What happens in Africa can largely define the future contours of a radically transformed Mauritian economy in its ambitions of becoming a major regional financial and business hub
In this column we have consistently held the view that what happens in Africa can largely define the future contours of a radically transformed Mauritian economy in its ambitions of becoming a major regional financial and business hub. In fact the premise on which we have been working for nearly a decade now is that nothing could be better for Mauritius than a prosperous Africa. This is why the recent events in three among the most impactful economies of the continent should not leave us indifferent.
The sceptics will of course have a field day pointing out that these changes are not really “regime” changes but merely a change in persons and that soon enough the bad old habits would return to haunt these governments. While it would be rather naïve to ignore this risk, we take the view that what has happened is hugely significant because it signals that there are limits to excesses which will no longer be acceptable. The emergence of a demanding middle class and the expectations of the youth will be the drivers of such regime change as Africa moves forward.
Political upheavals in three key countries of Sub-Saharan Africa over the past months have considerably contributed to further enhance the wave of Afro-optimism which has prevailed since some years now. The existing establishment that dates back to the liberation movements of the 1960s are being confronted with the rising expectations of the new generations – 60% of the population of Africa are less than 30 years old – and the demands for greater democracy and political say in running the affairs of the country coming from a fast growing middle class.
Mired in their past glory but also in increasingly corrupt and self-serving regimes, as evidenced by the recent events in South Africa, Zimbabwe and Angola, the “historic” leaders who clung to the trappings of statehood have generally failed their people’s struggles as they were unable to overcome the most glaring inequities and economic disparities of apartheid and colonialism.
Cyril Ramaphosa who has just been appointed as President of the Republic of South Africa (it may be useful to point out that he was appointed by his party’s executive and no one is speaking of entering by “la fenêtre”) also hails from the African National Congress. He has meanwhile engaged in successfully setting up a huge business empire after having been a prime actor in writing the new Constitution and the transition from apartheid to the new multi-racial democratic framework under the guidance and leadership of Nelson Mandela.
In Angola and Zimbabwe similar more or less abrupt transitions from the former establishment have occurred over the past months. In Zimbabwe, Emmerson Mnangagwa has taken over power from the increasingly senile Robert Mugabe while in Angola Joao Lourenco has succeeded former president Dos Santos. In both cases one could describe the new situation as being characterized by considerably low expectations but potently high hopes. The scepticism is understandable given that both newly appointed heads of State have been actively involved with the erstwhile corrupt and despised regimes.
What is interesting, however, is that in both cases the new leaders have impressed observers by not only ‘talking the talk’ of a new beginning in terms of democracy and of their urgency to redress some of the worst economic blunders of the preceding regimes. They are actually “walking the walk” as demonstrated by the first moves of both Lourenco in Angola and Mnangagwa in Zimbabwe. Whereas everybody thought that he would be a “handy man” for the parting President Dos Santos, Lourenco has surprised his world by taking a series of measures to immediately disentangle the stranglehold that the Dos Santos family had on the major economic players in the country. This translated into the sacking of the daughter of former President Santos, Isabelle, from the state owned companies in the telecoms and oil sectors. To say the least this is a bright start and portent of hope.
On the face of it, the situation in Zimbabwe seems more complicated given the important role played by the new president until only a few months back in the “ancien regime”. There again there are reasons to be hopeful that the events which led him back to power from exile will contribute to the institution of a radical break from the past. The promise of new elections before the end of the year and the posture taken during his inaugural speech are significant pointers of such a break with some of the disastrous economic policies of the recent past.
Whereas until recently this sentiment of African revival was basically perceived as an economic phenomenon, the recent events in South Africa, Zimbabwe and Angola have added a new dimension to the equation. In all of these countries the potential for socio-economic development was clearly constrained by political regimes characterized by kleptocratic leaders. In fact the excesses of the respective leaders and their families in these three countries had become the source of “underdevelopment” as they undermined the social fabric and key institutions needed for sound and fair socio-economic development.
The GDP of the sub-Saharan countries as a whole grew at an average rate of around 6% for nearly a decade since the beginning of this century – a phenomenon never observed since the countries of the region obtained their independence. With the advent of the Great Financial Crisis (2008) and the severe stagnation of demand for raw materials in the developed countries as well as in China, the rising trend of growth was severely halted and reduced to an average of 2,6 %. Interestingly enough, if one excludes the performance of Angola, Nigeria and South Africa, the rate of growth rises to around 4.5% for the rest of the region. Angola and Nigeria have been the direct victims of falling oil prices on the international market during that period whereas South Africa had its own internal problems of governance which severely affected its propensity for economic growth.
According to the IMF and other global institutions, the prospects for global economic growth are looking brighter than ever since the financial crisis. In both Europe and the USA as well as in Japan and the emergent giants – India and China – accelerated economic activity is leading to a steady rise in the demand for raw materials supplied by African nations. The price of oil has also improved over the past year and this should considerably improve the public finances of a country such as Angola. The events in Zimbabwe, Angola and South Africa are therefore happening under mostly favourable global conditions.
The Mauritian government and business community should wake up to these developments and watch out for the opportunities which these create for advancing our socio-economic agenda.
* Published in print edition on 23 February 2018