Five Questions for the New Director of the Africa Growth Initiative at Brookings

Amadou Sy, currently a senior fellow in the Global Economy and Development program at the Brookings Institution, was named director of the Africa Growth Initiative at the beginning of this year.

In this post, Sy discusses the big issues facing Africa today and answers some of the key questions that will shape AGI’s research agenda in 2015.

Q1: Washington is a town full of policy experts. How do you think AGI can best contribute to the conversation on African growth and development?

Amadou Sy: Washington typically looks at Africa through four lenses. Security experts will focus on security risks and the U.S. strategy to combat terrorism and other security risks in Africa as seen with its recent involvement in helping solve the crisis in the Great Lakes region, or in Mali, the fight against Boko Haram and the LRA, or the fight against piracy off the coast of Somalia and the Gulf of Guinea. Humanitarian experts will focus on the fight against Ebola and solutions to crisis situations in countries such as South Sudan and the CAR. China experts will focus on its growing role in Africa and what it means for the U.S. Oil and other natural resource experts will focus on exploration and exploitation of such assets. Of course, all these issues are interdependent and have important consequences for growth and development.

At AGI, we try to use an “economic” lens to put all these pieces of the puzzle together with the goal of having an impact on policies that can lead to sustainable and inclusive growth in Africa. We also try to work hard to think forward on issues of importance to Africa rather than react to the crises that occasionally hit the continent. For instance, we are seriously thinking about how the private sector can better play a role in achieving developmental objectives and better partner with governments and other stakeholders. In particular, the private sector can play a key role in filling Africa’s infrastructure gap. It carried most of the investment in the ICT sector in the continent, but how about the next wave of ITC investment now that almost every African has a cell phone? Or take foreign direct investment (FDI) in the oil sector, which is an enclave sector. How can FDI  used to build an offshore oil platform  benefit the country beyond the expected oil revenues? We are also thinking of going one step deeper than the national level to assess the challenges that rapid urbanization will create in the Africa of tomorrow and how to address them. Our experts might also look at how Big Data can play a role in circumventing existing challenges in the availability of reliable data to guide policy analysis. Our challenge is really to prioritize our efforts as the agenda is incredibly vast and our resources limited. But the constant is that our economic approach complements the different voices in the conversation about Africa in Washington.

Q2: What research by AGI scholars can we look forward to in the coming months?

Sy: We have an exciting research agenda. We are looking at how to get more and better finance for development in Africa. Within this theme, we are completing a paper that looks at all external finance (private capital flows, Official Development Assistance (ODA), and remittances) that went to Africa during 1990-2012 and how the relative role of each component has changed, as well as what are the opportunities and risks associated with each one. We try to go beyond averages and really focus on how policies should be different for different countries or groups of countries. For instance, the role of ODA has decreased in sub-Saharan Africa but fragile countries are still heavily dependent on it. FDI has increased a lot but most of the dollar flows go to resource-rich countries. We are also very excited about a paper about financing infrastructure in Africa where we look at the role of the private sector, official development finance, China, and governments. We again look at how financing differs by sector and by country. For instance, the ICT sector has been financed by the private sector, while governments focus on transport and energy. We also look at the role of reducing the infrastructure gap through efficiency gains, most of which can be attained through better governance. On Big Data, we are using mobile phone usage data in Senegal to see how the opening of a toll highway is changing how people commute to work and, in particular, how the toll highway is affecting different sub-sections of the Dakar urban metropolitan area. Our preliminary results show that, in terms of human mobility, the suburbs are gaining the most while the downtown area is losing the most. This could be because people in the downtown area moved out seeking cheaper rent now that commuting is easier. Or it could be that the toll road is leading to too much traffic in the feeder roads leading to the downtown area. We are now looking for more socio-economic data to refine our research. We are also working on a series of studies on domestic resource mobilization in select African countries building on AGI’s Kenya Devolution and Revenue Sharing Calculator, which serves as a web interactive allowing users to review and adjust the Government of Kenya’s allocation formula for revenue distribution to county governance structures. We are also working on getting a better understanding of growth traps and opportunities for Africa’s six dominant economies—the African Lions. For me, this and our other research plans make it an exciting time to be leading the AGI team.

Q3: Since you left Senegal, what have been the most surprising changes on the continent?

Sy: I left Senegal when I was 18 years old, about 26 years after its independence in 1960. The Senegalese were considered lucky because we had managed to have a peaceful transition in 1981 when President Senghor resigned and President Diouf took over.  Military coups were the norm across the continent, we were paranoid about attacks by mercenaries armed by Gadhafi, neighboring Guinea Bissau and Cape Verde fought Portugal for independence, apartheid was still the law in South Africa, Mobutu was ruling Zaire, Angola was war-stricken, Namibia was not an independent state, Bob Geldof and Band Aid were singing “Do They Know It’s Christmas?” to raise funds for famine relief in Ethiopia. When I graduated from high school, a few friends received scholarships to study in the Soviet Union and communist China, and I remember meeting them during the summer break with a flurry of questions about what life was like in these two countries.  

Most African economies, including my country, were undergoing difficult structural adjustment as the post-independence episode of economic growth came to a screeching halt and reversed in 1980, in the aftermath of the oil crises of the 1970s. I remember civil servants being let go and a tense situation when sacked policemen decided to march to the presidential palace where an armed military were waiting for them.

Since the 1980s, Africa has improved its economic and institutional governance, the population is growing, a number of Human Development Indicators, such as those on infant and maternal mortality, have improved a lot, and large cities are growing even larger. But what strikes me the most today is the confidence of the youth in taking their destiny into their own hands, how technology savvy they are, how urbanized they have become, how aware they are of what goes on in the rest of the world, and how entrepreneurial they are. Even politically, the youth played an instrumental role in the two most recent elections in Senegal. My generation was much more dependent on the public sector for almost everything: getting a phone, getting an education, getting a scholarship, getting a job, and often you had to be “politically aligned” to get those. Unfortunately, jobs are still scarce and some African youth take incredibly high risks to immigrate to Europe by boat. This, to me, is a stark reminder that we are not there yet.

Q4: Africa has been high on the agenda for the global development community for many years. Why should it remain a priority in the years ahead?

Sy: A more peaceful and prosperous Africa is in everyone’s interest. In a sense, such an Africa is a “global public good” as it would translate into more trade and investment, more jobs, and more security for all. Now is an excellent time to step up our efforts to reach this goal because Africa is at a crossroads and, if the right path is taken, it could take us closer to reaching the continent’s growth and human development objectives. Take economic growth, for instance. It took a little over 20 years for per capita income in sub-Saharan Africa to recover and surpass its 1980 level, in 2003. Since then, per capita income has been growing at a rapid and sustainable pace of about 3 percent per year thanks not only to a more favorable external environment but also thanks to better economic and political governance.  

However, these aggregate figures mask the fact that some countries may have grown poorer than they were at independence in the 1960s. For most of these countries, conflicts have had severe negative effects on per capita income. In others, the deterioration of terms of trade reversed the gains of the years immediately after independence. Even within countries, income disparities across regions can be high, fueling internal conflicts such as in Nigeria. The current Ebola crisis in West Africa is a stark reminder that underinvestment in health infrastructure bears heavy human and economic costs.

It is therefore important that policymakers not only continue improving economic and political governance but accelerate the pace of reforms, including structural transformation.  As a banker recently said, when it comes to Africa, it is no longer a matter of “Why Africa?” but “How Africa?” Given its global leadership role, the U.S. is a central partner to African stakeholders, not only governments but also the private sector and civil society. The good news is that African issues can rally bipartisan support in Washington, DC and we can avoid losing another 20 years.

Q5: This promises to be a big year for Africa. What do you see as the greatest risks to the continent in the next 12 months?

Sy: I see a number of short- to medium-term risks but I think that they are all manageable. To start, the Ebola outbreak has not yet been stopped, in spite of some progress, the situation in the Sahel region remains fragile, and Boko Haram’s security threat is increasing. Stopping the Ebola outbreak remains a priority for the global community and stronger domestic and regional actions are needed to deal with extremists in the Sahel and Boko Haram in northern Nigeria.

Regarding political risk, a number of elections will take place in the continent, including in Nigeria, Côte d’Ivoire, Tanzania, Burkina Faso and Sudan. They carry the risk of pre- and post-electoral violence. The situation in the CAR and South Sudan is still volatile and the humanitarian situation is deplorable.

Regarding economic risks, the “rising growth” narrative in oil-exporting countries will be a challenge as fiscal revenues are falling, thereby shrinking governments’ room to maneuver. While debt sustainability in a post-debt relief world is not worrisome, fiscal risks have to be monitored in some countries to avoid a situation such as in Ghana, where a fiscal deficit combined with a current account deficit led the country to request an IMF program.

Finally, we have to watch carefully how the slowdown in global growth is affecting African countries. For instance, a fall in global demand could also affect global demand for the other commodities that Africa exports, such as copper.