An outline, era by era

Economic growth and demographic boom

21st Century · 2000 – present

Since about 2000, Africa has combined faster economic growth in many countries with the world's fastest population growth. The continent's population passed one billion around 2009 and is now well over 1.4 billion. Sub-Saharan Africa has the highest fertility rates anywhere, and its cities, such as Lagos, Kinshasa and Addis Ababa, are growing very quickly.

Growth was uneven. A commodity boom, debt relief, new investment from China and elsewhere, mobile phones and better governance in some states helped lift output after the stagnation of the 1980s and 1990s. Growth slowed after 2014 and the COVID-19 pandemic, and many people remain poor. Africa's young population could bring a demographic dividend of more workers, but only if enough jobs, schools and health services are created. This entry covers the economic turn and the population surge, and how historians and economists read them.

Things happened, and the rest is history

  1. Debt relief for the poorest countries

    Event

    What happened

    In 1996 the IMF and World Bank launch the Heavily Indebted Poor Countries initiative, enlarged in 1999. In 2005 the G8 agrees at Gleneagles to cancel multilateral debts of eligible countries, and the Multilateral Debt Relief Initiative follows in 2006. Most of the countries that qualify are in Africa.

    The rest is history

    Debt cancellation freed government budgets that had been spent on repayments, and many states raised spending on schools and clinics. Economists broadly agree it helped, though they debate how much it explains the growth of the 2000s. Some countries later borrowed heavily again, through bonds and bilateral loans.

    Sources

    1. BookEasterly, William. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, MA: MIT Press, 2001.
    2. PrimaryGleneagles Communiqué. G8 summit statement, Gleneagles, Scotland, 8 July 2005.

  2. The commodity boom and the 'Africa rising' decade

    Event

    What happened

    From about 2000 to 2014, demand from fast-growing Asian economies, especially China, pushes up prices of oil, metals and other raw materials. Many African economies grow at around 5 percent a year or more, far faster than in the 1990s. Angola, Ethiopia, Ghana, Nigeria and Rwanda are among the fast growers.

    The rest is history

    In 2011 The Economist ran a cover headlined 'Africa rising'. When commodity prices fell sharply in 2014 to 2016, growth slowed, and oil and metal exporters were hit hardest. Analysts still debate how far the boom changed economies, since many remained dependent on a few exports.

    Sources

    1. BookRadelet, Steven. Emerging Africa: How 17 Countries Are Leading the Way. Washington, DC: Center for Global Development, 2010.
    2. BookCollier, Paul. The Plundered Planet: Why We Must, and How We Can, Manage Nature for Global Prosperity. Oxford: Oxford University Press, 2010.

  3. China's growing role in Africa

    Event

    What happened

    China holds the first Forum on China-Africa Cooperation in Beijing in 2000. Chinese firms and banks then finance roads, railways, ports and power plants across the continent, and China becomes Africa's largest single trading partner around 2009. Projects such as the Addis Ababa to Djibouti railway, opened in 2016, are built with Chinese loans.

    The rest is history

    The investment filled a gap in infrastructure and gave African governments an alternative to Western lenders. It also raised concerns about debt and about labour and environmental practices, which researchers say vary widely by country and project. Studies find the picture is more mixed than either praise or criticism suggests.

    Sources

    1. BookBrautigam, Deborah. The Dragon's Gift: The Real Story of China in Africa. Oxford: Oxford University Press, 2009.
    2. PrimaryForum on China-Africa Cooperation, Beijing Declaration. Declaration of the first ministerial conference, Beijing, October 2000.

  4. The mobile phone revolution

    Event

    What happened

    In the late 1990s few Africans have a telephone line. After mobile networks are licensed and expand in the 2000s, subscriptions rise from a few million to hundreds of millions. In 2007 the Kenyan operator Safaricom launches the M-Pesa mobile money service.

    The rest is history

    M-Pesa let people send and store money by phone without a bank account, and similar services spread across many countries. Studies in Kenya linked mobile money to gains for households, though researchers debate the size. Mobile networks leapfrogged the old landline system, much as the title of one common phrase suggests.

    Sources

    1. ArticleJack, William, and Tavneet Suri. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution." American Economic Review 104, no. 1 (2014): 183-223.

  5. The population passes one billion

    Event

    What happened

    Africa's population grows from about 800 million in 2000 to over one billion around 2009. Death rates fall thanks to better child health, vaccination and the control of diseases such as malaria, while birth rates in sub-Saharan Africa fall only slowly. Fertility is still around four to five children per woman in much of the region.

    The rest is history

    United Nations projections suggest Africa could hold about a quarter of the world's people by 2050 and more later in the century. Demographers call the fertility decline slower than in Asia, with causes such as girls' schooling, family planning and urbanisation under study. Nigeria, Ethiopia and the Democratic Republic of the Congo are among the largest populations.

    Sources

    1. PrimaryWorld Population Prospects. United Nations Department of Economic and Social Affairs, Population Division, biennial revisions from 2000.
    2. BookBloom, David E., David Canning, and Jaypee Sevilla. The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change. Santa Monica: RAND, 2003.

  6. Rapid urbanisation

    Event

    What happened

    Africa's cities grow quickly from 2000 onwards as people move from farms and as urban populations rise by natural increase. Lagos, Kinshasa, Luanda and Dar es Salaam grow to millions of inhabitants. Many new residents live in informal settlements with limited water, sanitation and transport.

    The rest is history

    Cities concentrate trade, services and jobs, and in other regions urbanisation has been tied to rising incomes. In Africa it has often happened at lower incomes and with weaker industry, which some economists call urbanisation without industrialisation. How well cities are planned is seen as central to how the boom turns out.

    Sources

    1. BookFreund, Bill. The African City: A History. Cambridge: Cambridge University Press, 2007.
    2. ArticleGollin, Douglas, Remi Jedwab, and Dietrich Vollrath. "Urbanization with and without Industrialization." Journal of Economic Growth 21, no. 1 (2016): 35-70.

  7. The African Union and the free trade area

    Event

    What happened

    The African Union replaces the Organisation of African Unity in 2002. In 2018 member states sign the agreement creating the African Continental Free Trade Area, which enters into force in 2019, with trading starting in 2021. It aims to cut tariffs on trade among African countries.

    The rest is history

    Trade between African countries has been a small share of their total trade. Supporters expect the area to raise it and encourage manufacturing, while analysts note that poor roads, border delays and non-tariff barriers must also be dealt with. Most African states have signed the agreement.

    Sources

    1. PrimaryAgreement Establishing the African Continental Free Trade Area. Treaty signed at Kigali, 21 March 2018.
    2. PrimaryConstitutive Act of the African Union. Treaty adopted at Lomé, 11 July 2000, in force 2001.

  8. Slowdown after 2014 and the pandemic

    Event

    What happened

    After commodity prices fall in 2014, growth in sub-Saharan Africa slows, and in 2016 it falls close to the rate of population growth. In 2020 the COVID-19 pandemic brings the first region-wide recession in about a quarter of a century. Public debt then rises in many countries.

    The rest is history

    The slowdown showed how dependent growth had been on raw materials. Debt problems led Zambia, Ghana and Ethiopia to seek restructuring in the early 2020s. With a young and growing workforce, the question is whether jobs will keep pace, a central issue for the decades ahead.

    Sources

    1. PrimaryRegional Economic Outlook: Sub-Saharan Africa. International Monetary Fund, annual reports, 2015 to 2023.

  9. Africa's 'untapped' demographic dividend

    Popular belief

    The legend

    Many people say that Africa's young population will automatically bring an economic miracle like East Asia's, since more workers means more growth. Africa is often described as the continent of the future for this reason.

    The rest is history

    The demographic dividend is a real idea. It describes how growth can rise when the share of working-age people grows relative to dependants. But economists such as Bloom and colleagues stress it is not automatic: it needs falling fertility, education, health and enough jobs. East Asia's rise in the late twentieth century followed such conditions. Without them, a large youth population can mean unemployment instead.

    Sources

    1. BookBloom, David E., David Canning, and Jaypee Sevilla. The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change. Santa Monica: RAND, 2003.

  10. Africa as one country

    Popular belief

    The legend

    Africa is often talked about as if it were a single country with one economy, one poverty problem and one story of growth.

    The rest is history

    Africa has 54 countries with very different incomes, resources and politics. Growth since 2000 has differed widely, from fast performers such as Rwanda and Ethiopia to conflict-hit states. Fertility also varies, with North Africa and southern Africa far lower than the Sahel. Historians and economists therefore warn against continent-wide generalisations.

    Sources

    1. BookAustin, Gareth. Economic Development and Environmental History in the Anthropocene: Perspectives on Asia and Africa. London: Bloomsbury, 2017.

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