The ‘Africa Rising’ narrative means different things to different people. Yes, Africa has performed better in the last decade. But views diverge on the drivers of growth and on its sustainability, and on whether this growth will translate into structural transformation. For instance, the recent fall in oil prices has laid bare the vulnerability of some African economies, suggesting lack of diversification. At the very least, growth has been uneven among regions and countries. The ‘Afro-euphoria’ of recent years is as removed from reality as its equally over-wrought predecessor, blanket ‘Afro-pessimism’.
To get a truer picture, one has to look at specific sectors and policies in a single country. This is what I have done, with the eyes and ears of a policy-maker who has taken time out to undertake detailed research. Ethiopia is widely regarded as one of the poster children of Africa’s renaissance and economic transformation. With more than 90 million people, it is the second most populous country in Africa. Its economy has been growing at about 11 per cent over each of the past 12 years, primarily driven by agriculture, and without any resource boom such as oil or minerals. GDP per capita has increased four-fold, the number of people living below the poverty line has halved, and life expectancy has increased by 19 years to 64. The country has achieved this after facing down many of the woes that have beset the continent ‒ and fuelled Afro-pessimism ‒ for decades: totalitarian military rule, famine, civil war. On top of all this, it is landlocked. Yet it remains a beacon of change in an unstable ‘bad neighbourhood’.
What has changed to make this possible? Is this growth trajectory a blip or will it really lead to catch-up? Perhaps it is too early to say. But clues lie in the government’s single-minded focus on developing and transforming agriculture as a foundation for economic take-off. This has enabled Ethiopia to now shift focus to manufacturing with a view to becoming the leading manufacturing powerhouse in Africa by 2025 through a carbon neutral strategy. The manufacturing sector will have to grow by 25 per cent annually if the overall vision is to be achieved, and manufacturing exports will have to expand dramatically.
To encourage manufacturing to expand and play its distinctive role in economic development, the government has put enormous emphasis on publicly funded infrastructure. Currently, Ethiopia spends more than 55 per cent of its federal budget on infrastructure and skills development. This includes building Africa’s largest hydro-power project, funded entirely through domestically mobilized resources; an electric railway system, the first of its kind in Africa; and the ongoing transformation of universities and technical vocational systems so as to support the productive sectors.
The Ethiopian experience shows that learning by doing is just as important in policymaking as in production. Ethiopia has been making bold experiments, based on looking at what works and what does not. With each experiment and experience, policymaking capacity gradually improves. There is no short-cut alternative to learning-by-doing. The key question for many countries is whether they can experiment in the absence of policy independence? Ethiopia has exploited its available policy space, and has consistently followed its own development path. In many ways, its development path has been unique in Africa, diverging from the normal prescriptions of international financial institutions. However, blueprints and naïve ‘lessons from’ approaches are unlikely to work. Ultimately, what determines a country’s catch-up is not geography, ethnic homogeneity, and culture, or ‘good governance’ indices. It is a compulsion to change, and persistence in implementing a strategy while at the same time adapting in the face of mistakes and a shifting context.
Headline image credit: ‘Ethiopia, Eastern Omo-river’, by Rita Willaert. CC BY-NC 2.0 via Flickr.