In last year’s Foresight Africa 2014 report, Africa Growth Initiative (AGI) scholars and colleagues highlighted many issues they believed would influence the course of the continent’s development in 2014. The majority of the issues focused on priorities to accelerate economic growth, including job creation for youth, development finance, the Post-2015 Development Agenda for the continent, agricultural and industrial production and transformation, and strategies to harness emerging partnerships for Africa’s development. Other issues discussed in Foresight Africa 2014 emphasized security—specifically dealing with piracy in the coast of Somalia and the Gulf of Guinea, as well as approaches to strengthen Africa-led peace interventions. Finally, the issue of Africa and international justice was discussed with a special focus on the International Criminal Court and its relationship with Africa. AGI fellows monitored the issues identified in Foresight Africa 2014 throughout the year, and their insights became a valuable part of policy discussions in various countries and also at the regional and continental levels. Thus, to a large extent, Foresight Africa 2014 accurately highlighted the many critical issues of 2014, and therefore no doubt contributed to policy discussions.
In 2014, several other events and issues—both negative and positive—emerged and had major impacts on the course of development in the continent. Here we highlight a few of those issues:
African countries continued to register robust growth rates in 2014. The high rates of growth of the African economies, though supported to some extent by high commodity prices, were also due to continued improvement in the investment climate, prudent macroeconomic policies and also sustained flow of foreign direct investments. While the investment climate remains relatively poor, Africa was the most improved region actually recorded the largest number of regulatory reforms (75 of 230 worldwide) to improve business environments in 2014 (Doing Business 2015, World Bank). Progress in the diversification of economies was positive, and innovation based on mobile phone technologies (money transfers, health, agricultural information and insurance, etc.) were important in contributing to growth. Although the price of oil dropped substantially, the overall impact of this drop did not impact growth rates significantly—though this may not be the case in 2015 for oil-dependent economies.
Despite high rates of growth, the benefits of this growth were concentrated on the wealthy. The growth was not inclusive, especially when it came to lowering overall unemployment and youth unemployment rates specifically (an issue discussed in Foresight Africa 2014). Furthermore, although there were positive developments in economic diversification, the most important sector—agriculture—did not experience the transformation necessary for increased productivity. Thus, economic growth in 2014 had the effect of exacerbating inequality and increased unemployment.
Of note also is that five African countries—Nigeria, Kenya, Zambia, Uganda and Tanzania—rebased their GDPs, revealing that their economies are 89 percent, 25 percent, 25 percent, 13 percent and 32 percent larger (respectively) than previously estimated. In fact, with this rebasing, Nigeria became the largest economy on the continent.
Deepening Trade and Investment with the United States and Other Global Powers
During the year, Africa continued to deepen trade and investment relationships with major global players—though the benefits vary. In 2014, the United States signed a Trade and Investment Framework Agreement (TIFA) with the Economic Community of West African States (ECOWAS). This TIFA will provide a mechanism for expanding trade (valued at $23.3 billion in 2013) and investment between the United States and the 15 ECOWAS member states. The European Union entered into new reciprocal trade arrangements with African countries—the Economic Partnership Agreements (EPA)—that provide African countries with duty-free access to European markets. While this development has potential to truly benefit these countries, there are real concerns that the EPAs could detract from intra-African trade and integration, and, in turn, associate with large losses to African countries.
Sub-Saharan Africa also made significant headway in trade and investment with emerging markets, especially with China. In May 2014, Chinese Premier Li Keqiang spent eight days on the continent, visiting Ethiopia, Nigeria, Angola and Kenya with the primary objective of bolstering economic ties with the continent. The trip resulted in numerous trade, energy, investment and development agreements and ended on a high note in Nairobi, where Li signed a deal with Kenyan President Uhuru Kenyatta and other East African leaders to construct a $3.6 billion, 380-mile railway line linking Nairobi to the important Kenyan port of Mombasa. This link will be a part of a regional railway system that will eventually extend through Rwanda, Uganda, Burundi and South Sudan.
The U.S.-Africa Leaders Summit
Among the notable events impacting Africa’s development in 2014 was the U.S.-Africa Leaders Summit that was convened in August by President Obama. The 2014 summit has the potential to herald a new era of U.S.-Africa relations where Africa occupies a more prominent position in U.S. foreign policy. In fact, the focus of the summit was not the traditional donor-recipient relationship but one based on mutualism. Thus, in addition to tangible investment commitments, the summit had the effect of redefining the U.S.-Africa relationship.
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The summit brought together 45 African heads of state as well as business executives and civil society leaders. In addition to direct discussions between President Obama and African leaders, the summit also featured a business forum to promote ties between African and American executives, as well as a youth forum. Overall, the summit was significant not only because it was the first such summit where an American president met with African leaders, but also because concrete commitments were made to advance Africa’s development and also increase U.S.-Africa commercial ties. Specifically, over $14 billion in new deals between U.S. companies and African governments (in the renewable energy, aviation, banking and construction sectors) were announced at the U.S.-Africa Business Forum.
In 2014, the various regional economic communities (RECs) continued to make progress in the advancement of regional integration. Though the pace of progress varied across the RECs, there was a general positive progress in removing barriers to trade in goods and services and also in the movement of people. Negotiations on the COMESA-EAC-SADC Tripartite Free Trade Area (FTA) are ongoing, and the FTA is expected to be launched at the 3rd Tripartite Summit of Heads of State and Government in Cairo, which has been postponed from mid-December 2014 to February 2015. In addition, member states focused increasingly on regional infrastructure to advance the regional integration agenda. In the East African Community for example, there were heightened discussions on monetary integration. Thus, although the pace of integration could be higher, the trajectory was positive in 2014.
Ebola Outbreak in West Africa
The Ebola outbreak in West Africa, which began in a remote Guinean village in December 2013, is probably the single most significant issue that impacted the course of Africa’s development in 2014. The spread of the disease in West African countries—specifically Guinea, Liberia and Sierra Leone—led to a total number of confirmed, probable and suspected cases of Ebola of 19,695, with 7,963 deaths in these countries (as of December 29, 2014). In the United States and Mali, where there has been localized transmission, there have been 12 total cases and seven deaths, while in the previously affected countries of Nigeria, Senegal and Spain there have been 22 cases and eight deaths.
In addition to the tragic number of lives lost, the Ebola outbreak had a devastating effect on the economies of the affected countries. Countries such as Liberia that have been among the fastest-growing economies on the continent saw their growth drastically reduce from 5.9 to 2.2 percent. The outbreak also strained the health systems in the affected countries, exacerbating their already fragile human development. While the outbreak was limited to the few countries in West Africa, the spillover effects were felt throughout the continent and beyond. Reduced movements of people across national boundaries and flight bans to the rest of the continent also affected trade and tourism across sub-Saharan Africa. Attention to Ebola damaged the image of Africa in the eyes of people around the world and overshadowed recent accomplishments, such as the U.S.-Africa Leaders Forum. In addition, unfortunately, the long-term consequences on investment and economic growth look rather bleak.
Initially, the response to the Ebola crisis was slow and uncoordinated. However, as the crisis unfolded, many governments, multilateral organizations, civil society organizations and private sector intervened. Thus, by the end of the year, there were signs that the combined effort of the various organizations was bearing fruit leading to a slowdown in the spread of infections. The continent took a while to respond, but is now successfully rallying to end the crisis.
Terror Attacks in West and East Africa
The rise in terrorism incidences in Nigeria and in East Africa, especially in Kenya, has also hurt development on the continent. In addition to the direct security challenges and humanitarian losses, terrorism undermines economic growth and slows the delivery of services. Investors are wary of countries with high risks of violence.
In Nigeria, the radical Islamist group Boko Haram increased its violent attacks on innocent populations. In April, members of Boko Haram abducted over 200 girls from Chibok, Nigeria—they still have not been found. Despite the Nigerian government’s assertion that Boko Haram agreed to a cease-fire on October 17 and would soon release the kidnapped schoolgirls, at least 25 more girls in northeastern Nigeria were kidnapped the following week. There has since been no update from the Nigerian government on the girls’ expected release. Boko Haram continued with its terror activities through the year—killing and displacing innocent people, and disrupting economic activities. This year might not be much different: We’re only a few weeks into 2015 and Boko Haram’s terror activities have intensified.
In East Africa, the terrorist group al-Shabab continued to target African peacekeepers and related civilian personnel in Somalia as well as civilians in Kenya—especially in the coastal and northeastern region of the country. However, the African Union-led peacekeeping made substantial progress in stabilizing Somalia.
Conflict and Political Instability
Similarly, while generally conflict on the continent has been declining both in terms of intensity and duration, a number of countries—especially the Central African Republic, South Sudan, the Democratic Republic of the Congo (DRC), Burkina Faso and the Gambia—experienced violent conflict or, at the very least, political instability. Although these cases appear isolated, the spillover effects of conflict and political instability in one country impacts neighboring countries also and thus have some multiplier effects.
In the Central African Republic, the violence, which began in late 2012, continued between ex- Séléka and anti-balaka forces, despite multiple attempts at cease-fires and the presence of African, French and (as of September) United Nations peacekeepers. While disarmament processes were underway across the country, the security situation remained volatile, with recurrent intercommunal attacks. Elections that were scheduled for February 2015 have been postponed until August amid ongoing security concerns.
On-and-off peace negotiations in South Sudan made little progress in stemming the conflict between government forces loyal to President Salva Kiir and rebels led by the former Vice President Riek Machar that has been ongoing since 2013. Recent reports indicate that the fighting might escalate again when the rainy season ends if the two parties fail to reach a timely negotiated settlement.
Security in the Democratic Republic of the Congo (DRC) remained fraught in the eastern regions of the country where rebel groups continued assaults on civilians. U.N. and Congolese forces were preparing to launch an offensive against the Democratic Forces for the Liberation of Rwanda (FDLR) rebel-group in the eastern DRC, which could prompt mass displacement of civilians and potentially a humanitarian emergency.
President Blaise Compaoré of Burkina Faso was ousted after almost 30 years of rule due to his attempt to prolong his stay in power by amending constitutional term limits. Since his overthrow, the military briefly held onto power before returning the country to a civilian interim government. This demonstration of public outrage, which compelled Compaoré to leave office, could deter other African leaders from trying to extend their rule by altering or defying constitutional limits.
In the Gambia, a small group of conspirators, including two U.S. citizens of Gambian origin, attempted to overthrow the government by attacking President Yahya Jammeh in his residence. The coup failed as the president’s security personnel repelled the assailants; however, the president has sent soldiers to uncover additional details of the plot in a display of intimidation that is worrying some human rights experts.
Despite these pockets of instability, good governance in Africa increased in 2014, though minimally: The Mo Ibrahim Foundation’s African Governance Index highlighted incremental improvement in good governance. The 2014 Ibrahim Index on African Governance revealed that continent-wide governance performance increased by just 0.9 percent over the past five years, representing a slight decrease from the previous five years’ (2005-2009) growth of 1.2 percent.
Thus, Africa in 2014 saw both wins and losses, tragedies and successes, triumphs and failures. We enter the new year, though, with lessons learned from these events. Africa will continue to build upon the new trade and investment brought to the continent. It will translate its regional integration and African approaches into movements for halting security threats, supporting its violence- and disease-afflicted neighbors, and creating a climate for social, human and economic development for all.