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BREAKINGVIEWS-Review: Hustling helps Africa's partial success

Source: Reuters - Thu, 17 Apr 2014 14:14 GMT
Author: Reuters
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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Martin Hutchinson

NEW YORK, April 17 (Reuters Breakingviews) - "Kanju" makes modern Africa work. In her new book "The Bright Continent," the American journalist Dayo Olopade claims that this Yoruba word for hustling, striving and rule-breaking explains how the invisible hand outwits the dead hand of corrupt bureaucracy in much of the continent. Sadly, kanju also makes most African countries tough places to do fully organized business.

Olopade's most distinctive claim is that formality and progress are enemies in Africa. Large-scale projects get bogged down and achieve little, whether they are promoted by corrupt local governments or by multilateral aid agencies, which often have non-African agendas. In contrast, individual Africans with very limited resources are able to innovate successfully in field after field, often running around or simply flouting the central authorities' restrictions.

Olopade divides the bulk of the book into five "maps," each reflecting one way in which African economic life differs from that in the "fat" Western economies.

The first is family. While birth rates are falling in most of Africa, families are typically still large and extended networks of blood ties are crucial to business development. The reason is not merely a positive enthusiasm for working with relatives. Since the institutions which support trust among strangers in developed economies are largely lacking in Africa, it is much safer to work with people who are known and can be expected to behave well.

The second "map" is technology, in particular the mobile communications which have revolutionized African possibilities. Olopade begins the book with a paean to the "Yahoo Boys," the Nigerian scam artists of the late 1990s who used the newly available internet and their native kanju to appropriate considerable resources.

The author's praise is, however, one-sided. "Kanju" is fine as far as it goes, but it does not go far enough to build a stable, wealthy society. The term Yahoo Boys can be traced back to the gross and cruel Yahoos of Jonathan Swift's "Gulliver's Travels." Modern prosperity, however, relies on people acting more like Swift's Houyhnhnms, intelligent horses who are governed by reason and have high standards of integrity.

Then comes commerce. Olopade goes into considerable detail on how Africans do business. They rely heavily on improvisation. One important point is that in spite of official aid and numerous microfinance schemes, finance remains scarce in the medium-sized sector, the part of the economy that should be leading the way to development. Perhaps some more formal organization would help.

Resources are her fourth "map." Although Africa has abundant natural riches, they are badly exploited. Olopade argues for more local innovations to tap them effectively. Crop yields could be improved without relying on inefficient state-controlled agriculture extension services. Similarly, local entrepreneurs could provide electricity in areas the state system has not reached.

Finally, Olopade outlines how Africa's youthful demographics require new approaches to education but give hope for further progress, as Africa's young citizens find ways round the rent-seeking blocks created by the elderly "hippos" of the existing power structure.

Olopade's book is less a defense of free markets than an ode to the virtues of the small in economics. She rejoices in successful cooperatives and well-designed aid programs but generally rejects large-scale entities, whether states, global aid institutions or multinational corporations.

The author gives a multitude of examples and a huge mass of fascinating detail. Her case is persuasive, although as Africa grows richer, reforming its formal organizations becomes at least as important as creating informal ones. But for anyone who wants to understand how the African economy really works, "The Bright Continent" is a good place to start.

CONTEXT NEWS

- "The Bright Continent: Breaking Rules and Making Change in Modern Africa" by Dayo Olopade was published by Houghton Mifflin Harcourt in March.

- For previous columns by the author, Reuters customers can click on (Editing by Edward Hadas and Martin Langfield)

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