After the Bell: The Economist’s long-overdue epiphany on 'the capitalist revolution Africa needs'

Has The Economist magazine ever been more wrong about anything than it has been about Africa? Please don’t misunderstand, I love The Economist. I’m a subscriber and have been for years. The Economist’s articles about America and Europe are interesting, entertaining, thought-provoking – everything that is the best about smart, business-savvy journalism. 

Yet, whenever The Economist decides to devote a cover to Africa, which it seldom does, I sigh a little inside. The two stand-out blunders the “paper”, as it calls itself, has made this time are emblematic not only of the dynamics of the publication, but of the views and prejudices of their urban, developed world readers. 

In 2000, the cover was emblazoned with the words, “The Hopeless Continent”. It was exactly at that point that African growth took off. The explosion of manufacturing and building that took place in China and Asia generally underpinned the nascent business environment on the continent, since they were predominantly involved in resource extraction. But while mining underpinned African economies, including ours in the 2000s, the change was exacerbated by urbanisation, population growth, the spread of democracy and a host of new governments. 

For the entire decade after the article was published, African growth outpaced global growth and just smashed developed economies (although, of course, it’s easier to grow off a low base than it is to grow off a high base). 



Technology that had held Africa back for years, such as communications and logistics, got enormously better very fast. It seemed to me at the time that nobody was more surprised about this than Africans themselves!

One indication is that SA, one of the big beneficiaries of the global resource shortages, ran budget surpluses in 2006/07 and 2007/08. Who has ever heard of an African government spending less than it collects? Perish the despicable thought. It certainly hasn’t happened in SA since. 

So then in 2011, The Economist decided, somewhat belatedly some would argue, to return to the issue of African growth. This time, slightly stung by the previous headline, the cover trumpeted, “Africa Rising”.

No sooner had the issue been published than African economic growth subsided, matching global growth but no better. And once again, that continued for a decade. Africa wasn’t “rising” so much as “maintaining”. The easy wins had been achieved; now came the difficulties. 

What did The Economist miss? Well, when you are generalising across 54 countries, it’s not easy. Often I think Europeans tend to fall into this trap most readily because they are used to generalising about Europe, which also has a host of countries with different cultures and histories. So why not do the same across Africa? But Europe is much more generalisable. Just to take one statistic, rates of urbanisation in Europe range between 70% and 90%. In Africa, urbanisation ranges between 22% in Ethiopia and 75% in SA, for example. 

Second, Africa is complicated politically: democracies border kleptocratic states, which border military juntas. Generalising across these differences is not only impossible, but often tells you more about the quantifier than the quantified. People like to categorise Africa, I think, because it is more or less geographically contingent and perhaps, also, more or less racially contingent. Africa generalisation contains a whiff of racial particularity, I always sense, probably unfairly. 

The other problem is that developed world analysts tend to rely on statistics that are nominally comparable to those in developed countries. My experience is that African statistics are really just loose estimates compiled by very well-meaning people with very few resources. But, you know, you use what you can; the alternative is just guesswork. 

Still, the point is that it’s very easy to be very wrong, and since The Economist tends to be allergic to sitting on the fence – one of its best qualities – it ends up being the publication that gets things wrong, unlike those that withhold an opinion. 

So, what about the latest effort? I hate to say this, but this time I think The Economist has absolutely nailed it. The most recent cover calls for “the capitalist revolution Africa needs” and points out that Africa is slipping behind. Income per person has fallen from a third of that in the rest of the world in 2000 to a quarter, and output per head might be no higher in 2026 than it was in 2015, it says. 

These stats, as I say, could be unreliable, but the story highlights something easier to measure: the number of companies with revenue above $1-billion is much smaller than in other regions, and the number looks to have declined. “Africa is a corporate desert,” the article declares. The continent should concentrate less on providing mosquito nets, and more on creating the conditions that would allow African businesses to thrive and expand. Hear, hear to that.

I particularly liked this sentence: “There is a dangerous strand of development thinking that suggests growth cannot alleviate poverty or does not matter at all, so long as there are efforts to curb disease, feed children and mitigate extreme weather. In fact, in almost all circumstances, faster growth is the best way to cut poverty and ensure that countries have the resources to deal with climate change.”

Africa is neither “hopeless” nor “rising”. To the extent that it is a singular entity, it’s a work in progress. And, as The Economist says: “It needs less paternalism, complacency and corruption – and more capitalism.” DM