7 - Coming last? Low productivity in Africa

Summary

Africa, the world's poorest continent, is where productivity remains the lowest. Once largely ignored by the rest of the world, today its problems attract attention from many mainstream economists. A billion people – one-seventh of the world's population – live there. Some are incredibly rich. Some are called middle class, but being “middle class” in Africa is very different from in the advanced world: your income may well be less than the minimum wage in the UK, but enough to have an inside toilet and a generator for when the official electricity fails, as it does on a regular basis (Hammond 2014). Most are poor, although the level of poverty overall has declined (by how much is disputed). Yet Africa is where the first human societies were created. Poverty in Africa, Jared Diamond once wrote, is “the opposite of what one would expect from the runner first off the block” (Diamond 2005).

Our interest here is sub-Saharan Africa. Table 7.1. shows the comparative data for sub-Saharan African productivity levels measured as a percentage of the US level. Looking at individual economies, we see some of the lowest levels of productivity in the world. Productivity is advancing, but more slowly than in most of the rest of the world. Table 7.2 shows the result: in relative terms Africa has fallen further behind.

Views of progress in Africa have swung between “Afro-optimism” and “Afro-pessimism”. In the 1960s, optimism was in the ascendant. Then, from 1970 to around 2000, pessimism became dominant. In 2000, The Economist magazine declared that Africa was “the hopeless continent”. Many in Africa were offended, but some who lived there were just as brutal: “Wherever we look”, wrote one Nigerian civil rights activist in 1999, “Africa spells failure on all fronts: political, economic, and moral” (Kukah 1999). Growth picked up in the 2000s. This led to talk of “Africa rising” and “African lions” (there are no tigers in Africa), but the surge seemed to falter. The pessimistic view is still widespread among economists who focus on the “African growth tragedy” and its “chronic growth failure”. This failure has become a stylized fact of economic history.