Africa's Outlook for 2016: Optimistic

According to the World Bank, six of the world’s fastest growing economies over the period 2014-2017 are predicted to be in sub-Saharan Africa. These countries are Ethiopia, the Democratic Republic of the Congo, Côte d’Ivoire, Mozambique, Tanzania, and Rwanda— countries so diverse that generalizations about their experiences with growth and structural change would seem to be absurd. But they all have one thing in common. They are filled with people who aren’t waiting for the government to provide them with a better future.

People are finding ways to survive through their own hard work and ingenuity. They are opening small businesses in cities and towns in rural and urban areas, and the government is no longer standing in their way. This might not seem like a big improvement, but things weren’t always this way. Once upon a time, Africans were thrust into jails in droves for “conspicuous consumption” during Tanzania’s socialist years. Tanzania isn’t the only country in which business was looked upon with suspicion. The Derg regime is famous for having brought the Ethiopian economy to its knees not so long ago.

So, when I find in my research that much of Africa’s recent growth has been accompanied by an expansion in small business activity (Diao, Kweka, McMillan and Quereshi, forthcoming), I get excited. True, these activities tend to have higher average productivity than agriculture so on average they have contributed to productivity growth. But that is not why I am excited. It is because African people are taking hold of their destiny. There are no more colonialists to forbid them from going to school. Nobody is locking them up for doing business. And some governments are even trying to make things better for small businesses. Of course, there are difficult challenges to overcome. Climate change and the youth bulge are just a few. My advice to Africa’s leaders and policymakers in 2016 is this: Trust your own citizens’ ability to come up with creative “home grown” strategies for growth and poverty reduction. Get out there and talk to folks in the private sector. Find out what they need. A strong public-private partnership is what is needed to further the transformation agenda in Africa.