; South Africa’s developed yet unequal economy in tandem with the oil and mineral resources of Angola constitute the Southern core of the continent; a Kenya-Ethiopia duo for the Horn if and when both get their act together; a yet to be defined political-economic community in Central Africa around former French colonies (and Cameroon specifically); and Congo-Kinshasa fated to be the pivot of stability for all these poles if it ever stabilizes. A special note should be made of Rwanda’s steady ambition and ingenuity in becoming the African Singapore, a feat marveled at and copied by others in the Great Lakes region and beyond.

african treeBut the most important factor of all, and the main source of hope for the continent, is the African peoples themselves. Indeed, Africa’s long cycle of civil wars, dictatorships, violent political rivalries and ethnic strife, has resulted paradoxically in vibrant civil societies eager to embrace the new opportunities for prosperity. That vitality is shining through as farmers sow crops to target new markets in Asia, as entrepreneurs embrace mobile phones as platforms for creating goods, services and value for their peoples, and as NGOs and journalists use technology to tackle social problems and hold their governments accountable. These individual farmers, entrepreneurs, journalists, tribal and community leaders are the ones driving Africa’s Frontier Integration. Deciphering the peculiar algebra of these people’s choices will mean solving the equation of Africa’s future.

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