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Africa's Future

July 12, 2011

Business and development are two competing concerns as German Chancellor Angela Merkel visits Africa. The continent's problems are legion, but there are also good reasons for hope.

Press conference with Merkel and the President of Angola
Western leaders are taking increased interest in countries like AngolaImage: DW / Cascais

Ahead of Merkel's four-day tour of Kenya, Nigeria and Angola, Christian Ruck, a development expert from the Christian Social Union, which forms part of the chancellor's conservative-liberal government, posed an interesting question: why has Africa lagged so far behind, for instance, Southeast Asia, in the past half century?

It's not as if Africa doesn't enjoy economic growth. Angola, Nigeria, Ethopia, Chad, Mozambique and Rwanda are all among the fastest-expanding economies in the world, with annual growth rates of eight percent and higher.

The annual average of real GDP growth over the past decade is 5.7 percent, and that's expected to jump to almost seven in coming decades.

Africa's growth spurt has been fueled by demand, especially from China, for abundant African natural resources. They include large deposits of petroleum, precious metals and minerals as well as agricultural resources.

Africa's annual trade with China now exceeds 100 billion euros ($139 billion). That statistic and other factors led The Economist magazine to conclude early this year: "[Africa's] lion economies are earning a place alongside Asia's Tigers."

But development has limped along far behind growth. So what could and should Western countries be doing to help ensure that increased economic prosperity actually betters people's lives on the world's poorest continent?

From curse to blessing

People digging for diamonds in Zimbabwe
Diamonds are only one of Africa's natural resourcesImage: AP

China, in particular, has come under heavy international criticism for signing deals with corrupt African leaders that allow them to exploit local populaces and destroy the environment. It has become common to speak of ordinary people in Africa as suffering from "the curse of natural resources."

Many aid and development activists have called for the formation of natural resource "competence centers" to prevent agreements that have poor long-term returns, fail to generate local jobs or bring in new technologies. The UN Office of the Special Advisor on Africa (OSAA) has also stressed that deals should be "win-win," instead of "win-lose" scenarios.

"That would be a way of ensuring that the natural resources curse becomes a natural resources blessing for the people of Africa," Peter Eigen, the founder of the watchdog group Transparency International, said on the eve of Merkel's trip.

Other problems are, of course, corruption and poor governance, and assessments of the three countries Merkel is visiting, some of the more prosperous in Africa, paint a dismal picture.

Angola ranked near the bottom of Sub-Saharan countries in the 2008 Ibrahim Index of African Governance. A US State Department survey from the same year judged Nigeria's human-rights record to be "poor." And in the 2011 Transparency International Corruption Perception Report, Kenya came in a woeful 154th out of 178 countries around the globe.

Transparency International and other watchdog groups are calling upon companies to reveal what they pay for contracts in Africa. At present most such deals are kept secret, making it impossible to monitor whether a reasonable percent of revenues is trickling down to help ordinary people.

So is Merkel talking to African leaders about these problems? Most definitely, but only after she has finished with more pressing business.

African strategies

Oil spill in Nigeria
Exploitation of African oil has led to enviromental catastrophesImage: AP

The Chancellor is being accompanied on her trip by a business delegation, a signal of what the priority of Merkel's trip is. Representatives of German industry are worried that China is locking up too many exclusive business deals in Africa, to Germany's detriment.

"German industry is hoping the Chancellor will get personally engaged in ensuring continued free access to African natural resources," Martin Wansleben of the German Chamber of Industry and Trade DIHK told the Passauer Neue Presse newspaper, as Merkel's visit commenced.

It would be utopian, of course, to expect foreign governments to put aside economic interests in their policies toward Africa. So coming to grips with this fact is something African governments need to do, if they want to break through the trap of being little more than an exporter of cheap raw materials.

In a 2010 report by the OSSA, entitled "Africa's Cooperation with New and Emerging Development Partners: Options for Africa's Development," the authors concluded: "Whilst some emerging economies have a strategy for Africa, Africa does not have a strategy toward the emerging economies."

Christian Ruck, too, thinks Africa will have to take the lion's share of the responsibility.

"Solutions work above all where they come from Africa itself and where they reflect African politics," the CDU-CSU development expert said ahead of Merkel's trip.

If win-lose deals get done, it can be safely assumed that neither the West, including Germany, nor emerging powers like China will come out on the short end. So the best Africa can hope, the experts agree, is that all business arrangements are crafted so that everyone profits over time.

Author: Marcel Fürstenau, Jefferson Chase
Editor: Rob Mudge