Speech by former President FW de Klerk to Merck, Germany, October 18 2010:

PROSPECTS FOR AFRICA IN THE TWENTY-FIRST CENTURY

It is a great pleasure for me to be able to address this conference on prospects for Africa during the 21st century. Merck is a truly global company and has a natural interest in likely developments in the world's second largest continent.

In 2000, at the beginning of the new millennium, South Africa's President Thabo Mbeki claimed that the Twenty-First century would belong to Africa: 

After five hundred years of exploitation and domination by Europe, Africa would finally emerge from the shadows of global affairs and take its rightful place on the world stage.

The World Bank's response was "Yes, Africa can claim the new century ... but this is a qualified yes". It was "conditional on Africa's ability - aided by its development partners - to overcome the development traps that kept it confined to a vicious cycle of underdevelopment, conflict, and untold human suffering for most of the 20th century."

In its lecture to African leaders, the World Bank proposed development strategies that would be focused on:

• Improving governance and resolving conflict;
• Investing in people;
• Increasing competitiveness and diversifying economies; and 
• Reducing aid dependence and strengthening partnerships.

How has Africa fared since then - and is it still on track to claim the 21st century as the African century? Let us then assess Africa's progress in terms of the four criteria that were identified by the World Bank:

Africa has made some progress in putting an end to the conflicts that ravaged much of the continent in the closing decades of the twentieth century. Peace has returned to Angola, Mozambique, the Ivory Coast, Rwanda, Burundi, Sierra Leone and Liberia. Nevertheless, tensions continue to simmer many parts of the continent. The most peaceful African country according to the Global Peace Index, is Botswana at the 34th position - and 13 African countries are included in the 30 least peaceful countries in the world.

Improvement in the area of democratic governance has slowed down during the past ten years: In its latest survey of political and civil rights, Freedom House in New York reports that there are 9 ‘free' countries in sub-Saharan Africa; 22 that are ‘partly free', and 17 that are ‘not free' at all. It also reported that 2010 witnessed a continued pattern of volatility and decline for the region.

Africa also continues to struggle with regard to investment in its people. The highest ranked African country on the UNDP's 2009 Human Development Index is Mauritius at 72nd position - while 34 of the bottom ranked 40 countries were all from Africa.

Some progress has been made in respect of education. Primary school enrolment increased from 52% in 1991 to 73.4% in 2009. However, only 30 % of eligible children were enrolled at high school compared with 87% in the OECD countries and 69% in East Asia.

The World Bank also identified the need for African countries to improve their competitiveness and to diversify their economies. How have they fared? The highest ranked African country in the latest World Economic Forum Global Competitiveness Report was South Africa - which was positioned 54th out of 139 countries. African countries occupied 14 of the 16 bottom places on the list.

African countries have also not fared well in liberalising their economies. According to the latest Economic Freedom in the World Report Botswana has the freest economy in Africa. Nevertheless, it ranks only 54th in the world. South Africa is placed 82nd and 21 of the world's 30 least free economies are in Africa.

As recommended by the World Bank, Africa has made some progress in diminishing its dependence on foreign aid. In 2005 it still received over US$ 30 billion in foreign aid. However, this represented only 5.1% of the continent's GDP - down from 5.7% in 1990.

If we measure Africa's performance solely according to the World Bank's criteria, its prospects for claiming the 21st century as its own, do not look very good.

However, there are much broader dimensions that we must consider when we think of Africa and the future. In particular, we must look at the continent's vibrancy, its enormous potential and its growing strategic importance.

Last year Newsweek ran a major story in which it reported that Africa was becoming the new Asia - and could be compared to the emerging giants China and India. According to the article:

• Most of the countries of east and southern Africa had economic growth rates comparable to those of China and India in 2007 and 2008;
• Although the continent had suffered as a result of the economic downturn in 2009, its growth of 2% still outperformed much of the rest of the world except China and India; 
• Africa's economy is expected to grow by 4.8% this year - which is better than the expectation for Brazil, Russia and Mexico.
• Surprisingly, this growth has not been based primarily on the continent's natural resources but by a surge in private consumption demand from the rapidly growing middle class. 
• There are signs that expats from the African diaspora are returning to their native countries and are contributing to economic growth. According to reports, 10 000 highly educated expats have returned to Nigeria.
• Economic growth will be further stimulated by urbanization. The rural population still comprises two thirds of the total - but they are rapidly moving to the cities and are beginning to participate in the economy.
• According to a recent study, the annual return of 954 publicly trade African companies between 2000 and 2007 was on average 65% higher than those of similar companies in China.

All these developments create a much brighter picture than Africa's gloomy performance in various global rankings.

The central reality is that sub-Saharan Africa constitutes one of the largest areas of under-developed real estate in the world. There are about the same number of people in its 24 million square kilometers than there are in the 3.3 million square kilometers of India. The continent is endowed with enormous mineral resources in a commodity hungry world. The Chinese - and other nations - have been rushing into the continent to tie up long-term contracts for Africa's iron, cobalt, coal, vanadium and oil.

Perhaps, more importantly, only a fraction of Africa's agricultural potential is, at present, being fully utilized. 

The Food and Agricultural Organisation estimates that the land area for rain-fed crops could be increased from 150% - 700% per region - with a potential for the whole continent of 300 million hectares.

Africa's agricultural potential is attracting enormous foreign interest. The British newspaper, the Observer, estimates that up to 50 million hectares of African farmland has been acquired by foreign investors or is in the process of being negotiated. This area is more than double the size of the United Kingdom.

All this is also changing international perceptions of Africa's strategic importance. For most of the period after World War II, Africa was of interest to the great powers primarily to the extent that its newly independent nations were viewed as areas of contestation between the United States and the Soviet Union. European countries took it almost for granted that they would be able to retain special relationships with Africa because of their former colonial ties.

With the ending of the Cold War Africa subsided into the global strategic background. African nations were no longer able to play one super power against the other in their efforts to promote their national interests. President Thabo Mbeki was shocked in 2000 when leading members of the European Commission told him that "the EU did not have any strategic perspective relating to Africa, as it did with other areas of the world, such as East and Central Europe, the Middle East and the United States."

(The dismissive attitude of the Europeans reminds one of Henry Kissinger's reply to a senior South American diplomat who complained that the United States did not accord his continent sufficient importance in its geo-strategic planning. Kissinger replied that "On the contrary, I have always regarded South America as a dagger pointed straight at the heart of ... Antarctica.")

China, in particular, is showing intense interest in Africa. Although its trade with Africa makes up only 4% of the total, it has doubled during the past decade and now exceeds $ 100 billion. According to "The Telegraph" as many as 750 000 Chinese workers are now involved in development projects in the continent. Africans often complain that such workers do not integrate with the local population and take jobs that might otherwise go to locals.

Relations with China were a major issue in the recent election in Zambia - which was won by President Sata - partly on an anti-Chinese platform.

Although European and American investments in Africa are still significantly larger than those of China, there is clearly no room for complacency.

Europe and the United States will continue to dismiss Africa at their peril: the continent is, for the following reasons, rapidly emerging from the periphery of global strategic interest:

• Access to Africa's mineral and agricultural resources is becoming increasingly essential for Europe, North America and Asia.
• As a result, the continent is once again becoming an area of contestation as emerging economic powers led by China scramble for a share of its enormous mineral and agricultural resources.
• Africa is also playing a central role in the expansion of Islam. Half of the countries of Africa - some 27 nations - are members of the Organisation of The Islamic Conference. They also comprise half of the 54 Islamic states. It is estimated that 45% of the continent's population are Moslems, compared with 40% who are Christians. Competition between Moslems and Christians is playing a significant role in conflicts in a number of countries - including Sudan, Nigeria and the Ivory Coast.

African Moslems are, on the whole, moderate and coexist peacefully with their Christian neighbours. However, Kenya and Tanzania were among the first targets of Al Qaeda terrorism and the collapse of state authority in Somalia is creating opportunities for Al Qaeda and other extremists.

In a world that will be increasingly hungry for natural resources and for food increasing attention will inevitably be focused on Africa. It is not by any means sure that such attention will always be benign or be concerned with the best interests of Africa or its people. This presents the continent with a special challenge: it must continue to do everything it can to meet the challenges that the World Bank set more than ten years ago:

• Africa must do more to establish genuine democracies in the 39 sub-Saharan countries that still only partially free or not free at all;
• It must continue the good work it has done to resolve the continent's remaining conflicts;
• It must continue to catch up the rest of the world in terms of education and human development;
• It must improve standards of governance and eliminate pervasive corruption:
• It must increase the competitiveness, diversity and openness of its economies so that there will no longer be any need for dependence on foreign aid. 

I believe that Africa is accepting these challenges. However, Europe and the United States must also devote more attention to Africa:

• They must continue to give African exports generous access to their markets through the continuation and expansion of programmes such as the American African Growth and opportunity Act (AGOA) and the EU ‘Everything but Arms ‘ schemes;
• They must continue to alleviate the detrimental impact of EU and US agricultural subsidies on Africa's ability to compete in global and African agricultural markets;
• They must continue to encourage African countries to improve governance and democratic standards and must support African efforts to resolve the remaining conflicts on the continent; 
• They must move away from old relationships based on foreign aid dependence to new partnerships based on increased trade and investment; and finally
• they must give Africa much more serious consideration in their global strategic planning - because they can be assured that if they don't other emerging powers will quickly step into the breach.

Global companies llike Merck must also give greater prominence to Africa in their global strategies. Within a few decades Africa will present a market of more than two billion people. If present trends continue, that market will become richer and more sophisticated with each passing decade and will represent one of the main growth areas for European exports and investments.

Whatever happens, one truth remains. Global strategic attention will be increasingly focussed on the continent - because of its enormous mineral resources; because of its untapped agricultural potential in an increasingly hungry world; and because of the potential of its people. 

Last year, during the FIFA Soccer World Cup, Africa gave the world a glimpse of its potential. To the blare of Vuvuzelas - and with the waving of its multicoloured flags - it was announcing that it was about to take its rightful place on the global stage.

Perhaps Thabo Mbeki was right: Perhaps this will be the African century. 

Issued by the FW de Klerk Foundation, October 19 2011

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