In 2013, Africa is likely to maintain its decade-old pace, setting annual average economic growth rate of 5% or more – according to estimates from the World Bank, the International Monetary Fund and the Africa Development Bank.
This strong economic growth will likely extend beyond 2013 as Africa benefits from a natural resource boom, strong internal demand from its rapidly growing middle-class, increased spending on basic infrastructure, robust foreign direct investments, and sizeable diaspora remittances. However, Africa faces major development challenges in 2013, some with game-changing implications.
Tensions remain high in Kenya as two leading presidential candidates – both indicted by the International Criminal Court for alleged complicity in the murderous post-election violence in 2007 – remain strong in national opinion polls, as election officials delay the decision regarding their eligibility to run.
Stakes are also high in Zimbabwe following two bitterly disputed elections in the last decade, crippling international sanctions, and a tenuous unity government of the ruling party and the opposition. Anything short of free and fair elections in Zimbabwe would likely lead to an intense and brutal struggle for power between supporters of President Robert Mugabe and Prime Minister Morgan Tsvangirai.
Instability in Kenya would negatively impact the East African economy, one of the fastest growing hubs in the continent. Likewise, violence in Zimbabwe would destabilise the Southern African region, with millions of refugees potentially streaming into South Africa.
Additionally, democratic governments throughout Africa (with the possible exception of Botswana) will struggle in 2013 due to a combination of massive social and income inequalities and soaring unemployment. In particular, power struggles among the elite, including within ruling political parties, will likely intensify during the next 12 months in Nigeria, South Africa, Ghana, Senegal, South Sudan, Uganda, Egypt and Tunisia.
On December 20, 2012, the United Nations Security Council authorised military intervention in Mali to reclaim northern territories seized last year by Islamist groups.
The conflict in eastern Democratic Republic of Congo also dominated UN Security Council deliberations on Africa last year, and will likely continue until a decisive intervention by the international community.
In West Africa, Guinea-Bissau may degenerate into civil war, fuelled in large part by its alleged role as a major hub for international narcotics trafficking. Similarly, the Boko Haram Islamist insurgency in northern Nigeria will not go away until the central government either wins a decisive military victory or negotiates lasting peace.
The recent rebel insurgency in the Central African Republic may spawn similar movements in other countries, especially where central governments only have nominal control over large swaths of territory. In particular, the Somali government will continue to remain dependent on African Union troops.
Various reports by bilateral and multilateral agencies, Transparency International, and think tanks in both Africa and the West indicate a continent yet to reach tipping point with regards to development-friendly policies.
In particular, the Doing Business Report 2013 from the World Bank indicates ongoing challenges to development policies in Africa. Establishing stable policy regimes and implementing public sector reforms remain long-term objectives throughout the continent. As yet, many African countries do not even have a fiscally and operationally independent judiciary.
Policies favouring business and civil society remain a premium. Small and medium enterprises rarely benefit from fiscal, policy or logistical incentives from the public sector. Industrialisation remains minuscule: the continent accounts for around 1% of worldwide manufacturing despite representing more than 10% of the global population.
Trade with China – largely based around Africa's natural resources – grew from $9 billion in 2000 to $160 billion in 2011, according to the Africa Development Bank, and is thought to have surpassed $200 billion in 2012. Since 2009, China has become Africa's largest trading partner.
At the 2012 Africa-China summit in Beijing, China pledged $20 billion in credits for the next three years, doubling past commitments. However, at the same summit, President Jacob Zuma of South Africa voiced concern about "unsustainable" long-term trade ties with China. African leaders want China to import more goods and services from the continent.
Trade with the Gulf States – focused significantly on access to food and arable land –increased from $10 billion in 2002 to $49 billion in 2011, according to the Standard Chartered Bank and Reuters. But the focus of Gulf States on agriculture may soon run counter to growing concerns about unsustainable "land grabs" in Africa.
Imports between developing countries rose from 35% of all trade in 1995 to 55% in 2010. African exports to other countries from the global South alone grew fourfold, to $114 billion, according to the Africa Development Bank. Fellow global South countries now account for more than 10% of foreign direct investments in Africa.
Thus, African leaders increasingly have viable alternatives regarding foreign economic investments and partnerships. Unsurprisingly, African and Western governments disagree more frequently and openly in regards to governance reforms as precondition for investment.
These disagreements will continue in 2013, especially as Western democracies turn inwards to repair ailing domestic economies.
Africa's middle-classes have rising rates of so-called diseases of affluence or lifestyle –hypertension, stroke, obesity, diabetes, cancer and chronic respiratory diseases. .
In 2011, Africa health ministers declared non-communicable diseases a "significant development challenge" due to associated high morbidity, mortality and economic burdens. With high rates of HIV, tuberculosis, malaria and other communicable health conditions, African health policy makers now contend with a “double health burden”: high rates of both communicable and non-communicable diseases.
Africans also remain at risk of counterfeit medicines in 2013, with thousands facing death or serious illness. The World Health Organization recently indicated that 35% of malaria medicine samples failed chemical analysis and packaging tests in Africa.
Very few African governments have enough technical, fiscal and logistical resources to combat the $46 billion-a-year global counterfeit medicine business.
Access to potable water remains a status symbol despite recent evidence that Africa sits on giant, easily accessible ground water reservoirs.
Remarkably, these giant reservoirs predominate in the dry, arid region of North Africa. More than 300 million Africans will have difficulties accessing potable water in 2013. Many more will lack access to basic sanitation.
According to the 2012 African Economic Outlook, Africans under 30 years of age constitute 70% of the continent's population. At least 60% of the unemployed in Africa are young adults.
Seven of every ten youth in Africa live on less than $2 a day. Nigeria, Ethiopia, Uganda and Zambia have 80% youth poverty levels.
Africa's army of educated and unskilled youth represents a huge unknown risk for the continent in 2013. In 2011, without warning, the youth of North Africa rose against autocratic, militarised governments. No country in Africa is immune from potential youth-inspired political earthquakes in 2013.
At least in the long-term, none of the aforementioned challenges is insurmountable. However, solutions will require policy cohesion and resilience, careful choice of priorities, prudent management of scarce resources, and transparency in public sector operations. They will also require proactive, mutually beneficial engagement with external partners.
The best down payment for Africa’s development in 2013 and beyond is likely to be a strong focus on policies of integration. The African leaders of the future need to prioritise the inclusion of Africa’s youth, who are increasingly outside the mainstream of the political, economic and social life of the continent.
This article was originally published here at allafrica.com.
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