Alexonomic's Outlook for 2013: Africa

Well, the world did not end on December 21^st .

However, the Mayan’s may have been on to something.

The year 2013 promises to be both interesting and potentially difficult both economically and politically, as the world prepares for another rotation around the sun. This blog will explore technology, economics, politics, science and other issues of each division of the world from a more broad perspective, and predict certain events while also proposing solutions. It will be broken down into Africa, Europe, South America, Australia and Oceania, Asia, the Middle East and finally North America. Lastly, a conclusion will be provided, while each continent will be ranked in a quadrant from the risk/reward quadrants. 

Africa will be the subject of this posting.

Egypt has often been the focus of news in Africa as of late. The removal of Mubarak and election of Mohammed Morsi has proven to be an interesting turn of events, but the excitement is far from over. Morsi symbolically removed ties from the Muslim Brotherhood, but that move hardly removes the influence the party has on the President. The credo of the Muslim Brotherhood is particularly concerning for a political organization, stating [translation] “Allah is our objective;the Quran is our law, the Prophet is our leader, Jihad is our way, and death for the sake of Allah is the highest of our aspirations." Sharai’ah law is also promoted by this group. Many have defended the group’s strictly democratic intentions, but this has not prevented the group from displaying some rather disturbing and violent demonstrations. The Brotherhood launched the Freedom and Justice Party in Egypt, which won 60% of the seats in the 2011 elections, with Morsi winning the Presidency. The party has strayed from strict conservative Islamic ideas such as allowing Coptic Christians and woman as candidates for cabinet positions – which is comforting. Adding to the fact is the party is being watched by the world and their own people to prevent Egypt from slipping into a radical Islamic state. The burning of Muslim Brotherhood offices in response to Morsi’s power grab shows that the people will keep the political organization in check.

However, Islamic extremism has been worrisome in the country. The attack of Coptic Christian churches and public rape of Coptic girls or girls who refuse to adhere to certain renditions of Islamic theology is quite concerning. Egypt will be wrestling with Islam in 2013, with the entire world watching as it has influence over the Palestine/Israeli situation. The former Israeli ally could potentially have a different foreign policy, potentially not so friendly to Israel.

In addition to Egypt, Tunisia and Libya have seen larger protests with Western Saraha and Mauritania also seeing similar Arabic Spring protests in 2011 – with lesser mainstream news coverage. Mauritania has seen the return of President Mohamed Aziz, who survived an assassination attempt. Tunisia has seen the implementation of the Ennahda Movement, an Islamist party that has been accused of double speak. Currently, it rejects radical Islam and openly supports secularization of state and economic freedom. However, it was slow to condemn anti-Semitic rants and only has two women in regional leadership positions. Additionally, while Somalia has seen some progress in fighting Islamic extremism, Mali has been thrust into a battle with Tuareg rebels attacking and destroying artifacts deemed un-Islamic (such as destroying mausoleums in Timbuktu). Threats of Western intervention are keeping the Islamists from total control.

I don't think they are happy. 

Basically, 2013 will see the continuance of the Arabic Spring as 2012 did, with Islam playing a large role. The evolution of the Islamic faith could be compared to the Renaissance experienced by the Christian faith centuries ago. Right now, Islamic leaders must decide whether to abandon ancient beliefs such as discrimination of women’s rights, and embrace religious freedom and a division between the state and religion. Continual monitoring in Africa of this renaissance will be the key to determining many African state’s policies in the upcoming year – both economic and political. The battle against African Islamic extremism will be quite fierce in 2013. 

Although the extremist Islam threat is worrisome, there are plenty of other problems in Africa. Namely: corruption and opportunists. Opportunists such as China are busy instituting the second colonial invasion of Africa through their constant pursuit of more resources to fuel their industrial growth, or selling of counterfeit medicine. It is estimated that a third of malaria drugs are fake in Uganda and Tanzania, and originate from China and India, while the market for counterfeit drugs in Africa is around $100 billion.  Corruption is also a major issue, as the little government regulation that exists can often be side stepped by throwing a bit of cash at the correct person.  Exemplifying this is the fact that the mother of Nigeria’s finance minister was kidnapped and released five days later. The finance minister was a heavy campaigner against corruption, and her mother’s kidnapping proves she has quite the battle to wage.  

These two issues in Africa have drastically affected the African private sector for a few reasons. First, a private company must have large political connections to have any sort of economic success. Additionally, any sort of institutional reforms are done at the whims and interest of the current political structure. The Center for International Private Enterprise (CIPE) and the Mo Ibrahim Foundation have been advocating changing this, but are facing fierce opposition.

Wasn't smiling when  accused of rape

South Africa has often been seen as a leader in Africa, and Jacob Zuma will continue his Presidency after winning the ANC party leadership once again. Zuma has faced personal financial troubles (in which Mandela had to bail him out of), and charges of abuse of office and corruption. Zuma often has been seen as a controversial figure, especially after singing the “Shoot the Boer” song, a rather anti-white tune. Zuma must continue to fight against racism, which has occurred against the whites as remnants of the hate of apartheid still exist. Equal treatment must occur, but it is doubtful this will be pushed by Zuma who seems more interested in renovating his mansion.

However, there are positive things occurring in Africa. Specifically, South Africa’s new Science and Technology minister is investing in scientists and R&D. He hopes to create six new centers of excellence to attract skilled scientists and researchers to increase South Africa’s contribution to the world’s technological advances. South Africa currently has about 80% of the world’s known titanium, which could be used in 3-D printing and production of aerospace parts. The 10 year strategy to grow South Africa into a knowledge based economy is bold, but a strong step in the right direction.

Education will be key to Africa’s success, and the use of cheap tablets and laptops could spearhead this. Currently, Kenya is embracing tablets in a pilot project at the Amaf School. eLimu, a for profit organization is promoting digital education along with strategic partners such as M-Pesa . Other national firms such as Intel are looking to improve sales by focusing on Africa. Encouraging results such as a 50% increase in average science scores after the tablets were introduced at Amaf show that the digitization of education could be promising. In Ghana, reading skills improved after Kindle readers were provided by a One Laptop per Child, as researchers state that children even without teachers figure out how to use tablets and laptops quite easily.

The future of African education?

Ghana will be a country to watch in 2013, as they have just re – elected John Mahama, and their economy is expected to grow by 7.1% in 2012. Although a slowdown in oil production has hurt Ghana, the economy faces a problem in increasing economic activity – that is high interest rates by banks. To continue Ghana’s growth, the cost of borrowing should be lowered to allow domestic firms to compete against international ones. Ghana’s resources will lead the way with iron, cocoa, and diamond exports. However, reinvesting the proceeds of the resources into public education and health will be the determinant of whether Ghana can continue their success.

Ethiopia, Nigeria, and Angola are also interesting countries economically.  Nigeria is Africa’s largest oil producer, and reminds many of Brazil before policy reforms stabilized the country. Although Nigeria’s political turmoil, corruption, and threat of civil war between Christians and Muslims cause much uncertainty, the potential return of profits for investors who can create better telecommunications networks, stronger agricultural means and invest in oil refineries could induce more economic activity. Although Nigeria has seen a 7% growth rate because of oil profits in the last decade, without reinvestment in their own people and solving corruption and population dissension, Nigeria could stop being an African star.

Angola could be renamed as a Chinese state. Investment by China to claim oil has spurred economic growth, as well as diamonds, uranium, gold and iron. Angola’s government has apparently reduced poverty, and instituted infrastructure plans. These plans come from China, which have been dubbed oil-for-infrastructure plans. Although many criticize the deals as favouring China, infrastructure is badly needed in Africa and this is one method of getting it. The IMF has praised Angola’s reforms, as Ernest and Young now audits the government’s accounts, and has a full-fledged expenditure tracking system.  However, many activists have stated that these macro-economic reforms are simply to appease credit rating agencies and debt covenants held by the IMF, and have not trickled down to help the general Angolan population. The Angolan oligarchy has gotten richer while improving their international reputation, while the reality of many ordinary Angolans remains bleak. Improvements in social programs will be the next step in Angola; when the political elite decide to institute these reforms is another question.

From the Economist 

A strong example of an African government reinvesting well is Ethiopia. Strong public investments in education, agriculture and infrastructure have paid off with 11% economic growth between 2010 and 2011. With little resources, Ethiopia possesses a large population of 85 million that can become a strong consumer base, as well as being a net exporter of electricity.  Ethiopia currently has a doctor shortage and has increased the size of their existing classes and opened 13 new schools. However, many have criticized the plan to address the shortage by stating the policy is too aggressive and will create a generation of unqualified and inadequately trained doctors. Either way, Ethiopia’s give year Growth and Transformation plan has emphasized sustained economic growth and development of industry while also empowering their people through education. Health service has improved dramatically. However, in addition to the doctor shortage Ethiopia faces the threat of famine.

Although The Economist states that Africa is attracting large amounts of foreign investment, and the mentioned countries show strong potential, another threat faces Africa. Famines, droughts, and the constant threat of spread of diseases such as Africa will continually remind the world of Africa’s difficulties. Some estimates suggest increased drought risk and lower water access for Africans in the upcoming years. In addition to this, changes in the ecosystem will affect the agricultural industry in Africa.

Without a doubt, Africa has both promises and problems. The question for many will be whether corruption, Chinese exploitation, Islamic extremism and lack of public reinvestment will continue, or begin to wane as more sustainable policies are urged into practice. In 2013, Africa will have a constant struggle to unite different populations under one banner, as the Christians and Muslims continue to fight while South Afrikaans continue to fight for their place in a country with a fresh memory of Apartheid. Unity will be the theme of 2013 in Africa, as populations will need to deride their differences to create strong constitutions, government, and fight back at tyranny. With this general theme as an influence, the following are the predictions for Africa:

• Africa will lead the world in economic growth, as investors usher in new products to a new and large consumer base. Additionally, new ideas in education and healthcare will see more Africans contributing to their country’s economy as more innovation will spur from the continent itself.
• The Islamic extremist threat will slowly wane as support for the cause lessens. The public will grow tired of fighting, while the negativity of the rape displays will portray rather unsavoury images of the Islamic groups who will have to become a bit more liberal in their attitudes to continue to attract members.
• Egypt will have one more major riot, which will result in more democratic checks and controls being put in place as President Morsi continues to define his leadership.
• Corruption will always be present in Africa, however most governments will realize that to attract more private companies, stronger forms of governmental regulation and law will have to be enforced. This will cause a slow gravitation of stricter policies against corruption promoting free enterprise.
•  Education will be a strong theme in Africa in 2013, and will have affected positively by distribution of technology such as tablets and laptops. 

Lastly, the Western world must stop making decisions for Africa, and let the continent develop on its own. The gross misunderstanding of Joseph Kony was a good analogy for the West’s lack of knowledge of the continent. Africa will grow, and presents good opportunities for growth, but will do so internally.