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Chinese honor guard stand in formation as the plane carrying Kenya's President William Ruto arrives at the VIP terminal of the Beijing Capital International Airport in Beijing, China, September 2, 2024, ahead of the China Africa Forum.
African leaders gather to hear Beijing’s pitch
Leaders from 50 African nations are expected to gather in Beijing on Wednesday for the 9th triennial China-Africa Cooperation summit — aimed at deepening strategic coordination between China and Africa – but China’s ongoing economic woes have shifted the tone considerably.
The background: These fora used to be an opportunity for Beijing to splash the cash about, but spending peaked after the 2015 summit, which promised some $60 billion in loans and investments over 3 years. By comparison, Chinese loans in Africa totaled just $4.61 billion in 2023 — and Beijing’s guests will want to hear why pledges from the 2021 summit to buy $300 billion in goods from Africa have gone unfulfilled.
Beijing will also need to reassure its partners about several incomplete infrastructure projects, including a major rail project to link East African population and industrial centers.
What’s the pitch? Beijing wants to sell a vision of a green economy future powered by African minerals supplying Chinese manufacturers. But Beijing isn’t alone: Africa’s role in the global economy is only set to grow more important in the 21st century, and the US, UK, South Korea, Italy, and Russia have all set up African summits in recent years. We’re watching how China’s overtures are received.Graphic Truth: Infant mortality in the OECD
American parents are more than four times as likely as their peers in Estonia to lose a baby during or shortly after birth. It is one of the most devastating human experiences – and a key indicator of a country’s development. After all, if even the most vulnerable babies survive, the healthcare system must be doing something right. By that metric, the US looks more like Chile or Slovakia than the global superpower it is.
And it’s not just babies who are more at risk in the US. A study from the Commonwealth Foundation found that American mothers are twice as likely to die during or shortly after childbirth than their Canadian peers, and more than 10 times as likely as women in New Zealand.
Part of the problem comes down to a shortage of care for expectant mothers. The US has about 15 gynecologists per 1,000 live births, compared to 54 in the UK and 78 in Sweden. That means less attentive care during and after pregnancy, which can lead to early warnings going overlooked.
Students read Koranic verses at a madrasa, or Koranic school, in Dhusamareeb, central Somalia, December 16, 2012.
IMF says economic picture is rosy, but how does it look from the bottom?
Inflation looks set to fall globally, and a global recession is unlikely in 2024, according to the IMF’s April update to the World Economic Outlook. That so-called “soft landing” is great news for those in New York or Paris, but what does the picture look like from the most vulnerable economies?
Money has been tight for developing countries in sub-Saharan Africa, in particular, with many over-indebted states are only just returning to capital markets after COVID-19’s economic knock-ons shut them out, and face dim medium-term growth prospects.
IMF Chief Economist Pierre-Olivier Gourinchas told the IMF/World Bank Spring Meetings in Washington, DC, that low-income countries should focus on structural reforms to make their economies and governments more efficient.
“This will help lower borrowing costs and reduce funding needs,” he said, adding that such countries should lean into their demographic advantages and “improve the human capital of their large, young populations, especially as the rest of the world is aging rapidly.”
That’s easier said than done, but the IMF can point to a massive success story: Somalia. In December last year, Mogadishu was able to discharge some 90% of its external debt after meeting the specifications of an IMF program called the Heavily Indebted Poor Countries Initiative. That achievement followed years of hard work by Mogadishu.
In 2012, decades of war had left Somalia’s federal government barely functional and without a proper budget. If salaries were paid, it was through unaccountable cash. But now, it has fully digitized payroll, invoice tracking systems, and cash management tools, all of which have helped Somalia massively increase social spending, from $8 per person per year a decade ago to $48 per person per year today.
Such success in a fragile country has raised hopes that the model can be exported. But Somali Finance Minister Bihi Iman Egeh cautions that his country’s program “was only successful because it reflected Somalia’s needs and priorities,” meaning other countries need to tailor the approach to suit their unique challenges.
Building broad consensus meant “the economic reform program was among the few common national priorities that was elevated above our lively national politics,” said Egeh. “It was a successful unifying national exercise.”
Ghana, Accra, 2023-02-16. Young schoolchildren in uniform learning multiplication tables. Illustration image of children in a school in Ghana. A little girl is at the blackboard reciting in front of the class.
To get rich, Ghana needs to wise up
About a quarter of all the chocolate you eat comes from Ghanaian cacao, so with prices at all-time highs, Ghanaian farmers should be raking it in. Instead, they’re selling at fixed prices to a government that’s struggling to settle its debts after a crushing $30 billion default last year.
On Monday, Ghana failed to reach a debt deal to restructure $13 billion in debt, breaching the terms of its International Monetary Fund bailout and pushing the country to the brink. According to the IMF, Ghana is borrowing too much in the same high-interest rate environment that led to the original default. If the government cannot formulate a plan that meets IMF standards, it risks $360 million in upcoming relief.
Nonetheless, the IMF is optimistic that the children of today’s cacao farmers will be driving the global economy in a decade or two. “The 21st century will be the African century,” said economist Michele Fornino on Monday at the IMF/World Bank spring meetings in Washington, DC. He pointed to the increasing numbers of young Africans joining the global workforce, contrasting it with the population slowdowns in Europe, East Asia, and North America that will diminish their economic clout.
But it all depends on getting those kids to school. About one in four children in Ghana is unable to attend school, a rate well below other developing countries. Improving that number will be crucial but difficult if Ghana stays trapped in perpetual cycles of debt and default.
Fornino pointed to South Korea, once among the poorest countries in the world before the vaunted “Miracle on the Han River” transformed it into a wealthy, globally connected society. “South Korean GDP would be one-third of what it is today without the improvements in education that began in 1970,” he said, and the IMF’s long-term goal is to help Ghana and other African countries make the most of similar demographic dividends.