Africa's Salvation

The Washington Post ran a story on Africa's growing middle class on Monday that captures forces that look to be transforming the continent:

Although the continent has always had a modest middle class made up mostly of government workers or others tied to the ruling elite, the middle ranks have begun to expand in recent years with private sector employees. They include secretaries, computer gurus, merchants and others who by virtue of education, geography or luck have benefited from economic growth of around 6 percent annually in such countries as Uganda, Ghana and Kenya, and around 8 percent in Rwanda. Increasingly, they are entrepreneurs such as Ruharo, who represents the wealthier end of the spectrum and whose company is an offshoot of the newly booming cellphone industry.

The article unfortunately dwells on the consumer aspect of the growth - that as many as 300 million Africans now buy shoes, and takeout, and DVDs. It seems a bit dismissive, maybe even patronizing ("just like us!" you can almost hear the reporter add).

But the trend that the writer, Stephanie McCrummen, identifies on the producing side is amazing, and could potentially transform the region. Without much notice, many countries in Africa are developing real, vibrant private sectors for the first time in history.

Central planning, protectionism, red tape, and aggressive bureaucratic intervention strangled much of Africa's potential for economic development soon after most of the continent gained independence. Robert Bates, maybe the leading US expert on African politics, has argued that the outsize role of the state probably contributed to state failure and the horrific violence that is most identified with the place.

Income to be made outside of the state has the potential to decrease the relative returns to taking over the government and lower the stakes in leadership struggles. It provides employment and opportunities to groups that would otherwise be shut out of governments controlled by other ethnic or tribal groups. It creates a powerful constituency for stable, helpful government. And, most importantly, it creates wealth far better than aid or governments can, helping to life people out of poverty.

Private sector growth in Africa is not a new idea, nor is it a panacea. And figuring out how to foster it is a lot more difficult than just taking away overly intrusive state controls. But a handful of countries in Africa have figured out a way to give it a kickstart, and it's starting to have an effect. The eventual impact on Africa could be enormous.