The power of media is so great that it can tell you a different reality about yourself and make you believe it. You probably got many “facts” wrong about Africa. Whether you are an African or not doesn’t make much of a difference. Your twitter feed only reinforces your long held misperceptions about Africa that do not match the reality.
You may think Africa is the worst in terms of peace and inequality. You may also believe it to be a black hole of aid and unfriendly for business that only China is attracted enough to invest (and only in mineral extraction, off course). You are not to blame, that is what you were led to believe by the media. Well, here are 5 facts that may surprise you and maybe lead you to find more.
1. The most conflict-prone continent? Not really
Contrary to what you are forced to believe, there are in fact more conflicts in Asia than in Africa. For example, the average annual number of armed conflicts from 2006-2012 was 11 and 14 in Africa and Asia, respectively. Yet by focusing more attention and coverage than in other regions, the media conspicuously accord a higher “risk premium” to the conflicts in Africa.
2. Africa gives back every cent it gets in “Aid”
The established thinking is that the West has been incessantly pouring money into Africa through aid and other private-sector flows without getting much in return. However, this perception does not take into account the huge sums of money that flow illegally out of Africa by Western firms financial institutions with the complicity of African officials.
Estimates of illicit financial outflows, conservative at best, put the annual outflow through trade mispricing alone close to $60 billion. in illicit financial flows over the 39 year period (–2008), which corresponds to a yearly average of about $22 billion. Cumulatively, total outflows of the last four decades, between 1970 and 2008, amounted to $854 billion and were equivalent to nearly all the official development assistance (ODA) received by Africa in the same period.
3. Not business friendly? To the contrary
Contrary to perceptions, the business environment is rapidly improving, with many African countries ranked among the world’s best. Seventeen out of the 50 countries that have made the greatest progress in their business environment are from Africa, higher than in any other region. Eight of these countries were ranked ahead of mainland China, 11 ahead of Russia, 16 ahead of Brazil and 17 were ranked ahead of India.
4. Not just China, half of the 20 top countries attracting western corporations are in Africa
The positive business environment in Africa has not gone unnoticed by private investors across the globe. African countries make up half of the 20 top global frontier markets that American and European multinational corporations are most interested in investing in. Asia and the Middle East each only have three countries in this ranking, while Latin America has two. Nigeria tops the list of the global frontier markets, while other countries, Angola, Ethiopia, Ghana and Kenya, are in the top 10.
5. Investment to Africa is not mainly for mineral extraction
New investments are diversifying largely into the services and manufacturing sectors, diluting the dominance of resource-rich destinations. Only 65% of total FDI flows in 2013 went to resource-rich countries— down from 78% in 2008. In the meantime, non-resource-rich countries’ have doubled the contribution of FDI to their GDP to 4.5% since the early 2000s, reflecting their rising share.
Data Sources: UNECA, UNCTAD.