Tweeting against the Wall of Jericho

African democrats have used social media to mobilise recruits into popular uprisings against oppressive governments, to reverse coups and to thwart election rigging. But if digital media have helped bring down bad governments, could they also be used to build up African economies?

That intriguing possibility was aired at Bloomberg’s Africa Business Media Innovators conference in Johannesburg this week, part the company’s wider initiative to boost the quality of business reporting in sub-Saharan Africa. 

The theme slotted into a wider debate which Colin Coleman, Africa CEO of Goldman Sachs, articulated when he asked whether the optimistic ‘Africa Rising’ narrative that has prevailed for the last few years was not now being overtaken by a gloomier ‘African Uprising’ narrative. Bloomberg’s editor emeritus Matt Winkler said the growth of the sub-Saharan African economy as a whole over the past decade had been ‘an almost staggering’ 50%, versus just 23% for the world at large, and only 13% in the US.

The second significant macro-economic statistic was that after peaking in 2008, average inflation across sub-Saharan Africa had declined and was continuing to decline or stabilise at around 7.8%. ‘Rising GDP and declining inflation are a good convergence of statistics in sub-Saharan Africa,’ Winkler said.

And he added that sub-Saharan Africa – especially Kenya and Nigeria – was currently the best performing bond market region among emerging economies. Bond investors in Nigeria had registered returns of 40% and those in Kenya 56% since 2014. And the former was so despite the plunge in the oil price.

Coleman noted that his company had just helped Angola successfully issue a US$1.5 billion sovereign bond, which had been hugely oversubscribed, attracting US$7 billion in investment. And this was in spite of the government having halved its government budget over the past year, also because of the plunge in the oil price.

Both attributed these good figures largely to investors betting on the demographics of sub-Saharan Africa, with the fastest growing youth population in the world, providing many consumers for the future.

However, Jay Ireland, CEO of GE Africa, cautioned that Winkler’s macro data about Africa might be too optimistic because he said African equity markets were thinly traded and bond transactions were small. Africa needed to spend US$90 billion a year on infrastructure for the next 10 to 15 years if it really wanted to sustain the Africa Rising narrative and go beyond just financial investments.

That kind of money was not there, Ireland said. Without this major investment in infrastructure, he worried, the African economy would slow down as the continent’s narrative changed from Africa Rising to ‘Africa is not such a good place to invest in –there’s a lot of risk.’

Zimbabwean media mogul Trevor Ncube disagreed even more sharply with the positive outlook, saying such macro-economic data concealed the true economic picture of Africa.  

He noted that Credit Suisse had just released a report that fundamentally rebuffed the generally accepted statistic put out by the African Development Bank that Africa now has a middle class of about 200 million people.

Credit Suisse said the African middle class was actually about 18 million – just 3.3% of the 500 million adults in Africa. Ncube added that in his extensive travels up and down Africa, he had discovered that most Africans – especially the majority of residents in townships and informal settlements – were not living the Africa Rising narrative.

‘We ought to be cautious about the data we use,’ he added. ‘We’ve got Africa wrong so many times.’ He suggested that Africa needed to develop its own institutions to provide better economic data because most of the data now being used were produced by foreigners in pursuit of their own agenda and not by Africans themselves. The data needed to reflect how macro-economic growth was impacting ordinary people.

Carlos Lopes, Executive Secretary of the United Nations Economic Commission for Africa (UNECA), has also often lamented the dearth of good, African-produced data and has cautioned that it might produce a less rosy picture. ‘Maybe the picture will be even better if we had good data, but most likely less glamorous than it looks,’ he said in his blog article Counting matters! Statistics are the backbone of proper planning for Africa’s future.

Lopes recently persuaded African Union Commission Chairperson Nkosazana Dlamini Zuma to partner with UNECA on a new and ambitious data-for-Africa initiative. The scarcity of reliable government economic data – including budgets and censuses – was especially lamented at the Bloomberg conference.

And some consensus emerged that if Africa were able to produce better data, it would attract more investment, as investors were now wary of entering relatively uncharted territory, and boost growth.

Better data could thereby help shape the outcome of the debate between the Africa Rising and the Africa Uprising narratives. Much more investment and growth were needed to employ the 15 millions of youths coming onto the sub-Saharan market every year, most without job prospects.

Depending on how it was handled, this youth bulge could either be a great opportunity – providing dynamic entrepreneurs and a fast-rising consumer market – or a ticking time bomb for the continent, South Africa’s City Press editor Ferial Haffajee said.

Uzo Iweala, editor-in-chief of the Nigerian company Ventures Africa, noted that in Nigeria, a flourishing social media network had developed that was debating and interrogating government’s budgets. Nigerians were, for example, tweeting information about how much money the federal government had allocated to a particular state government – and then demanded answers from government officials about how it was spent.

Yet there was a broad consensus at the conference that social media, for all its energy and force, could not break down the stone walls of government officialdom if it simply refused to provide essential economic data to the public in the first place. The danger of social media vigorously debating opaque government financing without being able to influence it, is that this will heighten the perceptions of relative deprivation.

That might help to keep governments honest, but it has also been a key driver of conflict, instability and terrorism in Africa, says Anton du Plessis, Executive Director of the Institute for Security Studies.

Africa’s vast informal sector was identified as another black hole of information in African economies at the Bloomberg conference. Ncube said he recently discovered an informal zone in his own Harare that he had not even been aware of. Such areas were underreported, officially and unofficially, so they were not calculated into the official macro-economic figures or the public consciousness.

Informal traders do not want to be reported, since they are not paying taxes. A UN official asked if there was a way to report on such informal business activity while assuring the business people that the information they provided would not be divulged to the taxman.

The remark elicited surprisingly little commentary, suggesting implicit support for such tax evasion. Surely the right response should have been that if Africa needs more and better economic information to stimulate investment and growth, that information must cover the whole economy.

If Africa is to grow it must certainly stimulate its informal sector – but it must also harness it. Greater mobilisation of that and other domestic resources is critical to provide governments with the revenues to begin overcoming the huge infrastructure backlog which Ireland spoke of, and to provide government services.

Social media can beneficiate data, including by mobilising dissent against opaque government financing, but the problems of African economies and their solutions are ultimately political. Only greater democracy will compel governments to produce fully transparent budgets and other government economic data.

And only transparent governments, which are seen to be spending taxes in the public interest, will enjoy the legitimacy to draw the informal sector into the formal economy so it pays taxes too. It’s a virtuous circle, but it starts with better governance.

Peter Fabricius is an ISS Consultant

This article originally appeared in ISS Weekly, 12 November 2015