September 24, 2022
On May 1, 2014, Nigeria’s then-president, Goodluck Jonathan, addressed a crowd of workers in the country’s capital Abuja. He declared that “the challenge of the country is not poverty, but redistribution of wealth.”1 The prompt for his comment was a report issued only a few days prior, which labeled Nigeria, Africa’s most populous country, as one of only five nations that are home to two-thirds of the world’s population living in extreme poverty.2 Rejecting the categorization of Nigeria as a poor country, President Jonathan pointed to the country’s Gross Domestic Production (GDP), which he declared was “over half a trillion dollars.” Moreover, the economy, he maintained, was “growing at close to 7 percent.”3
It was only a week before the president’s address that the official figure for Nigeria’s GDP had been significantly revised. The first reexamination of the structure of the Nigerian economy since 1990 showed an increase in the country’s 2013 GDP by 89 percent. Scholars were surprised by the dramatic growth in the banking and telecommunications sectors and the significant decline in the relative size of the hydrocarbon sectors.4
With little outside recognition, the Nigerian economy had transformed itself in the space of a couple of decades. Once dependent on oil exports, by 2014 the economy had been diversified and was growing rapidly. This was a stark shift from the economy described by IMF observers in 1999, who wrote that “Nigeria’s economic and social development remains far below even the minimum expectations of the population.”5 In that year, half of Nigeria’s population lived in absolute poverty, the life expectancy was only fifty-two years, and infant mortality was eighty-four out of every 1,000 live births.6
What more recent calculations of the economy reveal, however, is that Nigeria has not suffered from a lack of long-run growth as many scholars of African development had long assumed. Rather, the problem is that growth has not significantly reduced the rates of poverty—today, over 40 percent of Nigeria’s population lives below the extreme poverty line.7
Since independence, scholars across the political spectrum have long debated the reasons for Africa’s abnormally slow growth.8 Much of that writing has been characterized by pessimism,9 but nearly two decades ago, economic historians formed the African Economic History Network in order to challenge the poor quality of data used in narratives about Africa’s economic past, as well as to center Africa’s position in the discipline of economic history. Building on the efforts of this network, Morten Jerven’s new book begins with an assertion that startles our notions of racial hierarchy and global economic history:10 in the long run, Africa’s rate of economic growth is unexceptional. He notes:
The aggregate pattern is a long period of expansion, sometimes dating from the 1890s to the 1970s. This gave way to widespread failure and decline in the 1980s, followed by two decades of expansion since the late 1990s.11
The statement stands in stark contradiction to decades of research on African economies, which have been devoted to explaining a persisting failure of economic growth. Jerven goes on to state that:
It is true that on average African economies grew more slowly than other economies from the 1960s until the mid-1990s, but that is true only if you take the average of that whole period and let it end in the mid-1990s. It is not true that African economies grew more slowly on average in the 1950s, the 1960s, the 1970s, and the 2000s.12
What, then, is the source of the growth-resistant narrative? One stylized fact stands behind the perspective that African economies possess structural barriers to growth: during the 1980s and most of the 1990s, African economies grew at far lower rates than the rest of the world.13
Yet, as Morten Jerven has argued brilliantly since his 2013 book Poor Numbers, the average growth figures from the 1980s and 1990s were overemphasized and erroneously extrapolated from in order to breathe new life into the colonial idea that Africa is an unchanging and stagnant continent mired in poverty.14In Poor Numbers, Jerven unveiled the ways that GDP statistics upon which growth rates were calculated were skewed. In retrospect, the troughs of the 1980s look too deep, and the accelerations of the late 1990s and the African Renaissance of the early 2000s are too fast. Jerven’s book was an indictment of armchair economists and political scientists who performed statistical analyses based on figures tabulated in places like the Penn World Tables, Angus Maddison Index, or the World Development Institute to make causal inferences about why, for instance, Japan is so much richer than Ethiopia. During the first decade of the twenty-first century, these methods led to a revival of work examining Africa’s economic past within North American economics departments.15 The examinations resulted in a series of widely cited and highly influential papers about the long-duration causes of Africa’s relative poverty, which emphasized the inadequacies of African social, cultural, and political institutions. Some of the most famous papers were produced by Daron Acemoglu, Simon Johnson, James Robinson, Nathan Nunn and Leonard Wantchekon.16 Jerven’s adviser, Gareth Austin, argued that this literature, which defined the “new African economic history” and accompanied the rise of causal inference as a method of political science, suffered from what he termed “the compression of history.”17 In particular, Austin argued that by not differentiating between different periods of history, stories of causation become oversimplified.
The image of African poverty has proven so enduring in part thanks to the depths of what Giovanni Arrighi termed “the African Tragedy.”18 For Arrighi, a few descriptive statistics captured the magnitude of the Sub-Saharan African disaster in the period between 1975 and 1999. For instance, he wrote that in 1975 the Gross National Product (GNP) per capita of Sub-Saharan Africa stood at 17.6 percent of “world” per capita GNP; in 1999 it had fallen to only 10.5 percent. While aggregate national economic income statistics told part of the story, Arrighi also demonstrated that health, mortality, and adult literacy all declined at similarly steep rates in comparison with other developing countries. At the turn of the twentieth century, this contributed to a sentiment captured by The Economist in 2000, when a front cover declared that Africa truly was “The Hopeless Continent.”19
By 2011, however, The Economist had joined the chorus proclaiming that Africa was “rising,” now re-dubbing Africa “the hopeful continent.”20 Writing breathlessly, the magazine noted that, “over the past decade six of the world’s ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including Japan.”21 Equally important, African economies’ rates of growth did not decline with the Global Financial Crisis of 2008. Indeed, The Economist’s lead writers remarked approvingly that in 2011 and 2012, African economies were expected to continue growing at roughly 6 percent a year—about the same as those of emerging Asian economies. According to World Bank statistics, the first two decades of the twenty-first century saw African economies grow at an average of 4.35 percent; well above the global average of roughly 3 percent for the same twenty-year span.22 An entire cottage industry has emerged to explain Africa’s economic renaissance. Much of the analysis has centered on the ability of African states to convert income from the commodity boom—caused by rising Asian demand, especially from China—into sustained development. This has enabled the development of labor-intensive, export-oriented industrialization in several African countries, but questions remain about whether this industrialization can be sustained in countries like Ethiopia, which erupted into civil war in November 2020.23
In The Wealth and Poverty of African States, Jerven raises an alternative possibility. Rather than a deviation, he posits that the African growth rates in the present century show a reversion to long-standing growth trends. Drawing on original time-series data for several countries in British Africa, including the Gold Coast (Ghana), Sierra Leone, Kenya, Nyasaland (Malawi), Tanganyika (Tanzania), and Uganda, Jerven and his colleagues challenge the standard narratives about African economic development. Since “the data for calculating GDP for African countries before 1950 is scarce,”24 with little available beyond the British government’s colonial blue books, he posits that “the most prudent course of action might be to plead ignorance regarding population growth and agricultural productivity.”25
Instead, Jerven and his colleagues use the fairly reliable data that exists in government documents for exports, imports, government expenditures and revenue to create a consistent data set spanning the entire twentieth century. As Jerven readily acknowledges, this limits his study to the growth rate in formal markets and excludes the huge informal sector, where the vast majority of economic activity is estimated to take place in many African societies. Despite sparse historical data and the need to make key assumptions about the productivity of the agricultural sector and the quantity of food consumption, Jerven demonstrates that Africa was by no means an economically stagnant continent in the twentieth century. Rather, there was sustained and widespread growth during the colonial and early independence periods ranging from the 1890s to the 1970s. There was indeed a sharp interruption to this growth during the 1980s, but growth resumed in the 1990s, as is the case today.
The outstanding challenge to Jerven’s narrative of continuous economic growth in Sub-Saharan Africa is the persistence of African poverty. Comparative studies between Sub-Saharan African workers and peasants and their peers in Asia have found that the former appear relatively prosperous from 1940 to 1970, yet the picture changes thereafter. As Francois Bourguignon and Christian Morrisson have pointed out, the twentieth century saw dramatic changes to the patterns of global poverty that had dominated the nineteenth century:
Europe’s ascending supremacy from 1820 until 1950 was checked by the economic rise of the Asian dragons and the relative decline in the European population. At the other end of the spectrum, the dominant change has been the continuously increasing share of Africa among the world’s poor, an evolution that accelerated sharply during the twentieth century. Because of Africa’s rapid population growth and its lower than average economic growth, this region’s share among the world’s poorest 60 percent increased from 8 percent at the end of the nineteenth century to 17.5 percent in 1992.26
Though this shift in concentrated poverty from Asia to Africa in the aftermath of the Second World War is left unaddressed in Jerven’s book, it nonetheless haunts his work. Jerven makes use of the 2011 real wage data set produced by Frankema and van Waijenburg to show that wages in African urban areas grew steadily and sometimes quite rapidly from the 1880s until the 1960s, particularly in the non-settler colonies of West Africa and Uganda.27 He concludes by noting that “corroborating evidence indicates that the incidence of poverty was not a typical African phenomenon five decades ago.”28 If poverty was a common phenomena during the colonial period, it raises serious questions about the efficacy of the international aid enterprise, which, beginning in the 1970s, made the elimination of poverty its primary policy goal.
Such an admission makes it all the more pressing to question what did in fact happen in the last decades of the late twentieth century. Drawing on Latin American history, Robert Bates, John H. Coatsworth, and Jeffrey G. Williamson have argued that Africa’s “lost decades” may be akin to the political instability that marred Latin America in the decades immediately following European colonialism. Such a thesis implies that a resumption of growth and relative political stability should have been expected in Africa in the early decades of the twenty-first century.29 Recent data from Ghana appears to justify the theory, insofar as it shows that the sharp rise in rates of African poverty during the 1980s and early 1990s was a temporary phenomenon, and not the beginning of a persistent trend. For instance, in 1991 about 47 percent of Ghanaians lived in extreme poverty, but that number declined to 25 percent in 2005. Yet, as Frankema and van Waijenburg underscore, though there has been a drop in the rate of poverty, Africa is still far behind China. While African economies may have a long track record of growth, the rise in living standards in the post-colonial era has been far too slow. Without a substantial change in the structure of African economies, poverty seems inevitable.30 Writing two decades ago, Giovanni Arrighi asserted that the tragedy which befell African societies in the 1980s was the result of a dramatic shift in the global economy. In the 1960s and early 1970s, Africa had enjoyed favorable terms of trade, allowing governments to make large investments in their human capital and import-substitution industries. Having made use of the cheap capital available from Western banks, these states soon found themselves suddenly vulnerable to rising interest rates in the United States, leading to a surge in the cost of their debt. The debt crisis that ensued led to structural adjustment policies which in turn greatly curtailed state capacity. All the while, the intensification of the Cold War sparked prolonged conflicts in southern Africa and the Horn of Africa throughout the 1980s.31
After more than two decades of growth, Africa continues to face a similar problem. Rising interest rates in the United States and growing tensions with China and Russia raise the prospect that African growth will once again be curtailed. The hope, however, is that African economic growth has significantly decoupled from that of developed economies since the crisis of 2008. The maturation of this increasing financial independence can be seen from the rise of Pan-African banks across the continent, and particularly in West Africa. As Hannah Appel warns, however, it is still too early to know whether the rise of Pan-African banks really breaks the mechanisms of dollar dependence that led to Africa’s lost decades in the 1980s.32 We may be entering a period where the growing cost of dollar-denominated capital will force African countries to embark on austerity programs of similar severity to those in the 1980s, which had ruinous results for African societies and long-term state capacity. The hope is that the resilience of African economies and capital markets have improved, making them less vulnerable to a period of US-led financial restriction.
Though it represents an impressive contribution to the study of African economic history, Jerven’s book nevertheless leaves certain key questions unexplored. Perhaps the weakest element of the book is that its time series begin in the 1890s, roughly the decade in which Britain and France consolidated their control over the continent. This allows Jerven to emphasize what he sees as a weak relationship between domestic policy and economic growth. But while the policy regime a particular country adopts may not have dramatic impacts on its long-term growth rate, it does have serious implications for the domestic distribution of income. The pathbreaking work of Kevan Harris has shown that countries like the Islamic Republic of Iran have reduced income inequality through social welfare measures even while enduring three decades of negative growth rates due to sanctions.33 Jerven has much to say about economic growth, but little to say about the lived experience of that growth.
Discussing the wealth of Nigeria, former President Goodluck Jonathan concluded, “If you talk about ownership of private jets, Nigeria will be among the first ten countries, yet they are saying that Nigeria is among the five poorest countries.”34 The statement underlines the crux of the real challenge facing African economies—the African continent has the second highest levels of inequality in the world, behind only Latin America. The top 10 percent of the population owns 78 percent of all assets across the continent.35
Not all growth is equal. On its own, GDP growth does not improve the living standards and experiences of workers. Beyond GDP, domestic policy plays a decisive role in facilitating job creation in productive sectors, ensuring adequate compensation, and offsetting living costs through welfare measures. In determining who benefits from growth, and how much, policy regimes—and the politics that put them into place—still have an enormous role to play.
“Nigeria is Not a Poor Nation, Says Jonathan,” Vanguard (May 1, 2014): https://www.vanguardngr.com/2014/05/nigeria-poor-nation-says-jonathan/
World Bank Group, “Prosperity for All: Ending Extreme Poverty,” Notes for the World Bank Group Spring Meetings 2014: https://openknowledge.worldbank.org/bitstream/handle/10986/17701/32853ProsperityForAll.pdf?sequence=4
“Nigeria is Not a Poor Nation, Says Jonathan,” Vanguard (May 1, 2014): https://www.vanguardngr.com/2014/05/nigeria-poor-nation-says-jonathan/
Javier Blas and William Wallis, “Nigeria Almost Doubles GDP in Recalculation,” The Financial Times (April 7, 2014): https://www.ft.com/content/70b594fe-bd94-11e3-a5ba-00144feabdc0.
IMF, “Memorandum on Economic and Financial Policies of the Federal Government of Nigeria for 1999,” IMF (February 22, 1999): https://www.imf.org/external/NP/LOI/1999/022299.HTM.
Ibid
Oladeinde Olawoyin, “Number of Poor People in Nigeria to Reach 95 Million in 2022—World Bank,” Premium Times (March 30, 2022): https://www.premiumtimesng.com/business/business-news/520849-number-of-poor-people-in-nigeria-to-reach-95-million-in-2022-world-bank.html.
Frantz Fanon, Wretched of the Earth (New York, NY: Grove Press, 2021); Walter Rodney, How Europe Underdeveloped Africa (New York, NY: Verso, 2018); Giovanni Arrighi and John S. Saul, Essays on the Political Economy of Africa (New York, NY: Monthly Review Press, 1973); Peter T. Bauer, West African Trade: A Study of Competition, Oligopoly and Monopoly in A Changing Economy (London, UK: Cambridge University Press, 1954); Robert H. Bates, Markets and States in Tropical Africa: The Political Basis of Agricultural Policies (Berkeley, CA: University of California Press, 2014); Paul Collier, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It (Oxford, UK: Oxford University Press, 2008).
Saidiya Hartman, Lose Your Mother (New York, NY: Macmillan Press, 2006); Alden Young, “How Black America Fell Out of Love with Africa,” Noema.com (March 8, 2022): https://www.noemamag.com/article-topic/geopolitics-globalization/
The first meeting of the African Economic History Network took place in 2005 at the London School of Economics. It was organized under auspices of Gareth Austin. A. G. Hopkins, “The New Economic History of Africa,” Journal of African History 50:2 (2009): 155-177.
Jerven, “The Wealth and Poverty of African States,” p. xii
Jerven, p. 25
Ibid.
Morten Jerven, Poor Numbers: How We Are Misled by African Development Statistics and What to Do About It? (Cornell University Press, 2013).
A. G. Hopkins, “The New Economic History of Africa,” The Journal of African History 50:2 (2009): 155-177.
Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review 91:5 (2001), 1369-1401; Nathan Nunn and Leonard Wantchekon, “The Slave Trade and the Origins of Mistrust in Africa,” American Economic Review 101:7 (2011): 3221-3252.
Gareth Austin, “The reversal of fortune thesis and the compression of history: Perspectives from African and Comparative Economic History,” Journal of International Development 20:8 (2008): 996-1027.
Giovanni Arrighi, “The African Crisis,” New Left Review 15 (2002): 5-36; Colin Leys, “Confronting the African Tragedy,” New Left Review 1/204 (1994): 33-47.
“The Hopeless Continent,” The Economist May 13, 2000.
“Africa Rising,” The Economist December 3, 2011.
“Africa Rising,” The Economist December 3, 2011. https://www.economist.com/leaders/2011/12/03/africa-rising.
Data, The World Bank “GDP Growth (annual %), 2000-2019,” https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2019&start=2000.
Ewout Frankema and Marlous van Waijenburg, “Africa Rising? A Historical Perspective,” African Affairs 117/469 (2018): 543-568; Declan Walsh and Abdi Latif Dahir, “Why is Ethiopia at War with Itself?” New York Times (March 16, 2022): https://www.nytimes.com/article/ethiopia-tigray-conflict-explained.html.
Jerven, The Wealth and Poverty of African States p. 68.
Jerven, The Wealth and Poverty of African States p. 73 and Jerven, Poor Numbers.
F. Bourguignon and C. Morrisson, “Inequality Among World Citizens: 1820-1992,” American Economic Review 92:4 (2002): 739.
E. Frankema and M. van Waijenburg, “African Real Wages in Asian Perspective, 1880-1940,” Working Paper No. 2 Center for Global Economic History, Utrecht University (2011).
Jerven, The Wealth and Poverty of African States p. 143.
Robert Bates, John H. Coatsworth and Jeffrey G. Williamson, “The Lost Decades: Postindependence Performance in Latin America and Africa,” The Journal of Economic History 67:4 (2007): 917-943.
Ewout Frankema and Marlous van Waijenburg, “Africa Rising? A Historical Perspective,” African Affairs 117/469 (2018): 547.
Giovanni Arrighi, “The African Crisis,” New Left Review 15 (2002): 5-36. See also Colin Leys, “Confronting the African Tragedy,” New Left Review 1/204 (1994): 21-22.
Hannah Appel, “Pan-African Capital? Banks, Currencies, and Imperial Power,” Working Paper (2022).
Kevan Harris, A Social Revolution: Politics and the Welfare State in Iran (Berkeley, CA: University of California Press, 2017).
“Nigeria is Not a Poor Nation, Says Jonathan,” Vanguard (May 1, 2014): https://www.vanguardngr.com/2014/05/nigeria-poor-nation-says-jonathan/
Philip Nel, “Inequality in Africa,” in ed. Tony Binns et al, The Routledge Handbook of African Development (London, UK: Routledge, 2018), 106; Branko Milanovic, “Is Inequality in Africa Really Different?” Available at SSRN 636588 (2003).
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