Why Is Africa Left Behind?

[00:00:00] The Why Curve, with Phil Dobbie and Roger Hearing.

[00:00:03] It's 40 years since a bunch of pop musicians urged us to feed the world and banish hunger in Africa.

[00:00:10] But four decades on, Africa is still the least developed continent after Antarctica.

[00:00:15] And it's still the only part of the world where famines are a regular threat.

[00:00:19] And where civil wars, military coups and shaky democracies are part of the landscape.

[00:00:24] And maybe as a result, it's the source of much of the mass migration Europe is trying to hold back.

[00:00:30] So why is Africa so poor and so unstable?

[00:00:34] Why does a continent rich with resources and land and talent still need to be the subject of charity appeals?

[00:00:41] The Why Curve.

[00:00:43] So it's a funny thing, isn't it? Live Aid was, you know, such a huge thing.

[00:00:47] Yeah. Band-Aid Live Aid, yeah.

[00:00:49] We felt like we were solving the world's problems with a pop record.

[00:00:53] That was the idea.

[00:00:54] But, I mean, how naive was that, really, when you look back at it?

[00:00:58] It was always going to be a problem because, I mean, the amount of money, however big,

[00:01:02] was not the same sort of money that really changes outcomes in any long-term way.

[00:01:07] That comes down to bilateral aid and that sort of stuff.

[00:01:10] Yeah, yeah.

[00:01:10] Which has been going in in large amounts, there's no question about it.

[00:01:12] Well, I mean, yeah, to give some perspective.

[00:01:14] So Live Aid raised £100 million at that time, which is about £150 million, I think, in today's money.

[00:01:22] The UK foreign aid budget now is £13.7 billion.

[00:01:26] Yes. And that's quite small comparative to what it was as well.

[00:01:29] Yeah, yeah.

[00:01:29] Yeah, I mean, that's...

[00:01:30] Well, actually, no, back then, the UK foreign aid budget was only £2.6 billion, which is about £7 billion today.

[00:01:36] So, actually, I mean, I think it peaked and then it started to come down again.

[00:01:39] The fact that we spend a quarter of that money within this country...

[00:01:42] Well, it's a bit dubious.

[00:01:43] ...on asylum seekers and the like.

[00:01:45] But, you know, so we are spending a lot more government money than...

[00:01:48] But it's not affecting the outcomes.

[00:01:49] No.

[00:01:50] That's the thing. It hasn't. In four decades, it hasn't.

[00:01:52] And, of course, you know, if you look at the history of Africa since many of the states became independent in the 60s,

[00:02:00] you know, it's a long time during which...

[00:02:03] I mean, some things have changed, of course, and we're going to hear about that in a moment.

[00:02:05] But essentially, it is still a problem.

[00:02:08] And, you know, when you consider that it does have enormous numbers of highly talented people,

[00:02:14] I mean, you run into them, most of them outside Africa, of course,

[00:02:16] and maybe that's part of the problem, the brain drain.

[00:02:19] But why is it that it hasn't become like Asia?

[00:02:22] One of the interesting stats I remember hearing was that at independence in 64,

[00:02:27] Singapore had a lower standard of living than Sierra Leone.

[00:02:32] Right. Wow.

[00:02:33] And look how that's changed.

[00:02:35] It's just extraordinary.

[00:02:36] Yeah. So all it needs is that Singapore experience, that Singapore transformation...

[00:02:40] Yeah.

[00:02:41] ...in a lot of African countries.

[00:02:43] But then, of course, a lot of it is warring nations...

[00:02:47] Yeah.

[00:02:47] ...warring clans, despotic leaders.

[00:02:51] I mean, that's a big part of the problem.

[00:02:53] Well, but is it something that's been caused by the circumstance?

[00:02:56] Is it because of the lack of development,

[00:02:59] the fighting over very small resources in terms of industry and what have you?

[00:03:03] Is that the problem?

[00:03:05] Is that why?

[00:03:06] You know, is it a self-fulfilling thing?

[00:03:07] Yeah.

[00:03:08] Because, you know, you have plenty of wars in Asia, heaven knows,

[00:03:10] and conflicts between nations and the Vietnam War, the Korean War.

[00:03:16] You know, one could list a lot.

[00:03:17] But somehow they are now an economic driver in a way

[00:03:20] that Africa is not.

[00:03:21] I mean, there are countries that are doing well.

[00:03:23] Yeah.

[00:03:23] And there's countries which are doing well for the companies

[00:03:26] that have invested in them

[00:03:27] and are repatriating the money out of those countries as well.

[00:03:29] That is a lot of the problem, as I'm sure we'll hear.

[00:03:31] But I think, you know, it's for some reason,

[00:03:33] and I don't know what the reason,

[00:03:34] I genuinely don't know,

[00:03:36] it is something that has not transformed

[00:03:39] in the way everybody hoped that it would.

[00:03:42] Well, do you know what?

[00:03:43] We always like to try and solve a problem in half an hour.

[00:03:45] I suspect we might have a bit of difficulty with that this time around

[00:03:48] because it has been a problem for so long.

[00:03:50] But let's dig into it.

[00:03:51] Let's get the man who knows what it is about,

[00:03:54] himself an African,

[00:03:55] and that's Dr. Emmanuel Mensah.

[00:03:57] He's assistant professor at Utrecht University School of Economics.

[00:04:00] He's also consulted for the World Bank on industrialization in Africa,

[00:04:04] and he joins us now.

[00:04:05] So, Emmanuel, I mean, just before we started talking to you,

[00:04:08] we were talking about, you know,

[00:04:08] some of the reasons why perhaps Africa hasn't developed

[00:04:12] as much as we've seen in Asia.

[00:04:15] And Roger gave, you know, a very good example of Singapore,

[00:04:18] which just blossomed.

[00:04:19] Why have we not seen that sort of development happening in Africa?

[00:04:24] What's holding it back?

[00:04:25] That's a very good question,

[00:04:26] and it's something that economies have been thinking about for years.

[00:04:33] And one Nobel laureate economist said that if you start thinking about this problem,

[00:04:42] you never stop.

[00:04:42] You get lost in this.

[00:04:44] Because there's so many reasons behind it.

[00:04:46] Yes.

[00:04:47] And it's good that you mentioned Singapore,

[00:04:50] but to start, I think we should look at historical reasons.

[00:04:55] Basically, what happened during the colonization is that

[00:04:58] natural resources were extracted,

[00:05:00] imported and basically manufactured goods that embody technology.

[00:05:06] And if you like,

[00:05:07] that would basically lead to technological progress and economic growth

[00:05:11] were basically imported.

[00:05:13] And if you look at the current structure of many African countries,

[00:05:16] there has no change from then.

[00:05:18] But Emmanuel, sorry, just to pick you up on that point,

[00:05:20] I mean, you're talking about the extraction of resources

[00:05:21] during colonial times, and you're absolutely right, of course.

[00:05:24] But that was also be true of India, for example.

[00:05:27] It was true of Malaysia.

[00:05:28] It was true of lots of places that were colonized,

[00:05:31] but they have progressed in ways that Africa hasn't.

[00:05:35] Yeah.

[00:05:35] So I'm coming to that point.

[00:05:37] And it's indeed a very good point.

[00:05:39] Point that I'm trying to make is that Africa has basically been dependent

[00:05:45] on the structure of production where you import and export natural.

[00:05:49] And this has not changed.

[00:05:51] And indeed, you are right that if you look at Singapore,

[00:05:55] if you look at other countries in Asia, they've changed it completely.

[00:05:58] And that leads me to the second point, right?

[00:06:01] So this structure did not only leave Africa with a production deficit,

[00:06:09] but also left Africa with this institutional deficit, right?

[00:06:14] So if you look at the current Nobel Prize laureate,

[00:06:17] they won the Nobel Prize for understanding how institutions explain long-term development.

[00:06:24] And that is something that we all have to understand

[00:06:27] before we move to the current debate.

[00:06:29] So historical factors is very important to explaining current economic phenomenon.

[00:06:36] There's no debate about it.

[00:06:37] So when you're talking about these institutions, what are you talking about?

[00:06:40] So just the way these countries are governed,

[00:06:42] the way that the education system, the justice system, all that sort of stuff,

[00:06:46] is that what you're talking about?

[00:06:46] Yes, exactly.

[00:06:48] And I mean, if these institutions work efficiently,

[00:06:53] the resources are allocated in a way that encourages progress, right?

[00:06:59] So there's a need for structural reform is what you're saying.

[00:07:02] Yes.

[00:07:02] And it is important, right?

[00:07:05] For not, I'm not saying this to criticize colonization or to make Africa looks like it has been destroyed forever and it cannot change.

[00:07:18] No.

[00:07:18] I'm saying this especially for policymakers to understand that this is the root of the problem.

[00:07:24] And there is a need for structural reforms.

[00:07:26] So what's stopping that happening then now?

[00:07:30] So, I mean, in terms of structural reforms, I mean, to be honest with you, nothing is really happening.

[00:07:37] And if you look at the problem, the reason why we, unlike Asia,

[00:07:43] African countries have not been able to move away from this structure.

[00:07:46] The structure that I talked about is because of lack of proper reforms and leadership, right?

[00:07:54] So, if we are going to, if Africa is going to really change, then we need a sort of inspirational leadership and new institutions.

[00:08:06] But Emmanuel, you say, talk about leadership.

[00:08:08] And I mean, you know, if you look at the people who led countries in Africa after independence,

[00:08:14] Chomo Kenyatta, many people.

[00:08:17] I mean, Nelson Mandela, of course, in South Africa, in very different circumstance.

[00:08:21] Kwame Nkrumah, your own country, Ghana.

[00:08:23] These were visionaries.

[00:08:24] These were people who did see things.

[00:08:27] Julius Nyerere is another one in Tanzania.

[00:08:29] And yet, their inheritance has not been what you're saying.

[00:08:32] So, in a way, was that leadership not good leadership?

[00:08:36] I mean, they were excellent leaders.

[00:08:38] So talk about Kwame Nkrumah.

[00:08:40] Talk about Nyerere, Patrice Lumumba, and even, to some extent, Sankara from Burkina Faso.

[00:08:48] They were excellent leaders.

[00:08:49] But actually, I said, why were they also removed from power?

[00:08:53] Or why were they killed?

[00:08:55] Right.

[00:08:56] As you said, they were very good leaders and they had a lot of vision.

[00:08:59] If you look at the Ghana, I mean, the kind of production, the small production that we do is as a result of Kwame Nkrumah's initiative.

[00:09:08] Right.

[00:09:08] But why were they removed from power?

[00:09:11] Right.

[00:09:12] So, this goes back to my initial point and why the problem of African development is more complicated than we see.

[00:09:23] So, you talked about the leadership issue and structure.

[00:09:27] You say it's more complicated.

[00:09:28] So, what are the other factors then?

[00:09:29] So, now, if you look at the Singapore, they had Liu Kwa Yi, right?

[00:09:35] He did a lot of great things, right?

[00:09:37] He said, anybody can come to Singapore.

[00:09:40] They changed their language to English, the official language to English.

[00:09:45] And he said, anybody can come to Singapore.

[00:09:46] And there was zero tolerance for corruption in Singapore.

[00:09:54] These are some of the things that I feel African countries can learn from to be able to change our way.

[00:10:02] So, first, institution is a very big inhibiting factor of development.

[00:10:08] If you look at the current institution, it's not conducive for changing things rapidly, for creating the sort of employment that the youth need now to stop migration.

[00:10:26] And if Africa is going to develop, then we need an institutional reform, especially the way we do our democracy.

[00:10:41] And there should be strong checks and balances to be able to fight the problem of corruption and misallocation of scarce resources.

[00:10:50] Emmanuel, you mentioned migration there.

[00:10:52] And that is something, I mean, if you have a brain drain, if you have the talented people, and I've met so many talented people around the world from Africa, many of them actually from Ghana, funnily enough, who are working not in their country, who are working in Europe, in the UN or in the US or wherever it is.

[00:11:09] And you can see why they would do it because they get better pay, perhaps better living conditions.

[00:11:14] But that drains the talent pool for Africa, doesn't it?

[00:11:18] Yeah, that's a good point.

[00:11:20] But the question that we should also ask is, why are they leaving?

[00:11:25] Why are they staying in Europe, Asia, or other parts of the world?

[00:11:32] The reason is that there is no opportunity, right?

[00:11:35] So if I would go back to Ghana and look for opportunities, first, I would be frustrated.

[00:11:41] Because of, again, institutional problem, it would take me a long time to get a job in the government or even in the universities.

[00:11:50] And also, for me, if these talented people, they want things to work a certain way, they want to develop themselves, they want to be on top of certain things.

[00:12:05] And if the institutional environment will not allow them to do that, they have, as individuals, they have to make their optimal decisions.

[00:12:13] And that's most of it.

[00:12:15] I talk to my colleagues around the world.

[00:12:17] That's the main reason why they don't want to go back.

[00:12:20] So that's not creating the opportunity because the structure is not right.

[00:12:23] But if the structure was right, would the money follow?

[00:12:27] Or is it a question of structure and money?

[00:12:30] Because obviously quite a lot of foreign aid is given to Africa from the West.

[00:12:35] But it's not spent on vaccines.

[00:12:38] It's spent on education.

[00:12:39] I'm not quite sure how much of it's obviously spent on extreme poverty.

[00:12:43] I'm not sure how much of it is left to actually helping countries to become sustainable economies in their own right.

[00:12:55] Or that gets left to the World Bank.

[00:12:57] And the World Bank says, well, sure, we'll lend you some money.

[00:13:00] But you're going to have to pay it back with interest and creates a disadvantage almost.

[00:13:07] Or you're just left for other companies to invest and repatriate their profits elsewhere.

[00:13:12] So there needs to be a financial restructuring as well, doesn't there?

[00:13:16] Yeah, indeed.

[00:13:17] And it comes back to the issue of institutions, right?

[00:13:20] If institutions are strong where there is checks on where money is going, right?

[00:13:32] So the issue of allocative efficiency will not be a problem in Africa.

[00:13:39] So that one thing you should know that foreign aid from the West is not a huge chunk of budget in Africa, right?

[00:13:48] It's very tiny.

[00:13:49] That's what a lot of people don't know.

[00:13:51] Now, if you look at even inflow, money inflow to Africa, I think remittances from some of us, if you put it together, it's even higher than foreign aid.

[00:14:00] That's really interesting.

[00:14:02] So you think money that comes from people who've, Africans who've moved abroad, who are sending money back, their remittances, is larger than the aid budget that comes in?

[00:14:10] Yes, far larger than the aid budget that African countries receive.

[00:14:15] It's not really something that is going to, the aid that is going to Africa is not something that is going to change a lot of things.

[00:14:23] Of course, it helps, but this is really tiny compared to even the total budget of many African countries.

[00:14:31] Of course, it varies from country to country.

[00:14:33] For a country like Ghana, it won't matter.

[00:14:36] Perhaps for a country like Malawi, South Sudan, Sudan, the poorest countries in Africa, it may be important.

[00:14:42] But in terms of doing what you think needs doing, the money that comes back from the remittances, that if you like comes into the economy,

[00:14:48] is that used in ways that will actually advance economically that country?

[00:14:54] Does it work that way?

[00:14:56] No, I mean, it goes to individuals, right?

[00:14:58] So there's a lot of research that has shown that it has helped individuals to start businesses,

[00:15:07] to do some things that will increase their welfare, reduce poverty.

[00:15:12] So it's helping in many ways, but it's different from the way you would think about aid, right?

[00:15:18] The aid goes to government and remittances basically goes to individuals who are using it.

[00:15:24] Some are using it to create their businesses.

[00:15:27] Some are using it to invest in their education and so forth and so forth.

[00:15:31] So in that way, gradually, yes, it's being beneficial to African countries.

[00:15:38] And that investment in businesses, I mean, are they being successful?

[00:15:42] Or is that structure that you're talking about just so wrong, so out of kilter with what's needed that, you know,

[00:15:50] new businesses really struggle to grow?

[00:15:52] Yeah.

[00:15:53] I mean, entrepreneurship, Africa is a difficult landscape for entrepreneurship.

[00:15:58] But we should know that there are also many opportunities.

[00:16:02] And many Africans are really starting businesses and doing very well.

[00:16:09] So it is possible to say that actually there is progress going on.

[00:16:12] Because this is one of the things we in Britain, in the West, have an impression of just an endless succession of disasters.

[00:16:19] But looking at Africa as a whole, would you say there is clear progress in terms of economic advancement,

[00:16:26] industrial advancement, educational advancement?

[00:16:30] I mean, is it possible to say that?

[00:16:32] Yes.

[00:16:32] Compared to the 1990s, 80s, we see a lot of progress in Africa.

[00:16:37] So if you look at the current economic growth numbers, right?

[00:16:43] I mean, the economic growth, GDP growth of Africa is higher than most Western countries, of course.

[00:16:49] And that's expected because of low income.

[00:16:52] Africa has low income.

[00:16:53] The GDP growth for 2023 was 3.6.

[00:16:58] Only the regions that achieved higher GDP growth are Asia, I think the Caribbean, and then Central America.

[00:17:11] But Africa is indeed one of the fastest growing regions in the world.

[00:17:17] And compared to the 1990s, right?

[00:17:20] Also, we see a lot of structural change.

[00:17:23] What do I mean by structural change?

[00:17:24] In the 1990s, 80s, 70s, a lot of Africans were working in agriculture, mostly informal subsistence farming, right?

[00:17:35] But now we also see a lot of movement of workers from agriculture to mostly services, right?

[00:17:45] And these services have higher productivity than agriculture.

[00:17:53] And therefore, we see a sort of structural change that is growth enhancing in African countries, right?

[00:17:59] So African countries basically move, many Africans are basically moving from low productivity sectors to higher productivity sectors.

[00:18:07] And this is creating growth in Africa.

[00:18:11] But what's growing in Asia, of course, has been not moving from the fields to services.

[00:18:16] It's moving from the fields to manufacturing, which obviously is the story for China.

[00:18:22] So is that part of the problem?

[00:18:24] There's not enough of a manufacturing base?

[00:18:26] I mean, if you look at it, so it depends on the Asian country.

[00:18:29] For China, for so many years, I mean, we see that China basically develop, reduce poverty through export-led industrialization.

[00:18:39] But in Africa, what do you see that there's lack of, so the soft core structural change that I just described,

[00:18:48] is not being driven by manufacturing-led exports, right?

[00:18:53] It is driven by services.

[00:18:55] And that is a problem because services basically is low productivity.

[00:19:01] Some services, not all services, some services is low productivity compared to manufacturing in Africa.

[00:19:07] What sort of services are you talking about?

[00:19:09] So informal trading services like wholesale, retail, these services are lower, has lower productivity than manufacturing.

[00:19:21] Right.

[00:19:21] And also very much domestically focused rather than export-focused.

[00:19:24] Yeah.

[00:19:25] But now things are changing, right?

[00:19:26] Because of the arrival of the internet in Africa, these services are actually tradable.

[00:19:30] And one of my new papers, new projects that I'm working on, we show that indeed, I mean, even in consumer services, they are tradable.

[00:19:39] And therefore, it may be possible to also develop via this sort of services.

[00:19:46] What do you mean by that?

[00:19:47] I mean, so would it be call centers developing in Africa, that kind of thing?

[00:19:51] Yeah, not only call centers, right?

[00:19:54] So...

[00:19:55] I don't think there's going to be much call for call centers in the future.

[00:19:57] Well, probably not, but the equivalent, the internet equivalent of that, I suppose.

[00:20:00] Yeah, if you look, think about, I don't know if you know, like online wholesale and retail, think about Yumiya.

[00:20:07] And think also about offering like expertise, scientific expertise to lead firms in the West.

[00:20:15] So there are so many things that African countries, African countries can do to, I mean, develop via services.

[00:20:23] But again, we must not lose sight of the importance of production, especially manufacturing.

[00:20:31] No country has developed with services.

[00:20:34] It's never happened before.

[00:20:37] India is doing well via services.

[00:20:41] But again, even the growth research, recent research has shown that the growth of India is driven by, again, consumer-facing services and not business services.

[00:20:52] But they have a high-tech involvement increasingly.

[00:20:55] We know that Apple is beginning to invest, for example, in Indian productivity.

[00:20:59] You've got the Silicon Valley is effectively of India developing strongly.

[00:21:06] Does Africa need big companies like Apple to invest, to put in the investment, to build up production there?

[00:21:15] Perhaps with some of the problems with China, they might be more interested in.

[00:21:18] Could that happen?

[00:21:19] Yeah, but the big companies like Apple are not big employers.

[00:21:22] That's the thing.

[00:21:23] And I would have thought, I mean, you're talking about services, but maybe more business-facing services rather than consumer-facing services.

[00:21:29] I would have thought, you know, the sorts of industry that Africa needs to see more of are employment-heavy industries, so that you're getting, you know, you're reducing unemployment, you're getting more people gainfully employed at higher wages, so that they can support the economy's own growth.

[00:21:45] So you do get a domestic economy growing.

[00:21:47] Excellent point.

[00:21:48] Excellent point.

[00:21:49] I mean, that is a question, right?

[00:21:52] Right, so poor sectors are increasingly becoming jobless and therefore may not be conducive for African countries to use as the engine of economic growth, right?

[00:22:04] So, and if you look at the past, if you look at China or even in the UK, I mean, one of the key advantages of using manufacturing as the engine of growth is that it's able, it's low-skilled and it's able to absorb large proportion of the workforce.

[00:22:24] So if you look at Africa, large proportion of workforce are unskilled and therefore which sectors will be able to absorb these workers but also have productivity that is enough to drive growth in African countries.

[00:22:41] But it will be low wage in all probability, won't it, Emmanuel?

[00:22:44] That's the thing.

[00:22:45] If it is low-skilled, it will tend to be low wage.

[00:22:48] So that really won't address the problem.

[00:22:49] So it will be higher wages than a lot of these people have been on, of course, won't it?

[00:22:52] Yeah, but the wages will be higher than alternative, right?

[00:22:55] Maybe higher than alternatives.

[00:22:57] So if you are working in farming in a whole year, your income is, let's say, $500 and you move to manufacturing and let's say by the end of the year, your whole income is like $3,000, something like that.

[00:23:12] Even though it's still low wage relative to someone, a research scientist or someone who is working in government, it's still very important for growth.

[00:23:26] So a parallel perhaps to somewhere like Bangladesh where garment production, for example, has brought a lot of people out of poverty even though they work in pretty quite bad conditions and very low wages.

[00:23:36] But nonetheless, it's much better than it was.

[00:23:38] Do you see that kind of industry perhaps being somewhere where Africa could go?

[00:23:42] Yeah.

[00:23:42] Yeah.

[00:23:43] So if you look at the manufacturing industries that are really doing well in Africa, so if you look at the company, I don't know if you know about it, Revita service, they produced over 200 million serendus, which is enough to meet half of Africa's routine immunization.

[00:24:04] And they do a lot of other wonderful things and they export.

[00:24:07] These are companies that are really doing well in Africa.

[00:24:11] And they're doing this in Africa is what you're saying?

[00:24:13] Yes, they are doing this in Africa, in Kenya.

[00:24:15] Whereabouts?

[00:24:15] In Kenya, in Mombasa, the city of Mombasa.

[00:24:18] So it's even the New York Times published them.

[00:24:22] And one fascinating thing about these companies is that they are increasingly capital intensive, skill intensive, and highly automated.

[00:24:33] So if you look at the Revita Healthcare that produces over 300 million syringes, they only do that using only 700 workers.

[00:24:43] Right?

[00:24:44] They do that using only 700 workers.

[00:24:45] So this should tell you that this is a highly capital intensive production or company.

[00:24:52] And this sort of production is not suitable for the workers, the like proportion of the unskilled workers in Africa.

[00:25:01] So my argument is that many Western economies argue that Africa should focus on services and forget about industrialization because it's increasingly becoming automated and does not offer any feasibility for reducing poverty on the continent.

[00:25:23] But my argument is that the expansion of these industries are very important.

[00:25:30] Yes, it may not have the capacity to absorb low skilled workers because of automation, but may generate value added and revenue.

[00:25:42] That is important for domestic demand.

[00:25:45] So, I mean, if it was done right and you had that structure that you're talking about, if you had industries that were, maybe they were employing very few people, but they're creating a profit for the country and it was being taxed by the country, then there would be government jobs, for example, to maintain the economy and improve the standard of living for everybody.

[00:26:06] Yeah, exactly. But these workers would also become rich and they will demand for domestic services that we are talking about.

[00:26:12] And these services have the potential to employ more workers.

[00:26:16] So what you're talking about is what's happening in this particular case, Mombasa in Kenya, perhaps one of the most stable countries in Africa, certainly one of the top five.

[00:26:25] And if you were trying to do that, for example, in Burkina Faso or in Zambia, potentially, it would be a much harder ask in many ways, wouldn't it?

[00:26:35] And that becomes the question. I mean, one of the problems that Europe faces right now with the European Union, with its very slow growth, is that Europe is struggling to attract new industries because of a whole set of different regulations as you travel from one country to another.

[00:26:50] And so Europe is talking about whether they need to have a more unified approach, even though they're a series of different countries.

[00:26:56] So China, for example, was able to grow, first of all, because it was an autocratic regime, they could do what they wanted.

[00:27:02] And secondly, it was just one country with billions of people.

[00:27:05] So, I mean, does Africa need to adopt a strategy which crosses borders?

[00:27:11] And I don't know, you know, which is difficult politically, isn't it, in Africa, given the history that we touched on.

[00:27:18] But really, for it to work, if you're going to have, like, growth poles, areas where there is, you know, businesses that set up and can spread wealth to the population, it probably needs to spread from one country to another as well, which politically is very difficult to do.

[00:27:35] Yeah, that's an excellent point.

[00:27:38] So if these few African countries, right, are able to use industry not to create employment, because that's difficult in the current system.

[00:27:52] So the global manufacturing technology is increasing and becoming capital intensive and highly automated, right?

[00:27:58] So what African countries can do is to basically pursue what I would describe as jobless industrialization.

[00:28:08] So they produce goods that are especially targeted for African markets.

[00:28:14] Think about malaria drugs.

[00:28:16] So malaria is mostly in Africa, but most of the drugs are imported from China and India.

[00:28:23] Why can't we do that?

[00:28:25] Right.

[00:28:26] So if we are able to stimulate the right institutions, we are able to invest in the right companies, right, to produce this sort of goods, but also trade within Africa, right, as the African-coordinated free trade aims.

[00:28:42] Then the question, your question or the problem that you raise may be solved.

[00:28:47] So Buknafa so may not be able to act or produce things like Kenya, but they may be able to supply inputs into the production of manufactured goods in Kenya.

[00:29:01] And by trading within Africa, they can, we can, African can grow.

[00:29:07] So each country can specialize in different things and different production.

[00:29:14] And this can basically be beneficial to all of Africa.

[00:29:17] For example, if you look at West Africa, we mostly import milk from Europe.

[00:29:24] But Kenya has the latent potential to produce milk and supply to the whole of West Africa.

[00:29:29] So the question is, why are they not doing that?

[00:29:32] Why are we still importing milk from Europe?

[00:29:34] Well, that's a great question.

[00:29:35] Why is that happening?

[00:29:36] Because trade within Africa is expensive.

[00:29:40] Because of transport, because of tariffs, essentially.

[00:29:42] Yes, transport, tariffs, and many other factors.

[00:29:46] So this means that we need to build infrastructure within Africa, transport infrastructure within Africa, but also make sure that trade within Africa is,

[00:29:57] cost of trading with Africa is low compared to cost of trading in other regions.

[00:30:02] But Emmanuel, a lot of this comes down.

[00:30:04] I mean, what you're saying is clearly the way forward.

[00:30:07] But the willingness to do it and the ability to do it are hugely restricted by, well, just for example, you know, near Kenya in Sudan, in South Sudan,

[00:30:17] you have countries that effectively are failing even to keep the most basic institutions going at the moment.

[00:30:24] There's a war.

[00:30:25] Somalia barely functions as a nation at all.

[00:30:28] Just in that one area of East Africa, one could say that.

[00:30:32] And that is not going to work towards the things you're talking about.

[00:30:36] So in a way, we're still stuck in that position almost to four decades ago where instability, institutional failure and war and famine are all pushing to stop Africa developing.

[00:30:49] Well, maybe so.

[00:30:50] Maybe the solution is that those countries which are able to work together, you develop a free trade zone and you build infrastructure.

[00:30:57] But would they be willing to do that if they're already fighting even within each other?

[00:31:00] Well, the ones that are not fighting and then over time perhaps it progresses a bit like the European communities growing.

[00:31:04] Yeah. So it goes back to what I started with that they all did in effective institutions to prevent some of these things is key to development, right?

[00:31:16] What is happening in the horn of Africa is a failure of institution to hold some leaders accountable, right?

[00:31:27] But also, you ask yourself, how do these leaders or rebels get the weapons, right?

[00:31:37] Where do they get the machine guns and other weapons to start the fight?

[00:31:44] So the responsibility is not only on African countries' leaders, but also the world has to play a role, right?

[00:31:52] So if African countries are able to build institutions that is able to prevent some of these things, that is strong enough to prevent them.

[00:32:03] But also the West is not some organization or individuals in the West, wherever they are, are not taking advantage of these situations and by not supplying weapons and other things.

[00:32:16] I think all these things will stop.

[00:32:18] So, and it goes to other problems, right?

[00:32:22] So it's not only about the war in the horn of Africa or the problems that these countries are facing.

[00:32:32] It goes to other areas like why is it that Africa borrows from the international capital market at a more expensive rate than other developing regions?

[00:32:47] Why is it that when a peaceful coup d'etat happens in Burkina Faso and Kenya goes to the international market to borrow money, they pay higher interest because of so-called passive, because of the passive rates caused by this peaceful coup d'etat.

[00:33:07] So I think the problem is big, but also I think the world has a role to play to make it fair and efficient for African countries to develop.

[00:33:22] And do you think part of that institutional development is the idea that you talked about, the need for tariff-free trade?

[00:33:32] Could there be a solution which is a bit like, I hate to give the EU as an example because it creates so many problems by itself, but the idea that you've got this institution that sits alongside or above all the individual governments?

[00:33:45] Well, that you've got the African Union now, but it doesn't fulfil that function, does it, Emmanuel?

[00:33:49] Yeah, the African Union is, it's only very effective.

[00:33:53] I would say it's supranational institutions are not effective to creating good institutions in individual countries, right?

[00:34:04] So if you take, I don't know so much about the European Union, but if the EU able to enforce some kind of domestic policies in, let's say, Netherlands or let's say...

[00:34:21] Yeah, I mean, they have regulations which are imposed by the European Union that they have to comply to.

[00:34:26] Yeah.

[00:34:27] Maybe, yes.

[00:34:28] If the African Union is more effective, they'll be able to do that.

[00:34:31] But I feel like even before you have a very effective supranational institution like African Union, that can help, there needs to be some sort of convergence in institutional development, right?

[00:34:45] So let me take an example of Botswana and Mauritius.

[00:34:49] These are small countries in Africa with high level of institution and institutional development and low levels of corruption compared to, let's say, if you are going to impose the same institutional rules on these countries compared to, let's say, a country like Somalia is going to be difficult.

[00:35:08] So first, my theory is that African individual countries needs to develop so that there's some sort of institutional convergence before a supranational institution like African Union will be able to function effectively.

[00:35:24] Unless that supranational organization is there helping providing some of the funds to help the development of institutions in those other countries.

[00:35:32] Which has also happened in Europe, because you think of Bulgaria and Romania when they were brought in.

[00:35:35] Yeah.

[00:35:36] Their institutional abilities were very limited, and the EU has worked on those, and many people said they can't be part of one organization, but they've kind of made it work.

[00:35:46] And it might make it a safer investment as well for external investors if they say, well, if you're part of this supranational group following this set of rules, there'll be guarantees.

[00:35:54] I mean, this could be another way.

[00:35:56] But as I argued initially, African countries are diverse with different rules and different institutions, right?

[00:36:09] So it's kind of difficult for the African Union.

[00:36:12] And remember, the African Union is a political organization.

[00:36:15] It's a political union, sort of political union.

[00:36:18] It's a huge, huge subject and a very, very difficult one, I think, to resolve, as you suggested.

[00:36:24] But do you have, as an African yourself, do you have hope that things will change more in the next four decades, say, than they have going back to, you know, Band Aid and Live Aid in 1984?

[00:36:35] Do you think that really is going to happen?

[00:36:37] If we were sitting down four decades hence, we'll still be saying, oh dear, Africa is still a basket case?

[00:36:42] I mean, a lot of things has changed since 1980s when the Band Aid song was sung, right?

[00:36:48] I mean, and before I even go into the main point, I mean, the Band Aid was, I mean, the intention behind the song was good.

[00:37:01] And I might say that Bob and his colleagues did well in raising a lot of funds, which I think they are still doing now to support, to do some charity work across Africa.

[00:37:15] But he raised 100 million to the Live Aid concert.

[00:37:18] I don't know about the record.

[00:37:19] The record was less.

[00:37:20] Yeah.

[00:37:20] He raised 100 million pounds, which is a drop in the ocean.

[00:37:23] Which is good and it's commendable.

[00:37:28] But, I mean, if you look at the lyrics and depiction of Africa, it actually has more negative consequences.

[00:37:42] So the negative theory.

[00:37:43] Oh, yeah.

[00:37:43] I mean, it's very patronizing.

[00:37:45] Yes.

[00:37:45] Looking back, it's an embarrassment.

[00:37:47] People feel that, I think.

[00:37:49] Yeah.

[00:37:49] Or just the line, do they know it's Christmas?

[00:37:51] I mean, it's so constant.

[00:37:53] That's in the lyrics.

[00:37:54] Yeah.

[00:37:56] It's not very good for Africa.

[00:37:57] The imagery, the song portrayed, is not good.

[00:38:02] You know, tourism is very important.

[00:38:03] The countries like Kenya, Mauritius, and other East African, they depend a lot on tourism.

[00:38:11] So if you portray Africa this way, then it's not good for tourism.

[00:38:17] And I talked about Pacific Ricks also.

[00:38:20] So if African countries are going to the international market and they are looking for, even they are trying to attract foreign direct investment.

[00:38:29] And you portray Africa as sort of a hopeless continent that lacks the agency to solve important problems on its own.

[00:38:41] And therefore, it's a sort of a white savior to come and do it.

[00:38:45] Yeah.

[00:38:45] I know.

[00:38:46] Crazy stuff.

[00:38:47] Absolutely.

[00:38:47] I think we're all on the same page on that.

[00:38:48] It creates a lot of problems.

[00:38:50] Right.

[00:38:50] So in four decades time, though, how different a continent will it be, do you think?

[00:38:56] Yeah.

[00:38:56] I feel like the continent would change in a positive direction.

[00:39:00] I'm very optimistic that given the digitalization, the innovation that we see, and the fact that education levels are increasing in Africa, a lot of things we see.

[00:39:14] And African countries are now realizing that we need to trade within Africa.

[00:39:20] We need to encourage international nature.

[00:39:22] So I hope that with the African free trade continental agreement and the area would give opportunity for many African countries to produce, especially for the region,

[00:39:40] and then work on creating a very sound institution that will support economic development.

[00:39:50] And remember that also population growth will be about two billion by 2050.

[00:39:56] And about one third of workers will be middle class.

[00:39:59] This will provide huge domestic markets.

[00:40:03] Yeah.

[00:40:03] That will support the sort of production and industrialization that I'm talking about.

[00:40:09] Of domestic consumption.

[00:40:10] But it will be Africa's century.

[00:40:11] We can only have...

[00:40:12] And tourism, obviously, will be a big opportunity as well because so many other parts of the world are over-touristed.

[00:40:18] And we've all got this appetite to travel.

[00:40:20] So we're looking for other places to go.

[00:40:22] Emmanuel, thank you so much for being with us.

[00:40:24] I really appreciate your time.

[00:40:25] And, well, if we're still on the air in four decades' time, we'll come back to you and find out what you think there.

[00:40:32] All right.

[00:40:32] We'll be saying, what were you talking about?

[00:40:34] Yeah.

[00:40:34] Look how well we're doing now.

[00:40:36] Emmanuel, thank you so much.

[00:40:37] Thank you.

[00:40:38] Big strides forward in medicine, by the way.

[00:40:40] We're still doing this in four decades' time.

[00:40:42] Next week.

[00:40:43] What can we solve next week?

[00:40:44] Well, it's a rather different scale problem.

[00:40:46] But it is one that's actually dominated the headlines this year.

[00:40:48] And this is really how organisations deal with allegations of sexual misconduct.

[00:40:53] And we know that the headlines are currently full of one particular story.

[00:40:57] Mr. Greg Wallace you're talking about.

[00:40:58] Well, all alleged.

[00:41:00] He's denied everything.

[00:41:01] Yeah.

[00:41:01] But when we look at, for example, the Church of England and the whole recent problem about this man, Smythe, and what he did, and how they knew and why they didn't act when they did.

[00:41:10] And, of course, the history is very long.

[00:41:12] And organisations simply, it seems, not learning.

[00:41:15] Yeah.

[00:41:16] The lesson, which is you don't ignore these things.

[00:41:18] It seems to be.

[00:41:19] A lot of it seems to be sort of BBC employees of a certain age, Roger.

[00:41:23] Your sort of age, actually.

[00:41:24] Yes.

[00:41:25] Yeah.

[00:41:25] Yes.

[00:41:26] I'm not aware of that.

[00:41:28] When do the revelations come out about you?

[00:41:31] Nothing was proved.

[00:41:33] But you must have, during your career, I mean, this is something we can pick up on next week, but you must have been aware of people who behaved in a particular way.

[00:41:40] But the thing is, I'm so old that when I started, that was normalised.

[00:41:43] A lot of that behaviour was seen as being the way it works.

[00:41:46] Anyway, we're going to dig into this.

[00:41:48] We're going to have a sense of why it is that organisations don't seem to be able to handle this particularly well and what the lessons are.

[00:41:54] That's what we're going to look at next week.

[00:41:55] Next week on The Why Curve.

[00:41:56] We'll see you then.

[00:41:57] Thanks for joining us today.

[00:42:01] We'll see you then.