Africa Rising

Africa Rising by Vijay Mahajan (2008) is a really interesting book about Africa and the opportunities that it offers. In contrast to other books on Africa like Dead Aid and The Trouble with Africa the picture put forward is considerably more positive. Perhaps in part because the book looks forward rather than back. Mahajan is a very bright guy who went to IIT and then went on to study management and public policy. He’s an Indian so he has an interesting perspective on how places develop. His main point is that in the 1960s and 1970s many in the West thought that India was going to be a basket case. Paul Ehrlich stated that “India couldn’t possibly feed two hundred million more people by 1980,” and “I have yet to meet anyone familiar with the situation who thinks that India will be self-sufficient in food by 1971.” Whereas now, 40 years after these sorts of thoroughly erroneous predictions India is not only feeding hundreds millions more people it is growing rapidly economically and is seen as a huge economic opportunity. Mahajan believes that similarly the Western take on Africa is wrong and that Africa is set to grow and become a bigger and bigger market.

Mahajan makes the point that there are a dozen countries in Africa with GNI per capita that is larger than China and six more with a GNI between India and China as well as the others where GNI is lower than India. The Economy of Africa is not the basket case that many people assume. This argument alone should give people pause for thought. It’s interesting that Mahajan does not make the point that India and China are increasing demand for what Africa already supplies, raw materials, to the world but it is yet another argument as to why Africa is about to take off. One thing he points to is current African growth, which stands at 5.16% over the past 2 years of the Global Financial Crisis and resultant recession, a very impressive performance.

The book is divided into two Parts, The African Opportunity and Part II Realizing the Opportunity. In the first part Mahajan introduces his view of Africa in baking bread in Zimbabwe where he looks at a mall is what is for many the prime example of African failure. He points out that even despite the Mugabe totalitarian regime the market finds ways to work and improve things. He puts forward the trade not aid case. In the second chapter, Africa is richer than you think Mahajan looks at what Africa already has and the things that have recently happened that are helping Africa enormously. He points out that cell phones and the internet are, in many ways a bigger aid for Africa than they are in the West because they break the state monopolies on communication and information. He talks about how cell phones are being used for banking and have already allowed millions in Africa to communicate. Mahajan breaks down Africa in Africa One, the already rich part of Africa One, the 50-150 million people who already have a  considerable income, Africa Two, those working hard to education their children and who have some disposable income of 350-500 million people and then Africa three, the poorest Africans, who aspire to Africa two but are still purchasing goods but who are also trying hard to keep food on the table. This 500-600 million group has less potential for those selling goods, but still some. Africa two, which is discussed in Chapter 2 Mahajan regards as the sweet spot for those targeting Africa because of its size and potential.

In Part II Mahajan looks at how people are already making profits and enriching the lives of those in Africa. Mahajan makes the point that doing business in Africa requires knowledge of the way Africa works. In Chapter 5 he looks at The Hanouti, which are small shops in Morocco. By looking at how they operate a chain of Hanouti has been created that is capable of being both cheaper for people by using economies of scale and profitable. In Chapter 5 the possibilities for providing the infrastructure that Africa lacks are probed. Water pumps, airlines and refrigeration and discussed. In Chapter 5 Generation Cheetah Mahajan talks about how youth offers great promise in Africa and how young people in Africa don’t rail about ‘colonialism’ being responsible for their ills but instead want to make money and have better government that allows them better lives. Mahajan looks at Nollywood and how entertainment works in Africa. Who knew that one of the largest film industries in the world existed in Nigeria? In chapter 8 Mahajan looks at the African diaspora and the role that it plays in enriching Africa and the world.

In the Conclusion: Ubuntu Market Mahajan provides a conclusion to the optimistic picture that he has created. He makes a strong case. As an Indian he points out that once things start working they can really take off and the West’s pessimism which has been shown to be wrong across the world may also be wrong in the case of Africa now. The book is filled with data on the value of African markets and the growth and profits of companies and people in Africa and anecdotes about success stories from Mahajan’s travels in Africa.The book is perhaps over optimistic and spends little time looking at African problems like poor infrastructure and terrible government. However, the book is clear, well written and well worth a read for those who doubt that Africa too can rise and enjoy the fruits of the market and globalisation that have been so successful in reducing hunger and poverty in the rest of the world. Let’s hope Mahajan is right.



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