Vijay Eswaran on the African Resurgence: A Continent Steps Out of the Shadows

For decades, the narrative around Africa has been one of conflict and instability. Images of war, poverty, and dependence on foreign aid dominated the discourse.

But as Vijay Eswaran, founder and executive chairman of QI Group, noted, a quiet revolution is underway, rewriting the script for the continent. A new breed of African economies is surging forward, challenging the established order and demanding a fresh look at Africa’s potential, Eswaran said.

In a piece for The Geopolitics news site, Vijay Eswaran outlined changes the various countries within the continent have gone through and reiterated that the adages about Africa, once dominated by the above, are no longer actually true.

Asia to Africa

Eswaran notes early on in his piece, and rightly so, how the previous decade had a strong contingent of Far East and Central Asian countries that seemed poised to make economic headway, either via natural resources or manufacturing.

He wrote: “As we look at today’s projected fastest-growing economies, one fact remains true: Even after all these years, it’s clear that advanced economies are not the ones driving global growth. And while African economies have been historically portrayed as volatile, recent reports from the [International Monetary Fund] and other economic think tanks demonstrate that the region is set to shift these stereotypes for good.”

Resource-rich countries like South Sudan and Mongolia have long topped the IMF list. Today, the landscape has undergone a dramatic shift. The 2024 list features familiar names like Vietnam and the Philippines, but the spotlight has undeniably shifted toward a new set of underdogs — a significant contingent from Africa, according to Eswaran.

As with most change, it isn’t complete all at once. Eswaran pointed out that some Asian countries, such as Vietnam and the Philippines, have “retained their position on International Monetary Funds’ fastest growing [gross domestic product] list.

“There’s Guyana and Palua and then a large contingent from Africa: Niger, Senegal, Rwanda, [Ivory Coast], Burkina Faso, Gambia, Ethiopia, and Tanzania,” he wrote for The Geopolitics.

Eswaran makes an exception for Macao — a special administrative region of China — which he describes as “the primary destination for the Chinese masses to indulge in their favorite pastime: gambling” as an outlier among those African nations, but save for that, he illustrates how Africa is outpacing other emerging geographies economically.

“While the rest of the world is basically coming to a standstill, if not stumbling or stuttering, Africa is showing its true potential,” he stated.

Engines for Growth and Conflict

Vijay Eswaran said the recent economic progress the countries above have made is due to several reasons, but he specified the region’s recent mobile phone penetration (and the related connectivity that comes with it) as well as a “booming creative and digital services industry filled with inspired young Africans” who are at the “forefront of the digital revolution.”

Eswaran also highlights that several of those countries are still economically viable because of their natural resources and the mining for minerals associated with that. Still, the real movement on the needle comes from the region’s embrace of the digital economy, which is less concentrated at the top (as almost all economies predicated on natural resources harvesting are) and more likely to provide stable and long-term economic success.

Many of the economic, political, and social issues various African nations face are a direct result of economies based on resource extraction by former colonial powers and their associated business interests.

And while Eswaran is touting the economic success of these countries, he also noted that there are a lot of hurdles to overcome.

“While it’s quite fascinating to note these promising projections for African nations, we must also consider the various geopolitical challenges they have been faced with such as internal coups and rivalries,” Vijay Eswaran wrote. “There is also the matter of crippling debt that has caused Niger to miss several loan interest payments, put Ethiopia in default, and Ghana in debt restructuring mode — scenarios that seemingly contradict these growth projections and may hamper their economic progress.”

And here is where Eswaran really hit on the complexity of the issue. While mobile phone penetration, along with infrastructure projects such as the Chinese-built Belt and Road Initiative, contribute to economic movement, it isn’t always “progress.”

Eswaran pointed out that the BRI project, for example, comes with very high interest rates for repayment. Western countries have a long history of playing economic games in Africa, often assisting in various projects with funding that comes with a lot of strings. China, which has emerged — along with the United States — as a 21st-century economic leader, is no different.

The IMF states that many countries in sub-Saharan Africa will need to make serious adjustments to their debt loads in order to remain economically viable — as much as 2% to 3% of their GDP, according to a September 2023 study on the topic.

In 2014, the time frame that Eswaran began his analysis with, the interest rate payment to revenue ratio in sub-Saharan Africa had been steady at around 5% for the previous seven years.

By 2020, that rate had more than doubled, crossing 10%, making it difficult for those economies to service their debt. Many countries, having accrued debt their lenders know they won’t be able to pay off, then institute austerity measures. Those measures often affect those who need the services (schools, libraries, welfare benefits) the most.

The Politics of Growth

While African nations certainly aren’t the only countries with corruption issues, their somewhat precarious economic positions make them ripe for opportunistic politicians and businesspeople to game the system.

Eswaran wrote that Ghana’s debt restructuring, while difficult, could provide economic tailwinds moving forward. But he also said that many other countries in the region may be their own worst enemies when it comes to sustained economic growth.

“Other countries that are leading this resurgence may be toppled from their positions if the lack of professionalism required for a government and its economy to stay in shape persists,” he wrote.

Eswaran said that a beacon for this sort of leadership in government could be important, the way Nelson Mandela of South Africa or Rwanda’s Paul Kagame were, galvanizing a continent.

“Good leadership will determine whether success is short-lived or long-standing,” he wrote.

Either way, according to Vijay Eswaran, the potential for sustained economic growth is there, if those countries and those they do business with will allow it to happen.

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