Africa, phoenix-like, is on the rise

At evening soirees, the rich and powerful delegates at the 23rd World Economic Forum (WEF) meeting in Cape Town gathered to share canapes. Politicians, like President Jacob Zuma and Nigerian's Goodluck Jonathan, were in great demand.

During the day delegates took part in panel discussions. Interactions were polite and optimistic. The consensus was that Africa, phoenix-like, is on the rise. The record number of delegates at this year's conference weren't just excited by Africa's mineral wealth, which represents about 30% of the world's mineral reserves (and more in the case of gold, platinum, manganese and diamonds).

"Africa is actually a consumer story. Prosperity is coming to Africa, thanks to resources and telephony. The resource story is going to be dwarfed. Africans need more of everything," said the founder and group executive of the Abraaj Group and one of five co-chairs for the WEF meeting, Arif Naqvi.

The continent's 1bn population is growing rapidly, becoming more urban and middle class. KPMG estimates that by 2020, 600m Africans will be middle class. The idea of so many consumers buying things is a retailer's dream. It's also a good story for politicians. They're promising that they have what it takes to translate this interest in Africa into prosperity for all, especially the poor.

But it's too simplistic to assume that the population statistics and heightened business interest will automatically make African economies more diverse, create jobs and make good health care and education available to everyone.

The story of oil-rich Equatorial Guinea explains why. Its US$17500 per capita annual GDP is the continent's highest, yet it has the lowest-skilled workforce. Over the past 15 years it's been one of the world's fastest-growing economies. On the human development index (HDI), however, it ranks 91 places below its wealth ranking. No other country registers a wider gap. Countries with a similar wealth ranking, like Hungary and Poland, are 100 places higher on the HDI.

Former UN secretary-general Kofi Annan called for a reality check. "We have to be frank. There'll be strong demand for Africa's resources for another decade. They [governments] can either [continue to] squander this or use it to lift millions out of poverty. Africa isn't short of money," said Annan, who announced that the Africa Progress Panel, which he heads, will put pressure on the G8 summit next month to ensure all companies doing business in Africa are completely transparent about their dealings and taxes they pay on profits.

Annan wants all countries to adopt laws like the Frank Dodd Act in the US, which forces foreign-owned companies to disclose the "ultimate beneficiaries of profit". Annan agrees that this pressure has to be extended to G20 countries, especially emerging-market giants like China which have been promised preferential access to African markets through SA's recent inclusion in Brics.

Chinese delegates at the WEF, however, steered clear of giving any commitment on this score. Kenya's President Uhuru Kenyatta, who has personal business interests in Kenya's media and agriculture sector and is heir to some of the largest land holdings in Kenya, joined the chorus of political leaders who acknowledged that Africa's success hinged on strengthening democracy, accountable government and transparent state spending. Nobody, however, asked Kenyatta about the human rights charges he faces in the International Criminal Court. In fact, his bodyguards, dressed in full military regalia, had a hard time trying to usher Kenyatta around as business people lined up to shake his hand and shove business cards into it.

A relaxed, confident-looking Zuma assured the meeting that African governments were changing for the better. His main message to the meeting was that SA would use its Brics membership to champion Africa. But there were several elephants in the room as he spoke. These included question marks over Zuma's relationship with the Gupta brothers and the degree of influence they have over government. And then there's the R243m of state revenue that was approved for a security upgrade to Zuma's private home.

Zuma's assurances about SA being open for mutually beneficial business deals were in contrast to the WEF's report on education, which ranked SA's maths and science education second-last globally. This goes to the heart of the country's skills shortage, inefficient state spending and paralysis when it comes to taking on trade unions and holding public servants to account for mismanagement, and it dovetailed with the WEF competitiveness report. This flagged SA's low labour productivity compared with wages, its business-unfriendly policies, a poorly educated and unskilled workforce and a state that rewards loyalty to the ruling ANC above performance.

Without a dramatic shift on these indicators, the prediction that Tanzania's Reserve Bank governor Benno Ndulu made about "the geese of manufacturing flying westwards from East Asia" and landing in Africa will remain a dream.

The presence of Swazi King Mswati III, Africa's last absolute monarch, at the conference raised gender activists' eyebrows. Forbes ranks him as one of the world's top-15 richest monarchs. Yet 43% of all Swazis live in chronic poverty. The king can veto parliament's laws, controls most of his country's economy and has shown how he will crack down on any sign of public protest or opposition to him. During a debate on African values, he declared that the Swazi people did not want change. No delegates challenged this. Businessmen from Swaziland clapped for their monarch. The performance hinted at the impunity power brokers in Africa can secure through being bastions of African culture and tradition.

Transparency International vice-chair Akere Muna says anyone who expects change to come from politicians accused of mismanagement is like "expecting fish to vote for a budget to buy hooks". True accountability has to be driven by the citizenry. Former Mozambique president Joaquim Chissano believes that technology coupled to a proliferation of non-government watchdog bodies has already started a power shift away from politicians and is demanding "a new accountability, especially in resource extraction".

But Muna says the real test will be whether this increased awareness on the continent translates into a demand for change. "What worries me is that in many cases we are going towards acceptance," said Muna, who told a story about meeting a friend in a country he didn't want to name. Muna asked who this man would be voting for. The response was: "Ali Baba, because there are only 40 thieves within his clan."

One of Turkey's wealthiest men, Mustafa Koç, who co-chaired the WEF meeting and chairs the board of Koç Holdings, which has bought Defy in SA, says his hope for the continent lies in the fact that "African governments will increasingly have no choice but to follow civil society".

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