Nextier Insights

Africa has failed to launch despite its rich human and natural resources.  Indeed, it is stuck in a vortex of armed conflicts, food and energy insecurity, inflation and mounting debts, shrinking civic spaces, intensifying effects of climate change, etc.  Despite being the primary source of the critical resources driving the Fourth Industrial Revolution (lithium, for instance), the continent may miss this opportunity as it did during the earlier economic transitions

The Africa Industrialisation Day allows the continent to stop and reflect on its development journey.  The imperatives of structural transformation, poverty alleviation, and income equality underpin the urgency for African countries to transition towards industrial economies.  The shift from agrarian and resource-dependent economies to industrial economies is not merely an option but a requisite for Africa’s progress and prosperity.

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That President Paul Kagame has done well for Rwanda is evident when one arrives at Kigali International Airport.  You can tell a lot about a country from the airport staff.  The Rwandese were professional and courteous—no glad-handing or posturing for a shakedown.  The taxi ranks were organised.  The street sweepers worked even at midnight, and a young lady felt safe walking alone at that witching hour.  However, there was a veneer of unease in the city.  Neither my taxi drivers nor conference participants felt comfortable discussing Rwanda’s socioeconomic realities or outlook.  Any questions on Kagame met with silence or a polite subject change.

The unease is not entirely misplaced.  Paul Kagame rules with a strong velvet touch.  Rwanda is a one-party state where Kagame secured over 98 percent of the votes in the 2017 elections.  You wouldn’t be wrong if our thoughts veered to Mobutu Sese Seko and other dictators who enjoyed such lavish love from their people.  However, if Kagame is so loved, why did he go through the troubles of jailing opposition voices like Victoire Ingabire?

Recently, the President announced his decision to run for a fourth term in office.  His 2015 Constitutional Amendment changed the presidential term and opened the door for this declaration.  You probably know where this story is going.  Kagame will become a president-for-life if he so desires.  In a recent interview, he appreciated the confidence Rwandans have shown him and declared that he will always serve them.  In effect, Kagame has moved from democrat to dictator.  One can expect him to continue consolidating absolute power, with his government becoming increasingly intolerant of dissent.  That’s the way this cock crows.

What does this reality mean for Rwanda’s future?  How will the economy fare under a full-fledged dictatorship?  Should (or can) Kagame retrace his steps?

Scholars can’t seem to agree on answers to the above questions, especially on the impact of autocracy and democracy on economic growth.  Both forms of government can deliver strong economic growth.  For instance, Olson (1993) posits that dictatorships can produce strong economic growth, especially if the leader is a “stationary bandit,” limiting his interests to his territory and focusing on delivering domestic order and public goods.  Likewise, a democratic leader with similar developmental instincts can provide comparable results.

On the other hand, both forms of government can hurt development.  Olson (1993) posits that a dictator with a short-term outlook can harm the economy, especially if he abuses personal property rights.  Likewise, democracy can hurt development if the leaders engage in distortionary redistributions (Alesina and Rodrik, 1994).  Furthermore, interest groups can lead to sub-optimal economic choices and stagnation (Olson, 1982).  This point holds in both a dictatorship and a democracy.  President Buhari’s regime, from 2015 to 2023, presents a more recent example of how a “cabal” influenced poor economic choices and delivered worse outcomes for the people.

However, Acemoglu and Robinson (2012) is more definitive in its argument that democracy is a preferred form of governance.  Inherent in its design are elements that can check a leader’s kleptomania and monopolising instincts.  It expects that routine elections empower the people to decide the type of government they desire.  However, juvenile democracies, as can be found in Africa, have been ineffective in reining in their leaders even with routine elections.

The question, therefore, is whether a leader can safely straddle democracy and dictatorship.  These benevolent dictatorships are alluring, especially for Africans.  A 2021 Afrobarometer study found that 65 percent of South Africans might give up democracy and live under a non-elected leader if they “could impose law and order and deliver houses and jobs.”  Similar sentiments exist across Africa for a government that can solve the people’s pressing needs.

One can understand the allure of these benevolent dictators, ‘leaders in non-democratic polities who receive credit for high growth’ (Easterly, 2011).  It is much easier to understand when the benevolent dictator is Lee Kuan Yew (Singapore), Kemal Ataturk (Tukiye), Thomas Sankara (Burkina Faso), Simon Bolivar (Venezuela) or even Marcus Aurelius (Rome, 161 CE), for lovers of the movie, ‘Gladiator.’  Some die-hard defenders of this form of government are willing to accept leaders such as Augusto Pinochet (Chile), who, though he delivered impressive economic growth, was notorious for using torture and murder to suppress dissent.  Such acceptance is easier when the victims are just statistical numbers, not relations.

An intelligent, benevolent dictator may seek to avoid the known pitfalls.  The challenge is that the dictatorial pull is usually more potent than the benevolent one, especially in the face of increasing socioeconomic pressures.  Dictatorships, no matter how benign, soon teeters towards repression.  Furthermore, the dictator who strives to maintain an open attitude risks being perceived as weak.  His enemies will move to overthrow his regime.  Consider how Perestroika and Glasnost weakened Mikhail Gorbachev’s hold on Russia, led to the resurgence of Russian nationalism, and, ultimately, the end of the Soviet Union.

More importantly, successful societies are not built on a leader’s benevolence.  They germinate from and take root in a “system” that delivers the best for a greater number of people.  The system does not have to be perfect or be peopled by saints.  It just has to have the safeguards to prevent abuse.  Therein lies the lesson for Kagame.  Governance can’t be about the leaders, irrespective of how well-intentioned they are. 

Kagame is stuck in the same bog that confronted other great leaders.  Such leaders desired a little more time in government to complete their success story.  They feared their successors may not share the same vision and zeal.  George Washington faced the same dilemma but rose above it.  Olusegun Obasanjo, one of Nigeria’s most outstanding leaders, faced the same difficulty but succumbed to it.  He needed a few more years to consolidate his wins, but he was bound by the term limits entrenched in the Constitution.  His efforts to surreptitiously change the Constitution failed.  However, given how poorly subsequent Nigerian administrations have fared, one may regret that Obasanjo didn’t get the extension.  But one must banish that thought.  No matter how painful life has been under these regimes, what is essential is that the country strives to build a system that delivers the desired outcomes but is not centred around demigods or imbued by practices that dispose the system to a dictatorship or other forms of illiberal governments.

Like most budding dictators, Kagame knows the road ahead is treacherous.  He should accept that there is no justification for a benevolent dictator.  That option is like riding a tiger.  He will ultimately end up in the belly of the beast.  History is replete with several examples of leaders who rode high and then crashed.

Furthermore, Kagame must realise that he will face increased political risks as he ages.  In their paper, “No Country for Old Men: Aging Dictators and Economic Growth,” Richard Jong-A-Pin and Jochen O. Mieran show that as dictators grow older, their time horizon decreases, resulting in less investments in productive capital and, therefore, less economic growth.  Decreased economic performance will create additional impetus for increased political attacks, resulting in increased dictatorial tendencies and a vicious circle that spirals to destruction.

Democracy – and its institutions – can be challenging to navigate, especially in developing countries, but nations must stick with it.  The people shortchange themselves when they see democracy as just a form of government or a tool for delivering public goods.  It is not.  Democracy is a set of philosophies that define a way of life.  Duncan (1943) defines it as a “respect for human personality, a belief that human beings should be regarded as ends in themselves, and should not be regarded as mere tools to achieve the ends and purposes of a privileged and powerful few.”  This point appears to be missing in the Kagame argument.  While one acknowledges, with pride, his accomplishments for Rwandans (and, one may dare say, Africans), one is also pained that he has succumbed to the deplorable urge to sit tight in government.  How genuine his intentions may be to improve his people’s lives is irrelevant.  Dictatorships always underdeliver in the long run.

There is still time for Paul Kagame to correct his misstep.  More than likely, he will win the next election.  He should use the next seven-year term (2024-2031) to build a robust pipeline of potential successors.  This lineup should include those who helped to create and implement Rwanda’s development vision.  Despite the damage he has done to Rwanda’s democratic institutions, Kagame should bequeath a respect for democratic rules and institutions.  This need is as vital as delivering development outcomes.  He should make it the core focus of his fourth and final term in office.  That may be his most incredible legacy.  However, if history is anything to go by, he won’t.  These dictatorship stories usually end the same way.  Badly.

Patrick O. Okigbo III

October 02, 2023

References

Acemoglu, D. and Robinson, J. (2012). Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown.

Alesina, A. and Rodrik, D. (1994). ‘Distributive politics and economic growth’. The Quarterly Journal of Economics, 109: 465-490.  Available at: https://dash.harvard.edu/bitstream/handle/1/4551798/alesina_distributive.pdf

Duncan, W.G.K., 1934. Democracy or Dictatorship: Is It a Real Alternative?. The Australian Quarterly, 6(22), pp.51-60.  Available at: https://www.jstor.org/stable/20629129

Easterly, W., 2011. Benevolent autocrats. Working Paper, Development Research Institute, New York University, New York. Available at: https://williameasterly.files.wordpress.com/2011/05/benevolent-autocrats-easterly-2nd-draft.pdf

Jong-A-Pin, R. and Mierau, J.O., 2011. No country for old men: Aging dictators and economic growth. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1944146

Olson, M. (1982). The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven, CT: Yale University Press.

Olson, M. (1993). ‘Dictatorship, democracy and development’, American Political Science Review, 87(3): 567-576.

Although the poor can be found in every country, increasingly, poverty has an African face.  Even as the global population grew, the number of people living in extreme poverty drastically declined by almost 70 percent, from 2 billion in 1990 to about 0.65 billion in 2019.  Over the last four decades, China performed a modern-day miracle by lifting 800 million citizens from poverty.  However, in the same period, extreme poverty increased in Sub-Saharan Africa by 43 percent, from 271.5 million in 1990 to 389 million in 2019.

Poverty and its causes continue to confound scholars and policymakers.  This point is not for want of scholarship on why Africa is poor.  Indeed, a recent book by Charlie Robertson situates the argument on education, electricity, and fertility rates.  He suggested that a nation cannot take off unless it has at least a 40 percent literacy rate and can’t industrialise without a 70 to 80 percent literacy rate.  Furthermore, nations can’t industrialise without electricity.  Nigeria will maintain the shameful moniker – “Poverty Capital of the World” – as long as its electricity consumption per capita remains as low as 140 kWh/ha (2021), almost three times lower than the average for Sub-Saharan Africa.  Similarly, high fertility rates, as seen in Africa, mean that the continent can’t put away enough financial savings to reduce its cost of capital and improve its ability to fund enterprise. Several other scholars, including the recent book by Yasheng Huang, suggest that mass education is the building block for national development, which is needed to address poverty.

While several governments may agree with these arguments, many choose ineffective pathways to achieve their development goals.  One of the significant challenges is the disconnect between the governments and the people.  The policy wonks sit in their ivory towers and divine what is best for the poor but rarely engage with them to figure out how best to help them exit the quicksand.  In “Intellectuals and Society,” Thomas Sowell forcefully argued that these intellectuals have, on average, done worse for society, especially when they do not engage with those their ideas are supposed to help.

Take, for instance, “free” public education.  Several intellectuals continue to push this model as effective for achieving mass education.  While this idea is appealing, mainly because it wins votes, it has failed to deliver the required success.  The inherent principal-agent problem (between the government and the public school administrators and workers) results in a misalignment of incentives.  James Tooley, in his book, “The Beautiful Tree: A Personal Journey Into How the World’s Poorest People Are Educating Themselves,” provides evidence from Nigeria, Ghana, India, China, etc., on how free public schools consistently failed to deliver results.  These solutions came from talking to the poor.  His arguments for private schools for educating the poor provide new investment frontiers and an exciting solution to the perennial problem.  Nobel Laureate Professor Michael Kremer’s recent review of one such investment in Nairobi (Kenya) should elicit interest from governments across the continent.

The 2023 International Day for the Eradication of Poverty calls for universal access to decent work and social protection to uphold human dignity for all people.  Several African governments genuinely desire to achieve these lofty goals.  Yet, they continue to approach it the wrong way.  They rely on “intellectuals” who may not invest enough time to understand the challenges or who fail to engage with the poor as they divine the potential solutions.  Actively engaging with various stakeholders is critical to avoiding cognitive biases. These engagements provide an opportunity to “learn and understand.”

Africa has innovative, homegrown, and evidence-based solutions to its pressing challenges.  A 2015 paper by Patricia Agupusi and Chukwumerije Okereke argues that the challenge could be a lack of “political and collective will” to implement the solutions.  At Nextier, we continue to encourage our partners at the national and sub-national levels to steel their backbones and implement these solutions.  Therein lies the answers to the myriad development challenges, including poverty.

If you want to learn more about how Nextier contributes to addressing Africa’s poverty challenge, please check out our website: www.thenextier.com or email info@thenextier.com.

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