(Average annual HDI growth from 2010 to 2021 https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...)
The other region which has grown fast is the China area but that may slow a bit as China de-accelerates.
Life Expectancy and Literacy rate has been growing at a significant amount in plenty of sub-Saharan Africa over the past few years, but that's from a low base. The extremely low hanging fruit will be largely caught within a decade, which will then slow down as that requires significant reforms and expansion in healthcare and education quality and availability.
Per Capita Income will still always be a significant issue though, as my earlier point still stands. You need a strong economy to further grow out, and that is largely a factor of good education as well as you need to climb up the value chain.
Climbing the value chain is hard without outside stimulus. Most countries that have seen a rapid transformation were able to do so because another country decided to mentor and invest a massive amount in the country's economic base.
There just isn't a reason to do any manufacturing or high value services in most sub-Saharan African economies. There are plenty of cheap and well integrated Asian countries right now like like Bangladesh, Cambodia, Laos, Vietnam, parts of India that can still be competitive in low manufacturing for the next 1-2 decades.
It will anyhow take 1-2 decades for some sub-Saharan countries to anyhow invest in human capital. Kenya and Tanzania have been doing some very hard work on this regard.
With Rwanda, less so if we're being honest. Flashy projects like CMU Kigali and Thailand level cleanliness aside, Rwanda hasn't been able to bring a high value industry into the country yet. It's GDP per Capita is barely $1,000, median income is around $750-780, and around 60% of public and infra investment is coming directly from foreign aid.
The business culture there is simply much less mature compared to that in Nairobi or Dar es Salaam, and what happens when Kagame dies?
The same thing happened with Ethiopia. Addis Ababa became very flashy and clean, yet the country ended up collapsing into civil war and almost a decade of development was washed away.
> other region which has grown fast is the China area
The biggest winner from an HDI growth basis was actually Türkiye. They largely caught up with Eastern Europe over the last 15-20 years, and were able to keep consistently high growth (around 5-6% GDP growth rate in average since 2009) despite hitting China in 2023 level metrics almost 15 years ago
China's growth has been amazing but it will largely slow down
>KIGALI, July 11, 2023—Rwanda’s economy grew by 9.2% in the first quarter of 2023, following 8.2% growth in 2022.
implying they are doing ok. I wish we had that sort of growth in Brexit Britain where I reside! Here we get:
>UK economy grew by 0.2% overall between April and June, after a surprisingly positive performance...
which is not quite the same.
FDI within Rwanda has actually been decreasing because of a larger pullback of donors out of Rwanda [0][1]
Most high value projects that are being built in Rwanda are being targeted at the energy sector [2]. Specifically in oil refining. The other half of major exports from Rwanda is gold, that is primarily extracted from DRC and exported from Rwanda.
Compared to its peers in East Africa, the Rwandan economy is much less complex than it should be. In all honesty, it's smokes and mirrors exacerbated by a strong PR relationship between the Rwandan govt, donors, and NGOs. You don't hear half as much about Kenya, Tanzania, or Uganda as you do about Rwanda, yet almost everything within Rwanda is basically being managed by donors, and a couple Chinese and Indian conglomerates making a quick buck [3]
> Sometimes free market economics lets countries grow without a government plan
Free Market economics still requires a formal vision or strategy to develop a country. South Korea had a formalized strategy in the 80s and 90s, China in the 90s and 2000s, India in the 2000s and 2010s, etc.
If you go purely free market, then there is no actual incentive.
Take a look at neighboring Kenya. Tanzania, and Uganda. They have actual formal industrial and Human capital development projects with the intended aim of building out that muscle locally. The kinds of programs Rwanda creates like this (eg. CMU Kigali) simply don't have an RoI. The exact same thing happened in Ethiopia.
> implying they are doing ok
High GDP growth is expected at Rwanda's stage of development. But Rwanda's rate of growth is not as impressive compared to Cambodia, Kenya, and Vietnam when they were at a similar stage to Rwanda, but with a much lower dependency on foreign aid. Hell, when Kenya was at the exact same stage as Rwanda today in the mid-2000s, they were actively building out an industrial program (eg. Cements), a services economy (eg. mPesa, microfinancing), and investing in govt run universites.
Around 1.3% of GDP growth in Rwanda can be attributed to foreign aid alone. With foreign aid, it ends up getting disbursed and managed by NGOs and Donors directly, not the government. As such, this causes a significant deficiency in institutional knowledge. This has been seen with falsified poverty alleviation and GDP growth data from Rwanda. This is a very big trap that can cause Rwanda to fail to expand beyond their existing capacity. Rwanda's extreme dependence on aid at it's current stage is developing into a form of Dutch disease.
It's already started happening with more capital leaving Rwanda than entering it [4]. When Kenya [5] and Tanzania [6] were in a similar position in the 2000s and 2010s respectively they saw net flows of capital into their countries. This is dangerous as this implies that any economic activity within Rwanda is reaped abroad.
[0] - https://issafrica.org/iss-today/could-fdi-be-rwandas-lifelin...
[1] - https://www.macrotrends.net/countries/RWA/rwanda/foreign-dir...
[2] - https://www.gov.rw/highlights/economy-and-business
[3] - https://asia.nikkei.com/Economy/China-and-India-stage-invest...
[4] - https://tradingeconomics.com/rwanda/capital-flows
I'm sticking with my hypothesis that info tech will let Africa develop faster than most expect though. AI probably even more so.
I agree that ICT will help development massively, but that's Kenya, Uganda, and to a certain extent Tanzania.
ICT makes up around 15% of Kenya's exports and 10% of Uganda's, and they've both been working hard on actually building a both a strong tech industry and a strong financial industry.
Tanzania doesn't have as same a size of tech industry as Kenya or Uganda, but has been investing a massive amount on building that muscle. They also have a fairly decent industrial economy for their relative position as a LDC.
Rwanda just doesn't have a similar base or bureaucrat class as Tanzania or Kenya or Uganda. Also, Rwanda doesn't actually have a tech industry. The handful of tech companies that are even there are Indian and Chinese run MSPs there to help Indian and Chinese conglomerates that temporarily setup shop there.
> I quite liked the concept of being the Singapore of Africa
The only reason you hear about "tech", "Singapore", and "Rwanda" in the same sentence is because they use Racepoint Global, BTP Advisers, and Portland Communicstions as their PR agency [0][1][2]. Racepoint the same company used by YC startups and a couple large public tech firms for PR and image rehabilitation and BTP Advisers has provided concierge image rehabilitation services for troubled countries like Azerbaijan, Montenegro, Qatar, and a couple conglomerates affiliated to Hezbollah. It's used as a case example of PR in MBA programs to this day. Portland Communications is a lobbying firm founded by Tony Blair's special advisors and has been used by Qatar, Israel, Russia, Singapore, Gazprom, Cisco, and Rio Tinto as well as their primary lobbyist in the EU and UK.
[0] - https://store.hbr.org/product/a-public-relations-campaign-fo...