Optimism over Africa

Paul Collier and other old Africa hands gathered in Davos on Wednesday to talk about "Africa’s governance dividend". The past few years have seen Africa’s strongest growth in living memory, and the mood was cautiously optimistic – risks of a global demand crunch and the ongoing AIDS crisis notwithstanding.

Why is Africa starting to grow now? Certainly the strong global economy has helped contribute to Africa’s success, but that’s hardly a sufficient cause for what has been seen from Nigeria to Mozambique. And no one really believed that foreign aid has helped much, or African democracy. Rather, the explanation was much more down-to-earth: trial and error.

Africans have graduated from the best school in the world: the discipline of experience and failure. People have learned what not to do. Not all policies are brilliant, but Africa is avoiding the truly bad ones, such as inflation and corruption. Because this learning process has been gradual, it has also been robust.

For the foreseeable future Africa is likely to have at least a few countries wracked by inflation or war, and the chances of corruption being eradicated soon are nil. But the key point is that the Africans know what their problems are, and they are getting much better at finding their own solutions.

Relatedly, the WEF released on Thursday a report about business coalitions tackling HIV/AIDS in Africa. Now that Africa is growing again, companies increasingly want to do business there – and that means dealing with the AIDS crisis head-on. The biggest multinationals, like Heineken and Unilever, provide ARV treatments to their employees for free, and open up their supply lines for the delivery of drugs as well as beer and soap. But businesses of any size can help with destigmatizing the disease in the workplace, and educating their employees and customers. This report is useful because it’s the first time that a list of all these business coalitions has been collated. It’s not a magic bullet, but Africa has learned that those never work anyway.

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