By Patrick Bond and cross-posted from Counterpunch.org
From May 11-13, the World Economic Forum (WEF) Africa summit in Kigali, Rwanda reinforced extractive-industry and high-tech myths. The gathering unveiled the 1%’s elite’s exuberant imagination and its lack of exposure to the continent’s harsh economic realities. As an antidote, grassroots protesters all over Africa are questioning the logic of export-led ‘growth’ and renewed fiscal austerity, instead demanding that policies meet their basic needs.
* “Africa will probably remain natural resources-driven for the next two decades at least,” pronounced software executive and WEF leader Brett Parker. “Investment in infrastructure, transportation and logistics has been responsible for more than half of Africa’s improved economic performance and is a cornerstone of socio-economic development.” In reality, commodity prices have since 2011 crashed to record lows, along with the main measure of shipping and logistics (the now rock-bottom Baltic Dry Index), leaving resource-dependent societies like Nigeria in profound crisis.
* In spite of the oil price falling below $30/barrel earlier this year and hovering around $40 today (from a 2008 peak of $140), Standard Chartered Bank’s Razia Khan (whom Cambridge University considers “the leading analyst on African economies”) argues that Uganda should keep pumping scarce investment funds into petroleum exploration, notwithstanding production costs there of $70/barrel.
* Similar pro-corporate advice comes from Greg Mills – who directs the (Johannesburg mining tycoon) Oppenheimer family’s Brenthurst Foundation – in search of state “policies which aim to encourage long-term, generational investment” in Africa’s utterly collapsed mining sector. The Oppenheimer’s Anglo American Corporation – Africa’s largest firm over most of the last century – lost 94% of its value on the London Stock Exchange from 2008 peak to 2015 trough.
* Ignoring such data, intoned African Leadership University’s Fred Swaneker, “The Africa Rising narrative presents the most compelling argument for the continent’s prosperity.”
New elements of Africa Rising hucksterism emerged at this year’s WEF, including a child-like fascination with “Fourth Industrial Revolution cyber-physical systems” – artificial intelligence, robotics, nanotechnology, biotech and the like – that will supposedly allow Africa to leapfrog the world, indeed to “lead the way”, because the continent is “the world’s fastest growing digital consumer market.” Reality check: fewer than one in three Africans have home electricity, and just one in five use the internet.
Still, vain hopes for vibrant consumption markets continue. When Cape Town hosted the WEF in 2011, African Development Bank economist Mthuli Ncube made fanciful claims about the new middle class: “Hey you know what, the world please wake up, this is a phenomenon in Africa that we’ve not spent a lot of time thinking about.”
Even The Wall Street Journal, one of the world’s great business periodicals, was fooled by Ncube: “Last year, the continent’s 313 million-person middle class – those who spend between $2 and $20 a day – comprised about 34% of the population. Its number rivals that of the middle classes in China and India, according to the study, which was reviewed by The Wall Street Journal.”
That review was rather incomplete. Massively indebted and unable to buy even basic foodstuffs for $2/day in most African cities, the supposed mass middle class has fizzled. A more accurate rendition of ‘middle class’ lifestyles would start at $20/day. This group of Africans actually fell as a share of the population from 6.5% in 2000 to just 4.8% even at the peak of the commodity boom in 2010, even Ncube’s data show.
More recently, admits a Reuters journalist, “Whether it’s selling pensions, pasta or toothpicks, investors in Africa have been targeting the booming middle class. But a year of diving commodity prices has exposed how much the continent, and its consumers, still rely on exporting resources. This, in turn, is raising doubts about whether the growth of the African middle class has been overplayed: has the wealth created by the decade of growth been widely distributed, or have only relatively small pools of urban consumers merely benefited from a transient commodity boom?”
As reality dawns, even the continent’s oldest retail bank, Barclays, has just announced it will sell its African operations…