Africa Is More Stable than You’ve Been Led to Think – The recent political instability in Mali has cast a cloud of poor publicity over the economic and commercial rise of Africa, one of the few bright spots in the global economy. Press analysis has speculated whether political instability is endemic to Africa and likely to expand in the future. It’s an important point for the many companies, from GE to Unilever, that are turning to Africa for their next wave of growth.
Across Africa, successful coups are rare and getting rarer. This Economist Intelligence Unit has tracked the trend since 1960, shortly after colonial withdrawal began. Given the preconceived impression of Africa as coup crazy, many lose sight of the decline of coups. While working in Kenya recently, I called a leading investor in Silicon Valley to discuss Africa’s emerging technology sector. He sent me a graphic he found in the British newspaper mapping all the secessionist movements in Africa, and what the map would look like if they all succeeded. That speculative, uninformed graphic did its readers a terrible disservice, as it would if it sounded alarms about the secessionist movements in Texas, California and New York City, all of which have threatened to leave the US.
There are many drivers for why coups are playing a diminishing role in Africa. Prominent among them is that governments are getting more capable at governing. The generation that liberated Africa has been replaced by one that is better educated, more widely traveled, and with access to better technology and information. Deep governance challenges remain, but Idi Amin and his ilk are no longer running the continent.
Africa’s governments aren’t just becoming more stable. They’re becoming more representative, albeit in an irregular pattern, as befits a continent with 54 countries. The Polity IV Project measures political regimes on a spectrum from fully institutionalized autocracies (low scores) to fully institutionalized democracies (high scores). As can be seen below, the trend since 1990, across all of Africa, has been towards more democracy.
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Whether representative government is good for business is a matter of long debate, and in any event depends on how much a business benefits from privileged access. Most of the CEOs I know leading competitive, productive businesses in Africa consider a more representative government good for Africa and good for them. Particularly in the wake of the Arab Spring and with social media spreading across Africa, a more responsive government is seen as assuring continuity of both policy and regimes.
For CEOs in Africa and many frontier markets, more responsive government means better opportunities for them to engage meaningfully in the policy-making process. “Blue ribbon commissions” and the like may be a source of skepticism in the US, but bodies like the newly formed competitiveness council in nigeria are the first real opportunity for businesses to improve how African governments manage the economy.
Bad government and even failed governments will continue to appear in Africa. If history is a guide, their appearance will be magnified by the press. Don’t be fooled by that magnifying glass. Keep your eye on the long-term trend.
Many thanks to Jonathan Kirschner (Stanford MBA ’12) for his help researching this post.