The discourse on postcolonial development is rich in lamentations on what went developmentally wrong in Africa, but is weak on what needs to be done differently to reclaim development policy-space. State Watch-Afrika, a digital platform for dissecting the political economy of Africa, positions itself as a refreshing departure from the orthodoxy. The initiative draws inspiration from heterodox institutional analysis. It draws inspiration from the primacy of economic nationalism over premature economic liberalism. It is also inspired by the changing but not ending role of developmental state elites even in the current age of disruptive digital technologies. In these respects, State Watch-Afrika is manifestly non-conventional.

Accordingly, the initiative seeks a structural shift from business-as-usual to a new dispensation of business-unusual. This implies subjecting to scrutiny all received wisdom and retaining only those lessons of good practice that pass the test of transformative development. The task involves resurrecting the central ideology of effective late-development, namely, structural transformation by defiance, not compliance!

The significance of this is simple but not obvious. No country has ever attained developed nation-status via compliance with the economic ideology of advanced countries. The USA, which attained industrialization after Britain, succeeded by defying David Ricardo’s comparative advantage which would have condemned the then agrarian America to perpetual backwardness. German and France, which came after Britain and USA, succeeded via defiance of free-market fundamentalism. Their rallying cry was that free market capitalism is Janus-faced. It is simultaneously beneficial to high-tech manufacturers and detrimental to agrarian economies. Japan, the little Asian tigers of Singapore, Korea, Taiwan and Hong Kong; and later, the Big Tiger, China have all attained industrial transformation via defiance of, not compliance with, the pro-market development orthodoxy.

By contrast, African economies, many of which started off their postcolonial journey with state-guided industrial policies, were cajoled out of the supposedly “efficiency-stifling” import substitution policies. In the place of these “bad” policies, African countries were coaxed into institutionalizing the pro-market “structural” adjustment programs of the IMF-World Bank fraternity.

Africa’s compliance with “prudent” economic policies arguably yielded substantial development dividends. In the official narrative, Africa is no longer the epitome of developmental pessimism. The continent supposedly transitioned from the Afro-pessimism of the 1970s and graduated into a new era of Afro-optimism, particularly after the extended “commodity-driven” growth of the 1990s and beyond. In October 2019, the IMF classified Africa as home to the world’s five fastest growing economies. Ghana, the world’s fastest expanding economy, grew at 8.79% in 2019, followed by South Sudan (8.78%), Rwanda (7.8%), Ethiopia (7.7%) and Côte d’Ivoire (7.4%). [Outside Africa, the fastest growing economy was Bangladesh at 7.28%, followed by India at 7.25%]. In a comparable celebratory mode, the World Economic Forum announced in August 2019 that: “Six of the world’s 10 fastest-growing economies are in Africa.”

The Africa-is-rising hypothesis is upheld by the African Development Bank. In its Africa Economic Outlook 2020, the Bank notes that “Africa’s economic growth has stabilized at 3.4 percent in 2019 and is expected to pick up to 3.9 percent in 2020 and 4.1 percent in 2021” (AfDB, 2020).

But this was in the pre-COVID-19 era. The novel coronavirus (SARS-CoV-2) and the disease it causes codenamed COVID-19, are costing Africa between $37 and $79 billion in estimated output losses in 2020. Economic growth is expected to contract from 3.4% in 2019 to between -2.1 and -5.1% in 2020. This will be Africa’s first recession in 25 years.

Even without COVID-19, we contend, Africa had five structural problems. First is the problem of substantial infrastructural deficits. With the exception of South Africa, Ethiopia and a few other countries, African economies still lack the modern roads/broad highways, the railways and waterways, the development banks, and other developmentalist infrastructure that were necessary preconditions for industrial transformation among the early industrializers (Britain and USA); the late industrializers (Germany, France, Japan); the catch-up industrializers ( such as South Korea and Taiwan) and today’s vibrant Asian Tiger (China).

Second, over 65% of Africans are trapped in the low productivity economic activities. The fertilizer-deficient peasant agriculture is the “backbone” – fragile as it is – of African economies. The informal care economy trumps modern healthcare systems. The informal sector employs most unskilled and semi-skilled women and men, and thousands of university graduates who cannot find a formal sector job. This informalization of wealth creation is not just a recipe for low productivity. It is antithetical to the logic of structural socio-economic transformation.

The third problem is that no structural economic transformation has taken place in Africa. Data on the sectoral distribution of gross domestic product (GDP) shows that Africa’s economies are still dominated by agriculture. Where agriculture has lost its preeminence, it has mainly been replaced by cosmetic value-addition. This has taken the form of mineral beneficiation without industrial manufacturing; the processing of fruits and vegetables; the mixing of imported chemicals with local water to produce home-made pharmaceutical products; and last-stage assembling of imported manufactures (such as roofing materials).

In short, high value-added manufactures that are vertically integrated with the domestic economy are still in short shift.
The absence of structural economic transformation underscores one key point. The decades of “impressive” growth in Africa have been decades of commodity-driven growth. They have been decades of Ricardian growth. Rapid growth has been attained via the extraction (and export) of god-given endowments (such as diamonds in Botswana; oil in Angola and Nigeria; and agricultural products in Uganda). With a few notable exceptions (particularly South Africa, Ethiopia and Mauritius), structural economic transformation – proxied by the share of manufacturing value-added in GDP – has hardly gained traction.

Admittedly, the services sector has been characterized by rapid expansion of modern telecommunications and e-banking. However, the services sector is still dominated by backward/low value-added services. Tourism (which has succumbed to the COVID-induced collapse of the airlines industry); hospitality services (proxied by bars, hotels and restaurants); prostitution; and gambling still dominate Africa’s services sector space. This anomaly, together with the limited share of digitalized services, underscores Africa’s deficiencies in structural transformation.

Fourth, the leading apostles of the Africa-is-growing hypothesis are conspicuously silent on the low inclusivity of African growth along social and gender lines. Inequality (estimated using the Gini index) is worrying along both gender and class lines. In Uganda, for example, the economy has grown at a rapid rate of 6.5% between 1992 and 2012, and at roughly 4.1% in 2012-2015, declining to 3.7 in 2017. Over the same period, poverty declined from 56% (1992) to 19.7% in 2015, and rose again to 21% in 2017. However, disaggregated data shows that Uganda’s growth has been characterized by substantial inequalities (regionally, socially and along gender lines). For example, women (who are trapped in the low paying informal economy) constitute over 80% of informal sector workers.

It follows, therefore, that a transformative agenda for African development must address the glaring infrastructural deficits and embark on the skilling of human capital. Human capital development not only requires substantial investments in STEM (science, technology, engineering and mathematics) disciplines. It calls for a radical boost in 21st century skills, namely, artificial intelligence, robotics engineering, data science, and the internet of things.
Transformative development also calls for a structural shift of Africa’s citizens from low productivity economic activities to more rewarding activities (of an increasingly digitalized economy).

It calls for a shift from Ricardian economic activities to high value-added industrial manufacturing. To the extent that good development is for people, not just beautiful economic statistics, then, transformative development in Africa must deliver inclusivity socially, regionally and along gender lines. The aim is to ensure that No One is Left Behind, as the global consensus on Sustainable Development Goals (SDGs) provides.

Transformative development will hardly gain traction without a radical rethink of the leadership question in Africa. The problem is simultaneously political and bureaucratic. In the political realm, Africa must address the oversupply of unaccountable, even authoritarian rulers, and the undersupply of transformative leaders. Predatory state elites who perpetuate patronage politics must give way to developmentalist elites whose mission is transformative development.
At the level of the bureaucracy (defined as the technocrats who control government ministries, departments and agencies), Africa must immunize itself against the elites who captured the powerful ministries of finance, the central banks and elite decision-making authorities in the era of SAPs.

Excelling in “prudent” (read “conservative”) economic governance and foreign investment promotion, these elites were captured by the IMF/World Bank fraternity. Yet, they remained aloof to the transformative developmental
needs of the national economy. The IMF/World Bank elites succeeded in entrenching orthodox policies and institution in Africa because of the presence of local ideological allies. By lubricating orthodox agendas in pre-industrial Africa over the transformative development needs, the bureaucratic elites forged alliances of betrayal against our people, our economy and our values.

What Africa needs is a systematic replacement of these agents of foreign interests with economic nationalists. This will involve reclaiming the state in Africa for African development. Such a state must not displace the private sector. Rather, it must reactivate the ideology of economic nationalism as an antidote to premature liberalism. The state must resurrect developmentalist institutions. It must also coordinate public resources and private sector capacities. The aim is to deliver durable transformative development. The task is big but not impossible.