Introduction
Obinze has a worried expression as he disembarks from a motor cycle taxi in a crammed street right in the middle of upmarket Lagos in the district of Maitama. Maitama is the embodiment of African opulence and the potential gardening positions he was hoping to obtain had already been filled. A pending six hour journey back into rural Nigeria where electricity is a mere myth explains why his found the Lagos lights blinding. Nigeria is one of the fastest growing African economies but the wealth has not grown equitably; the bane of most high flying African economies. This story illustrates one of the many short comings that come with use of economic growth in its present state.
Economic growth is defined as the percentage increase in a country’s Gross Domestic Product. It appears to be in human nature to characterize growth almost always in terms of size. When a human baby is said to be growing the term leans towards physical maturity than any other facet of human progress. It is also human nature to be comfortable with terms that are quantifiable, explaining why the Paris talks were done with such urgency albeit we have been cognizant of a potential climate change problem for decades. As developed nation’s economies become saturated and the climate continually reminds us that it is fallible, economic growth in its present form has become archaic.
For Africa growth is not optional, but a prerequisite for societal advancement. Africa finds itself in the same context that Post World War countries who decided to adopt the G.D.P measure at the Brent-wood conference found themselves in; low production, high unemployment and dilapidated infrastructure. Africa is one of the fastest growing regions by G.D.P averaging between 5-6% in the last two decades. Whether this has translated into higher living standards is debatable; over 600 million African are currently living without electricity. According to the African Progress report, Sub Saharan Africa’s G.D.P has grown by 5% annually despite the fact that the per capita use of electricity has actually stagnated. There is a clear disconnect between Economic Growth and higher quality of life for African citizens that boils down to sustainability, lack of contextualization and G.D.P measurement issues.
A Green G.D.P
Sustainability issues have finally taken a deserved front row seat in World politics. As a mere 2% emitter of Carbon, Africa has hardly been the perpetrator of our current climate crises. It is understandable when African states see the sudden rise in sustainability as restrictions in growth and hoops that developed states did not have to jump through. This is however misguided. Africa is the region with the highest climate change risk. Shifting seasons and rising temperatures have wreaked havoc in the African Agricultural economy giving rise to an impending food crisis. This doesn’t imply that developing countries should ditch fossil fuels, as this would be impractical, but rather have an energy mix that has the right balance between fossils and renewable energy. Sustainability is an issue that requires Africa’s full attention both in terms of policy formulation and planning.
Sustainability also speaks to longevity of economic growth and Africa’s energy crises threatens both the general quality of life and sustained growth rates that lead to better well being. Africa currently has one the highest per Watt cost of electricity in the world with millions still to witness Thomas Edison’s light bulb invention over a century since it was invented. With around 600 000 Africans dying from pollution related to use of solid biomass for cooking, lack of electricity clearly reduces the quality of life. Increased electricity generation is therefore a key component of sustainable economic growth. African governments should shift their current energy policies to reflect this.
Growth Characteristics and impact on well being
The characteristics of growth are extremely important. Current trends indicate that African economies are largely consumer product driven and export low value goods. This is hardly sustainable in the long run as low value exportation simply means an economy is operating below its potential. The mere fact that output levels are higher than last year’s cannot be interpreted as leading to better well being for African citizens. For example: Higher output levels have led to rapid urbanization in Africa which has worsened the quality of life. Most Africa countries are Post-Colonial societies whose cities were built for a white settler minority. With manufacturing industry largely located near cities, there has been a large exodus from rural Africa to the cities, where resources are insufficient to handle the influx. Urban slums consisting of make shift housing have begun popping up around major African cities. For growth to be sustainable it should be decentralized.
Growth in the African context is also dominated by foreign multinationals. Their impact is essential for long term development through their investments in infrastructure and technology, but surely the large amount of profits that are repatriated to their foreign headquarters make a case for partial inclusion of the firms output in a developing nations G.D.P. This anomaly explains why African economies experienced a growth spurt once the World made obsolete the Gross National Product Calculus that matched a company’s output to its nation of origin. Such analysis is important so as growth is assumed to have a direct impact on livelihood.
A Globalized indicator
How connected is the World? Through a click of a button, stockbrokers in Lagos can sell off Chinese shares sparking market panic that would lead the Chinese government to initiate market breakers by noon- The answer is very connected. Like a complex puzzle the World economy has become more intricate and connected than ever before. So why is the most important determinant of economic well being country specific, why not globalize G.D.P?
When measuring annual progress of a country it is essential to factor in economic events that may have an impact on a countries major trading partners and other world economic affects that may directly impact the domestic economy.
The Cocktail Model
Hans Rosling propagated the idea that economic and other data can be better presented by a dashboard of indicators rather than a single amount. After decades of practicing medicine in Africa he realized that there was no metric sufficient enough to present the complex story of progress he had witnessed. Just like a cocktail, numerous indicators and measures need to be weighted in the right quantities and selected into the mix based on the relevant context. The cocktail model presented below is for a developing world context, and specifically in the African region.
The Cocktail model is based on the premise that economic growth is currently a major component of policy formulation and planning. It argues that for a figure so influential, the simplicity in calculating something so powerful is erroneous. The computation of economic growth should be a complex composite that weighs economic factors based on impact to the relevant economy. For example per capita usage of electricity would be irrelevant for a developed world context but extremely relevant for Africa. The Cocktail model will transform growth to become a measure of sustainable development and other facets that have a link to better well being.
- 1 shot of-Green G.D.P
- ½ a shot of- Gini Coefficient
- 1 shot of –Per Capita usage of electricity
- ½ a shot of -Literacy rate
- ½ a shot of- Brain drain statistics
- Shake well- Adjust for effects of economic changes in major trading partners
The List above is not complete but it gives a good example of what the composite will be made up of.
Looking inside the Crystal Ball
Can growth ever be sustainable? China’s drive to shift from an export driven economy to a more sustainable economy driven by internal demand highlights a key concept in modern growth; For growth to be sustained the economy should over periods of time consistently adapt. Traditional industries have become saturated in developed countries with new growth in the form of big data, technological innovation and investments in the knowledge economy. For developed nations this is where the future of economic growth lies.
Innovation is vital for exposing those future growth areas, especially for Africa, a continent still lagging behind in terms of access to electricity let alone technological infrastructure. There have been a few principle errors with regards to developing country innovation. Innovation has largely been made synonymous with the developed world. As the leaders in innovation, the roadmap countries like the U.S.A took are often seen as the blue print for developing countries to follow. The flaw comes from the lack of uniformity between the cultural, socio-economic and political experiences between countries and continents. Innovation is persistently seen as something developed countries have done before thus leads to technological hand me downs from developed to developing nations. For African innovation to grow this must stop. Innovation should be inspired by the uniqueness of the developing country context.
The foundation of the technological boom in Africa shall be based on mobile solutions centered on the SMS texting platform (S.S.D). Applications like Mpesa in Kenya and Eco-cash in Zimbabwe have already transformed African banking to become accessible even for individuals in remote parts with no access to banks. The growth in mobile use, largely non-smart phones has made this a lucrative gap to exploit. The exploitation of the S.S.D platform speaks towards understanding context and using available technologies to drive innovation. Most of Africa’s future growth will come from such innovative and contextual solutions.
Slippery Slope
Before concluding it is important to partake in a short detour and attempt to analyze the age old adage linking wealth and happiness. The idea that money cannot buy happiness is a notion that has been taught in folklore for generations. It attempted to correctly cement the fact that the richest man was not necessarily the happiest while having the effect of also incorrectly reassuring the poor that money was not a necessary component of happiness. What is certain is that happiness is extremely difficult to quantify; even with the most accurate survey. A survey will have several cultural and contextual limitations. Happiness in China or the United Arab Emirates for example will be difficult for a western cultured individual to comprehend. A Chinese citizen may not be happy about the limitation of some civil liberties by the government, but would China have been so successful under a neo-liberal political structure? The arbitrary conclusions we would reach in trying to answer that and the subjectivity associated with happiness make it almost impossible to compute.
“Focus on economic aspects of non-market and near market activities……..and not attempt to measure the welfare effects of such transactions” –Bureau of Economic Analysis.
What is clear is the need for a monetary foundation to fund an increase in living standards. Economic growth is an essential component of economic well being.
Conclusion
The future of economic growth as a dominant measure in the political and economic sphere banks on our ability to adapt it to embrace sustainability. Effects of Globalization and the need to incorporate other indicators that better measure well being translate into a phase where a cocktail of indicators will overshadow the world’s current obsession with a single indicator model. What is certain is that the next wave of Economic growth lays Africa.
Jonathan Ruwanika 
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