In this first of a six-part series, Globe and Mail Africa correspondent Geoffrey York investigates how Africa's growth is changing its future.
In the dusty streets of the tiny village of Romaro, a building boom is under way. Crumbling mud shacks are being replaced by new tin-roofed houses. Almost overnight, the village’s ancient way of life has vanished. Most of its farmland has been swallowed up by a Swiss multinational, Addax Bioenergy, which has leased more than 14,000 hectares of Sierra Leone for a $330-million sugar-cane plantation to produce ethanol for the European market.
Centuries of subsistence farming have been replaced by wage labour as the 200 villagers are propelled into the globalized economy. Most families in Romaro now have at least one person employed by the Swiss company, which pays leases and helps to plow the remaining farmland. The money has allowed the villagers to build 13 new houses.
“We get a wage every month,” says Mohamed Kamara, a security guard at the sugar-cane plantation. “Now, I have job security, and I can get credit from a bank. It’s far better than before.”
It's the unexpected message of today's Africa. Every week, another bank or investment fund is touting it as the next big thing, an emerging lion to follow the Asian tigers. Resource exports are soaring, and growth is climbing to unprecedented heights – second only to Asia, and fast catching up. And for the first time in generations, Africa is receiving more investment than foreign aid.
But people tell a different story just a few kilometres away from Romaro, in Lungi Acre. The 700 villagers there have been boxed in by the Swiss project, their huts surrounded by the vast plantation. Rice and cassava fields were bulldozed, and people were left with so little water and farmland that they say they must buy imported rice in the markets. Just outside the village, a water reservoir is fenced off with razor wire, and guards patrol to chase villagers away from the sugar cane.
“Addax is making the situation much worse,” says Abdullah Serry, an elder. “There’s no water for the little land we have left. We were dependent on those lands for all these years. We depended on them for survival. Now, we rely on Addax for everything.”
The dynamic of the two Sierra Leonean villages is the tale of the new African boom.
As investors and traders pour in, some of the poorest corners of the continent are being transformed. “Tomorrow’s Africa is going to be an economic force,” says a report from Goldman Sachs. KPMG trumpets the Africa story as “the rise of the phoenix.”
Many factors have made this possible. After decades of stagnation, in recent years most African countries began to reform their economies. Wars, coups, political instability and disease have declined since the late 1990s. And rising commodity prices have lured investment in African resources.
Mobile technology is leapfrogging ahead (Africa has become one of the fastest-growing markets for Canadian firm Research in Motion’s BlackBerry) and a new consumer class has been born. Multinational retailers are leaping in, and even Wal-Mart recently acquired a chain with nearly 300 stores in 14 African countries.
The prosperity of China has been a particular spark, with about 2,000 Chinese companies investing $32-billion in Africa by the end of 2010. Beijing’s trade with Africa has soared from $2-billion to an incredible $166-billion in the past dozen years.
But what is the truth behind the hype? The Globe and Mail has spent months investigating the African boom, journeying from Congo and Burkina Faso to Liberia and Botswana, talking to everyone from miners and farmers to factory owners and chief executives.
The rise of Africa is an issue with huge ramifications for Canada, since it could affect how we tailor our foreign aid, how our mining and energy companies choose their next targets and where our manufacturers will find their future markets. Yet the realities are obscured by lingering clichés about Africa and an unwillingness to consider the social costs.
As foreign investment mounts, it often brings with it traumatic social dislocation and a distorted economy. The money often disappears into the pockets of a corrupt elite, while ordinary Africans see fewer benefits. Oil-rich countries such as Nigeria and Angola are the most extreme examples, where billions of dollars in oil revenue have gone into the foreign bank accounts of top officials, leaving most of their citizens poorer than ever.
It does not have to be this way. A few African countries, such as Botswana and Ghana, have carefully managed their resource revenue and transformed themselves into middle-income countries. Botswana has capitalized on its diamond mines by creating a fledgling industry in diamond sorting and processing, and it is increasingly seen as a model for the continent.