Tanzania

Autocracy and Democracy in Africa: China’s Influence

Posted on

This article first appeared in my weekly column in the Business Daily on December 10, 2017

I’ve been thinking about China’s growing influence in Africa, and whether it is linked to growing autocracy on the continent, especially the East Africa region. However, it is not China alone that seems to be informing a move towards authoritarianism in the region. When Africa is given examples of countries that managed to catch up economically, the Asian bloc is often presented as the case study. Look at Singapore, Vietnam, China, Malaysia, Japan and South Korea, we’re told, they all managed to pull millions of out poverty and substantially improve the quality of life of their citizens in a relatively short period of time. What is not mentioned is that, for the most part, these countries were developed or are still developing under an autocratic state-led capitalism model where government drives and leads the articulation of capitalism and, to a greater or lesser extent, monitors and guides its evolution.

Related image

(source: www4.pictures.zimbio.com/gi/Beijing+Municipal+Congress+Communist+Party+AYzoNUVRU8Al.jpg)

Africa is also not told that even Europe and North America made significant economic gains using models that were not democratic. The USA relied on the slave trade and slave labour to build wealth that was then used to drive industrialisation. Much of Europe relied not only on financial involvement in the slave trade to amass wealth, but also colonialism which played an important role in providing colonial powers with land and labour that generated immense profits that were then repatriated to European metropoles.  So some are asking: Why is Africa being told that the continent must develop under a democracy when so many others haven’t? And is this the most efficient path towards economic development?

In East Africa, we can see a move towards autocracy; indeed it can be argued that Kenya is the only viable democracy left. Ethiopia and Rwanda have made no secret of the fact that they are essentially autocratic states. Uganda has been under the hand of Museveni for well over 30 years and in Burundi President Nkurunziza seems bent on retaining control and extending his autocratic rule beyond constitutional provisions. In Tanzania, signs of autocracy are emerging given that the chief whip of the opposition party was shot, and President Magafuli shut down several newspapers.

China has been making aggressive inroads in Africa with mega project deals. FILE PHOTO | NMG

(source: http://www.businessdailyafrica.com/image/view/-/4222430/medRes/1832547/-/maxw/960/-/g7bbas/-/china.jpg)

Beyond philosophical questions as to why there seems to be growing autocracy in the region, international dynamics are also playing a role, specifically growing insularity in Europe and North America. The Trump Administration hasn’t even bothered to table a strategy for Africa and Europe seems preoccupied with Brexit, anti-immigration sentiment, and calls to use European money on Europe rather than on ‘others’. As a result, the voice from the global north that lectures Africa on the merits of democracy is receding and the power vacuum is intensifying the influence of autocratic China in Africa. Indeed, the autocracy that is emerging in Africa seems to be modelled more against the technocratic autocracies of Asia rather than the old African autocratic model exemplified by leaders such as Idi Amin, Mobutu, Mengistu and more recently, Mugabe.

It seems it is time for Africa to ask itself some tough questions: Should growing autocracy be encouraged? And if so, what will it cost Africans in terms of freedom of expression, human rights and political freedom? Or is democracy, despite all its problems, still the best way forward for the continent?

Anzetse Were is a development economist; anzetsew@gmail.com

Advertisements

Podcast: China and the rise of Africa’s new autocrats

Posted on

On December 3, 2017 I featured on the China Africa Project Podcast with Eric Olander and Cobus van Staden where we discussed growing authoritarianism, in East Africa in particular, and the role of China in challenging the notion that democracy is the best governance model for Africa.

 

 

Growing autocracy in the East Africa Region: Implications for China

Posted on

This article first appeared in ChinaFile on November 28, 2017

Though not in the headlines, China is operating in an East African region that is becoming increasingly autocratic and authoritarian. The East Africa region in this article refers to the countries of Kenya, Uganda, Tanzania, Rwanda, Burundi and Ethiopia. It can be argued that in the region, Kenya is the only viable democracy left.

President Kagame of Rwanda has made headlines in the region for what appears to be the open targeting of Diane Rwigara who tried to run against him in elections earlier this year. Ethiopia has been ruled by the same party since 1991, with marked intolerance of opposition, evidenced in the imprisonment of political dissidents. Uganda has been under the hand of Museveni for well over 30 years and in Burundi the International Federation for Human Rights claims the crisis there has left at least 1,200 dead and 10,000 imprisoned for political reasons. In Tanzania, the chief whip of the opposition party was shot, opposition figures have disappeared, and in September, President Magafuli closed a third newspaper since June as part of a media crackdown.

Image result for Eastern Africa

(source: https://elimufeynman.s3.amazonaws.com/media/resources/kenya-img1.jpg)

The trend towards autocracy and authoritarianism in the region cannot be ignored and will have several implications for China. The first is that while it could be argued that it is easier for China to work with governments that do not have to deal with the complications of a robust democracy, there is growing unrest in domicile populations in the region. And although authoritarian East African governments may assure China and the Chinese private sector, that unrest is being ‘managed’, the reality is that it can grow to unmanageable levels, compromising Chinese investments. The Chinese private sector is already feeling the pinch where both last year and this year, protesters in Ethiopia destroyed Chinese factories and assets in anti-government protests.

The second concern China should have is that it is the very authoritarianism in the region that may make countries more difficult to deal with because decisions can be made unilaterally with no consultation or explanation given. It is possible that such decisions could negatively affect Chinese interests in the region and given the strong arm of government in most of the region, trying to seek redress through legal means would likely be futile. Further, China has branded itself through its non-interference policy. Will this position change if the action of authoritarian governments threaten Chinese investments in the region?

Image result for autocracy

(source: img.bhs4.com/34/f/34f19c14318e7c049b8e60d2c327d6d9c16627c6_large.jpg)

Finally, Zimbabwe provides an important lesson for China. China put all of its eggs in the basket of Mugabe’s autocratic rule. With Mugabe no longer in rule, there is surely concern as to how China will protect its investments and economic position in the country. And this is the fundamental problem with China continuing to interact with openly authoritarian governments; China can never be sure that the next ruler will treat them as well as his predecessor did. Will China be prioritised in Zimbabwe as other economically powerful countries and companies jostle to enter the country?

It will be interesting and see how both the Chinese government and private sector continue to operate in a region of growing autocracy and authoritarianism both of which pose considerable risks to China’s investments in the region.

Anzetse Were is a development economist; anzetsew@gmail.com

Dynamics in Manufacturing in East Africa

Posted on

This article first appeared in my weekly column with the Business Daily on September 4, 2016

Last week I attended and presented at a roundtable on Manufacturing in Kenya hosted by the Overseas Development Institute (ODI). The roundtable was under ODI’s Supporting Economic Transformation Programme (SET) which is supported by DFID. As part of the roundtable I developed a paper on manufacturing in Kenya and thought it would be useful to share some insights I unearthed during my research on manufacturing in the East Africa region.

At the moment, the manufacturing sector in Kenya is the largest in the East Africa region. However in terms of growth, other countries in East Africa are growing at a faster rate. Data from ODI indicate that the growth of the manufacturing sector in Kenya is growing far slower than Ethiopia, Rwanda, Tanzania and Uganda. If this trend continues, other East African countries will begin to dominate manufacturing in the region. Further, governments in East Africa seem to be putting in more pronounced effort to build manufacturing through the creation of industrial parks in countries such as Ethiopia and making land available for manufacturing particularly for labour intensive manufacturing. Uganda and Tanzania are also determinedly positioning themselves as investment destinations for manufacturing in Africa. This impetus needs to be more strongly echoed in Kenya from the highest levels of county and national government.  Further, while Kenya remains an attractive investment destination for manufacturing, other countries in the region are aggressively courting such investment. And frankly there is a growing sense that the bureaucracy and corruption in Kenya as well as difficulty in getting the right information on requirements linked to building manufacturing plants in the country are hampering investment into the sector.

https://images.enca.com/encadrupal/styles/600_383/s3/WEB_PHOTO_AFRICA_CLOTHING_26082015.jpg (source: https://images.enca.com/encadrupal/styles/600_383/s3/WEB_PHOTO_AFRICA_CLOTHING_26082015.jpg)

That said, the good news from a regional perspective is that the East African Community (EAC) is seeking to position itself as the next global manufacturing destination. This is positive and long overdue because clearly there is room for growth in the sector in the region. According to the African Development Bank the combined manufacturing sector of seven countries in Eastern Africa as a whole is only about one-third the size of the manufacturing sector in Vietnam, which has a population one-third the size of the seven countries. If the East Africa region is to become the ‘go-to’ location for investment in manufacturing in Africa, more coordination of manufacturing policy and activity across the EAC as well as with Eastern African countries outside the EAC is needed.

However, from a Kenyan perspective there are issues within the East Africa region that negatively inform the growth of manufacturing in the country. An on-going issue that adversely affects the uptake of manufactured products from Kenya in the region is pricing. Cost of production in Kenya remains high which makes the end price point of Kenyan manufactured goods high. This cost of production issue essentially promotes the purchase of cheap manufactured imports from India and China that have aggressively entered the regional market and routinely undercut Kenyan manufactured equivalents on price point.

https://i0.wp.com/tinypitch.blob.core.windows.net/tpdata/iV5cJFV3EekeC1mUy9ZgQ/7aOtGsiJU0qlKHujMnvw.jpg(source: http://tinypitch.blob.core.windows.net/tpdata/iV5cJFV3EekeC1mUy9ZgQ/7aOtGsiJU0qlKHujMnvw.jpg)

Another dynamic affecting the growth of Kenyan manufacturing in the region is related to the competition emerging between manufacturing sectors in East Africa. Due to development of manufacturing in neighbouring countries a scenario is emerging where neighbouring countries seem to want to reserve domestic markets for domestically manufactured products. Thus there is a sense that neighbouring countries in the EAC seek to prevent Kenyan manufactured goods from entering their countries because they want to keep domestic markets to themselves. Thus, perhaps EAC markets are not as open as one would hope.

What is clear is that it that challenges exist for the Kenyan manufacturing sector from a regional perspective. At the same time, there is ample opportunity for the region to sell itself as the manufacturing hub of Africa. The question is how to balance national ambitions with regional development goals; perhaps it is time for a candid conversation on this issue.

Anzetse Were is a development economist; anzetsew@gmail.com

Manufacturing in Africa is growing faster than assumed

Posted on Updated on

This article first appeared in my weekly column with the Business Daily on May 1, 2016


Last week the Overseas Development Institute (ODI) published an interesting paper on export-based manufacturing potential in Sub-Saharan Africa (SSA). The report states that contrary to the common view, production, employment, trade and foreign direct investment in the manufacturing sectors has actually increased over the past decade in SSA. Between 2005 and 2014, manufacturing production more than doubled from $73 billion to $157 billion, growing 3.5% annually in real terms; some are higher with Uganda’s manufacturing growing by 5% over 2010-2014, Zambia’s by 6% over 2008-2012; and Tanzania’s by more than 7% in the last decade. Further, SSA countries are increasingly exporting manufactures to each other (20% of total trade in 2005, 34% in 2014), and a great deal of FDI into manufacturing is among and between African countries.

The report states that there are exceptional manufacturing opportunities in garments and textiles, agro-processing and horticulture, automobiles and consumer goods. However, the share of manufacturing in total employment fell from 10% in 1991 to 8.5% in 2013. This is important to note because although manufacturing is growing, the employment creation ability of the sector seems more muted than it used to be. Perhaps factors such as the growing role of technology in manufacturing is important and may reflect the gradual technological deepening in African manufacturing exports over the past decade.

https://i0.wp.com/www.fashionatingworld.com/images/Textile-industry-Africa.jpg

(source: http://www.fashionatingworld.com/images/Textile-industry-Africa.jpg)

The report is very sober in noting the reality that Africa’s (all Africa, not just SSA) share in total world manufacturing exports remains less than 1%, and this has fallen marginally since 2010. Yet the good news is that between 2005 and 2014 exports from Africa as a whole (not just SSA) grew at an average annual rate of 10% or higher in the product groups analysed.

In terms of insights on Kenya, Kenya’s share of manufacturing exports is higher than that of Ethiopia and Rwanda. Further, the intra-African trade share in Kenya was high at 67.5 percent in 2013. But, as the report notes, this figure ought to be considered in the reality that the coastal countries with large ports, such as Kenya, facilitate import and export trade in the region pushing trade numbers up. Top manufacture products from Kenya include apparel, clothing and accessories; perfume, cosmetics and cleansers; iron and steel, and inorganic chemicals. However, compared to the peers in the report, Kenya has a lower share of domestic value-added (DVA)  content of gross exports as a share of total exported value added with DVA standing at a lower than average 62 percent. The most promising sectors in manufacturing in Kenya detailed in the report, in terms of revealed comparative advantage, include automatic typewriters and word-processing machines, self-adhesive paper and paperboard, hair-nets, safety pins of iron or steel, carbonates, flat-rolled products of iron or non-alloy steel, and leather.

As ODI’s Dirk Willem te Velde states, industrial development is crucial for human development and leads to wealth creation, economy-wide productivity change, greater incomes, significant job creation and resilience throughout the economy. As a development economist, there are two keen points of interest for me in terms of informally assessing the development potential of manufacturing. First, is the extent to which manufacturing can absorb low skilled labour given that Kenya’s population’s average years of schooling is 6.5 years. The second issue is the employment creation potential of manufacturing. For too long Africa has been seen to support the jobless growth phenomena where the economy is growing but formal job creation is lacklustre.

(source: http://www.greenconduct.com/wp-content/uploads/2013/07/jobless.jpg)

The report provides some insight on these issues by looking at Tanzania. The highest low-skilled employment potential in Tanzania is in agricultural products; this good news given the importance of agriculture to countries such as Kenya and Tanzania. In terms of employment potential, for Tanzania, agriculture comes out on top again. Agricultural products such as high-value vegetables and fruits, processed grains, processed meat, wood products and leather have high employment potential. Thus, the good news is that it is possible for agriculture, a dominant player in African economies, to be best placed to absorb low skilled labour and have high employment potential. This should provide impetus for Kenya to do a similar type of analysis and closely examine the important role agro-processing can have in reaping development dividends for the country. But bear in mind that the issues of high wages is an overall constraint for the sector. Labour costs in SSA are generally higher (when measured relative to GDP per capita) than in low-and middle-income comparator countries in Asia and Latin America.

Anzetse Were is a development economist; email: anzetsew@gmail.com

The race for Regional Hub status in Eastern Africa

Posted on Updated on