Merryn Somerset Webb talks to Alex Perry about the opportunities in Africa's vibrant, innovative economy and thecorrupting influence of the global aid industry.
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Merryn: Hi. I'm Merryn Somerset Webb, editor-in-chief of MoneyWeek magazine. And I am here today with Alex Perry, author of this new book, The Rift: A New Africa Breaks Free. Now, the premise of this book is that Africa is not the place of misery that the Western media like to paint it as, but more a place of great excitement and potential. But, Alex, I'm going to start by asking you about the origins of this book. You reported in Africa for going on a decade.
Merryn: What kicked things off there for you?
Alex: Essentially from the moment I got there
Merryn: And you sorry you went as a magazine journalist, correct?
Alex: Yes. I was Africa bureau chief for Time magazine. As I say, from the moment I got there I realised that everything I'd thought I knew about Africa was off. In the West we have a very narrow view that is essentially famine, war, starving babies with flies in their eyes
Merryn: Helped along by Oxfam of course.
Alex: Right. Well, exactly and that view is delivered to us by the aid industry, which is an industry these days. In fact, it's the biggest business in Africa. It's $55.8bn a year, which is equivalent to the GDP of the 20 poorest countries in Africa. It's massive, and that weight and finance and resources buys a lot of acreage in newspapers and on billboards in the West telling us what we think about Africa and for 50 years the message hasn't changed really. Africa is a starving baby, and when I arrived in Africa, I found myself just from asking around and seeing what was going on that I was covering not an implosion in Rwanda but Rwanda's extraordinary revival; not a famine in Ethiopia but food traders who were the first yuppies in Ethiopia working on Africa's first commodities exchange. It wasn't about sunsets and savannahs in Kenya. It was about Silicon Savannah, the Nairobi tech seed.
So, over time I built up a certain amount of anger almost with the way that Africa was being perceived and which kind of coalesced into a book as I went along but was particularly sparked by covering the famine in Somalia in 2011, which was the most extraordinary misrepresentation. This was portrayed in the UK you probably remember it. It was a quarter of a million people died and this was a famine that was blanketed across newspapers and billboards in London and we were all urged to give billions to help save starving Africans, which we did. $1.8bn was raised and really without much investigation at all a few days of reporting on the ground in Mogadishu it became apparent that that story of African helplessness and Western beneficence was completely wrong. That famine was deliberately caused by the US prosecuting the war on terror that wanted to starve out a small little Islamist group in southern Somalia called Al-Shabaab and it had bullied the aid agencies into imposing a food aid ban on southern Somalia and the plan had worked too well. Instead of just targeting 3,000 guerrillas, three million people have been plunged into famine and
Merryn: Hang on. But these people were reliant on food aid in the first place.
Alex: No. They weren't and so
Merryn: So, when you say that there
Alex: Well, there was some food aid going in and the argument that the US made to the agencies and to which the agencies sort of capitulated was, Al-Shabaab steals food aid, so therefore you can make the case that food aid is a form of support to a proscribed terrorist group, which is an extremely serious offence in the US. The aid agencies to give them their due did object to this argument. The US from what I understand reminded them that it was their biggest donor and that was that and that the US realised actually what was going on and that its plan had worked horribly well, and rescinded its aid ban in July 2011, but by then it was too late. Food aid takes two months to transport around the world and as I say a quarter of a million people died, but
Merryn: No. I suppose the point that I'm interested in is the very beginning of this story, which was you were saying initially that this wasn't a story about helplessness of Africa.
Merryn: But then you go on to say that in fact these people were already dependent on food aid and without the food aid so, the withdrawal of the food aid caused the famine.
Alex: Well, what I'm saying in this famine, which seemed to reinforce a long-held presumption that Africans starve in the same way that Russians drink and Arabs argue and whatever this is what Africans do. Well, this is the one famine in fact there has been in this millennium in Africa and its causes were very special and that, combined with the sort of outrageous death toll the scales fall from your eyes. You realise that this story is just way more complicated than a starving baby, which let's face it infantilises a whole continent.
Merryn: Yes. So, part of your thesis is that the aid business is so huge and the way the aid business sustains itself and keeps going is by spreading this myth of infant Africa that needs endless support from the West. So, the pictures of starving
Alex: Aid's business is crisis, right?
Merryn: Yes. So, the starving babies are the interest of the aid business is to have us consistently believe that there is ongoing crisis so that we keep paying so the aid workers stay in business basically.
Alex: Sure, and yes. I mean, look.
Merryn: This is horrible.
Alex: It is. You know, these aid workers are generally well-intentioned, quite reasonable people, and understand all these flaws quite well. I mean, many aid workers are my friends. I went to a UN conference a couple of years ago where exactly this kind of stuff was being discussed and I was amazed because I was brought into this meeting of 50 leading lights of the aid world to be an agent provocateur and ask them accusing questions and I didn't need to ask any.
Everybody understood this. Everybody understood that aid had a real legitimacy problem; particularly the idea that aid workers were essentially telling Africa's story for it and were getting it wrong and also in the sense that aid workers still worked to a very old-fashioned model, which is telling people what to do and how to behave. Celebrate your sexual diversity. Don't do that with carbon emissions-increasing technology and so on. Everyone was aware of these horrible flaws and I really didn't have to say anything.
At the end of the conference, I walked up to someone and I said that was kind of amazing to me. I really thought I was going to have big rows with all you guys. And this woman looked at me as though I was mad and said "don't think we're going to pass any of this discussion on. This is a meeting for people who understand, but it's closed doors. It won't translate into anything."
Merryn: But that's an incredibly dishonest story you tell; that the people at the top of the aid organisations are well aware of the effect of their actions and also maybe aware that they're not actually required to the extent that they like to think they are but carry on anyway taking money from innocent people in the West who possibly can't afford to give to people who don't necessarily need it anymore. This is a horribly dishonest story.
Alex: Think about first you have the problem of institutionalisation. These institutions are just massive. How do you reform? How do you turn them around? It's like trying to turn around oil tankers. Then you have really the problem of accountability. You raise your money over here, but you do your work over there somewhere very distant where nobody can really check up on what you're doing. There is really no accountability. On top of that you're doing work in areas where there's no data. South Sudan, Congo no one's got an idea within even a million people what the population is, let alone how effective your aid is being.
Merryn: So, you can't prove either way whether you've done any good or not.
Alex: No, and actually that gap in data allows people to claim awesome results. It's absolutely standard aid agency practice to estimate the population of an area and say, eastern Congo has a population of 20 million where Oxfam or whatever is working, and the suggestion is, we're helping 20 million people. I mean, Congo is a great example for that kind of lack of data. It's often called the rape capital of the world, and it's also said that more people died in Congolese civil war than in any conflict since World War II 5.4 million is the figure given. Well, the period given for that war 5.4 million would mean an average of 45,000 people a month. I mean, over a thousand a day every day for over a decade that just hasn't happened. It hasn't happened and
Merryn: So, where does the number come from?
Alex: Well, it was a survey put out by the International Rescue Committee ten years ago. It has been consistently proved to be wrong and it is consistently used by every aid agency in Congo.
Merryn: To justify their presence in Congo.
Alex: Right. The rape capital of the world thing is kind of amazing because so, there was a researcher who went out a few years ago to research rape in Congo as many people get grants for it, but she asked an interesting question. She asked, what was the gender of the person that raped you? And 41% came back with women. 41% of the women had been raped by women. Go figure. It's a hard thing to get your head around, but it completely skewed the narrative that the aid agencies were selling, which was all about gender-based equality and female emancipation and so on and she was hounded out of Congo.
Merryn: For asking a question that didn't fit the story.
Alex: Exactly. So, it's not just that the narrative is wrong. It's that the narrative is defended even when it's wrong because it's so essential to keep that narrative for the business.
Merryn: So, if every big aid agency pulled out of Africa tomorrow, what would happen?
Alex: It would be a disaster. Sure.
Merryn: Because they're shoring up the infrastructure at this point. $55bn is an awful lot to be putting into a continent.
Alex: Right. Well, it would be a disaster in terms of I mean, South Sudan is a great example of a very new country which had almost no government and independence and still doesn't because what 30 years or more of massive aid has taught the South Sudanese government is that it doesn't need to bother.
Merryn: Because they'll do it for you.
Alex: Because other people will do it for you. So, the responsibility of government as South Sudanese ministers seem to interpret it is to steal as much oil money as possible and give it to their people.
Merryn: While waiting for everybody else the aid agencies to run the country.
Alex: But education, infrastructure, health, that sort of stuff other people will do that. Again, I've sat inside a meeting in Kenya with the minister there talking about malaria prevention. The malaria programme in Africa is amazing. That's an incredible example of good aid, which by the way is almost entirely staffed by ex-Wall Street guys strangely or not strangely.
Merryn: Giving back, Alex they're all giving back.
Alex: Well, it's what they did was change aid completely and they turned this into a question of selfish incentive really. They went round African governments saying, do you know what? If you eliminate malaria, your GDP will go up 2% and you'll all be richer. That's how they sold it. They didn't say, do it from the goodness of the heart. They said, do it while looking at the fatness of your wallet, and it worked.
Merryn: So, you're in this meeting.
Alex: So, I'm in this meeting and I'm travelling with the malaria campaign guys who say, so, we're getting this much from the World Bank and we're getting this much from the IMF and other agencies are coming in. Can you guys the Kenyan government put in $50,000 just to show you're willing? Just as a token? No. Can't do that. The health minister in Kenya can't spend a dollar on malaria; the biggest killer in her country. Why is that? Because other people will pick it up.
Merryn: Because she doesn't need to.
Alex: It's because she doesn't need to and and frankly there are a load of aid agencies out there that don't want her to. Otherwise they'd be out of a job.
Alex: Yes. You know, the perverse incentives of this thing are well, as I say, they've been institutionalised and deconstructing that now would be, A, a nightmare, and, B, some kind of disaster. I think it needs to be done, but it needs to be done carefully.
Merryn: Slowly and carefully
Merryn: Yes, but a good start to that would be less money flowing into the aid agencies by us in the West understanding that perhaps our money isn't required in the way that we think it is, so perhaps if the narrative changed, you would make a start on reducing the power of the aid agencies.
Alex: Well, sure. I mean, I think, this absurd situation you have in the UK where we will give 0.7% of our GDP to aid just it's a blank cheque. At the end of last year DFID hadn't spent enough money and just okayed hundreds of millions of dollars to anybody. I mean, it's precisely the opposite of what should be happening. This stuff needs regulation and oversight like nothing else, and exactly the opposite happens when you set that kind of target, like, we must get rid of all this money. Look. I mean, in Africa as I say, a lot of aid workers are well intentioned, reasonable people trying to do the right thing. However, it is true to say that many aid workers in Africa represent what you might call the 1%. If you take the total package for a UN guy in eastern Congo; not even the head of an agency but, say, someone in charge of infrastructure or infant mortality or something like that if you add up his salary, his rent, his car, the business-class flights home whenever he wants it
Merryn: The pension
Alex: Free kids' education right. It's half a million dollars a year. That's more than the US president. Do you really think this guy has more responsibilities than the US president? You know, it comes from a good place. It comes from a place of the UN trying to be a good employer, but it's insane.
Merryn: They're still spending other people's money and grossly overpaying.
Alex: And guess what. If you pay that much money, what kind of person applies for the job? The kind of guy that's interested in a lot of money; not the guy that's doing it out of the goodness of his heart. And you combine that with a culture in which there's almost no checks and no accountability, you have a guy that messes up in South Sudan, gets promoted, and goes to eastern Congo and makes even more money. It's a system. It's an institutionalised system that is and as I say, I'm not telling you anything that aid workers won't readily acknowledge.
Merryn: In private.
Alex: In private; yes.
Merryn: Well, let's move away from that part of the conversation which is beginning to upset me and move on to the brilliance of Africa and what you see as this surge of economic growth and surge of exciting change.
Alex: Right. Well, since around 2002-2003 Africa's economic growth has been double the world average. You pick any one year in the last decade and you'll find five of the ten fastest-growing economies in the world are African. All right. They're coming off a low base and, that early stage of economic development is often very rapid. The point is to acknowledge it. I mean, Angola grew by 21% one year. It's massive.
Merryn: And we're getting the statistics in Angola are not 100% reliable, but it's the trend that matters.
Alex: Sure, but in fact again, just to briefly go back to aid is it in the interests of any African government to make out that it's doing OK faced with a giant aid complex in the capital city?
Merryn: Yes. You don't want to grow 20%, do you?
Alex: No. You know, it never made sense to me that take Kenya again. I mean, when I arrived in Africa the average wage was said to be $600 a year per head. Well, that didn't really compute with the amount of Mercedes and BMWs on the streets of Nairobi. Guess what. People were underreporting their income to, a reasonably corrupt government who is then in turn underreporting its wealth to foreign aid donors. There has always been way more wealth in Africa. I mean, right now the average African I mean, you take all 49 sub-Saharan African countries is $200 richer than the average Indian. It's $1,720 a year. You know, that's a lot more than you'd have thought.
Merryn: It's a lot more than people think. Yes.
Alex: Yes, and that's the average. So, there are 160,000 millionaires in Africa. Well, millionaire just isn't a word that you think of when you think of Africa, but 160,000 that's a lot. Inequality yes is a massive problem and
Alex: yes, and corruption and it builds all sorts of resentment and but development is not a smooth path to progress. It's up and down, often bloody it was in Europe for 1,000 years and you can expect some fairly turbulent times in Africa, but the idea that we used to have that these are wars about nothing that just erupt because Africa is just nuts. This is about striving now and the mood is really furious assertion and it's pushing and essentially it's about freedom. It's about Africans achieving the substance of their freedom and money allows them to do that. Money gives you the authority to push back at anybody pushing you around. So, that's pushing back at their own corrupt autocrats and dictators who are really, dying out. There's still Mugabe and a few others, but, really democracy is becoming more or less the rule.
Merryn: Yes. I mean, you may not have much in the way of the very aggressive dictators of the past, but you've certainly got sort of semi-dictating governments in that they're as you said earlier very corrupt in general. I mean, is there a government that you could pinpoint in Africa we keep talking about Africa as an amorphous whole and of course it's not; it's very different a country that you could sort of hold up as a beacon of at least low corruption?
Alex: Botswana, Mauritius although it's an absolute target for the human rights groups, Rwanda is incredible. It's I mean, to come back from a genocide 20 years ago to where it is now when the whole of Kigali is wireless. It's and what's interesting is and where some of these accusations come from of dictatorial behaviour is that Africa a lot of Africa is very definitely moving away from a Western model of development. It sees a lot more sense in following something like Singapore where development comes first economic development because after all money is freedom and after that we can talk about, relaxing on political freedom and so on.
Merryn: So, that would bring us to the relationship a lot of African countries have with China and the infrastructure across much of Africa that China has been building.
Alex: Yes, and there's two things to say about that. One is that, obviously it has been a rapid expansion. Well, there has been a rapid increase in investment by China in Africa. Africa is a kind of experiment for China of how it's going to be in the world and it very deliberately set out a different stall to the West which so, when China comes in, essentially it doesn't say, here's what you need to do, here's what you should do. It asks, what do you want to do? You know, it's a very simple thing, but China takes the view that Africans are probably best placed to understand what their countries want and so that whole sort of patrician presumptuousness is done away with and what Africa really needs it's so vast and what it has always needed to become a functioning continent is infrastructure.
Merryn: So, roads, rail
Alex: Roads, rail, airports, ports the works.
Merryn: And how can those not have been built in, all those many years and years of colonialism followed by decades and decades of $55bn being chucked in via aid? How can they not have built roads, airports, railways, and ports?
Alex: Yes. Exactly. That is kind of embarrassing. What colonialism built was railways and ports to get stuff out of Africa.
Alex: From ivory to gold to forestry, whatever, but yes. With 50 years of aid running anything up to
Merryn: You'd think there'd be an airport in every village.
Alex: Right. So, that has really shown up the Western approach. it's important not to overdo China's presence as well, which the West does by the way apparently with a completely straight face, accusing China of being imperialist, but actually if you look at the figures the biggest investor in Africa is France, then the US, then the UK, then South Africa, then Malaysia, and then China.
Merryn: Interesting. It's that far down the list?
Alex: Yes. Western business and Western diplomats overestimate it as a kind of China scare story. China overestimates it itself as a sort of self-promotion thing. A lot of the big headline deals we're putting nine billion into Congo, we're putting 23 billion into Nigeria actually don't come off. They announce them, but if you wait for the substance of it, it doesn't arrive, but the there's a fundamental misconception in that accusation anyway. The idea that frankly anybody is taking over Africa anymore is just wrong. Nobody can take over Africa now. Africa is standing up. Africa is pushing back. You know, if Africa has loads of stuff that everybody still wants like gold and oil and gas
Merryn: No. No one wants those anymore.
Alex: Timber I don't know. Cobalt we all need that stuff in Congo for our mobile phones, right?
Merryn: Yes; rare earth stuff.
Alex: But if Africa has all that stuff, it draws suitors; not conquerors. It's about you ask now. You don't take.
Merryn: So, what's the most what are the most exciting sectors economically in Africa? You talked earlier about, a Silicon Valley in Kenya. What's really exciting in terms of economic development? Where are the areas where we're going to see you know, when we stop thinking about starving babies, what are we going to see coming out of Africa?
Alex: Well, there's a lot of sort of kind of leapfrog innovations. So, that's, adapting I mean, mobile is massive, but it's not just about mobile phones. I mean, Kenya has had mobile banking since 2007.
Merryn: Using M-Pesa
Alex: You know, we've only just got it in London.
Alex: You know, they're way ahead in that sort of stuff and it's the same sort of thing with solar power. Solar power kits are now being sold across Africa that essentially do for light what phones did for communication. You go to a shop. You buy a set almost for free. You pay it off subscription every month and you get light off-grid in a place that has abundant solar potential. But the other things that are really exciting for growth is about Africa kind of coalescing, and those are a part of it, but essentially we're talking about infrastructure whether it's heavy infrastructure or even sort of institutional infrastructure. So, things like commodity exchanges there's one in Ethiopia now, but there's going to be another ten in the next decade or so across the continent. It's currency unions. There is a common currency in West Africa. It seems like there will be one in East Africa and it seems like that will eventually combine with Southern Africa and then maybe even actually one African currency in sort of 15 or 20 years' time. It's that coming together.
Merryn: God, monetary union really?
Merryn: It seems like a bad idea.
Alex: Well, the idea is you know, essentially is that I mean, if you took an extremely long-term view of Africa's development, the big secret to understanding Africa is that it's really big. It's as big as China and Europe and America all put together and it takes an enormous amount to connect this place up. That's what's happening now and that's why things like private property and communication and whatever are sort of taking off and that's why Africa is arriving on the world stage.
Merryn: Well, let me ask you this. I did a similar interview with our mutual friend James Fergusson recently who was much more down on Africa than you are and talked about the vast majority of sub-Saharan Africa being an area that will become increasingly overpopulated, increasingly drought-driven, and which people would increasingly leave and, a large number of the migrants coming into Europe at the moment are from that area.
Merryn: If it's so great, why is everyone wanting to leave?
Alex: I mean, I would take yes a very different view. Africa has always been horribly underpopulated. That's the reason it's so poor. It needs the extra people. That will be the driver of development. In fact, the youth of Africa are the future not just of Africa but the world. They will be the innovators and the workers and the managers.
Merryn: What if they don't have enough water?
Alex: They will have enough water because desertification is happening in some places, but in other places Mali, Niger, Burkina Faso, Ethiopia, Malawi it's being reversed.
Merryn: How is it being reversed? How do you reverse that?
Alex: There was a farmer in Burkina Faso 30 years ago who took the traditional methods of farming the desert, which was essentially digging trenches you have to try and make the earth stop and once you stop you can kind of water it and it will germinate. It turns out the desert isn't dead land. It's just very dry, but if you water it, it will come back to life. It took him 25 years, but at the end of that period he had created a 25-acre forest in the middle of the Sahara and he was a lot richer than everybody else because in a bad year he could cut down some trees and sell them for firewood. So, he had cash crops. He could keep animals. The trees also protected his maize and so on and all his neighbours noticed and it caught on to a massive extent.
The extent of the regreening of the Sahara is so big it can only be seen from space. NASA has the photographs, but if you see these photographs, there is an upturned U shape in the middle of the Sahara around Niger, Burkina Faso, and Mali that is 200 million trees, which and what is doubly brilliant about that: done without a single penny of aid.
Merryn: Where are the aid workers? They should be rushing to this place. It's a proven way they can spend money.
Alex: Funnily enough, quite near next to where Yacouba the original farmer farms there is an Italian aid project that has spent $100m and managed to regreen 25 acres. So, there's $100m and Yacouba by himself with
Merryn: And with the regreening comes the water.
Alex: With the regreening comes a solution to climate change. The amount of trees being planted are enough to lower the temperature. In fact, you can physically feel it when you go there. It's literally five degrees lower. So, there is an answer to desertification. It is catching on organically without anybody's assistance. On top of that, the idea that people coming from Africa are coming to escape destitution is wrong. You know, it costs somewhere between $5,000 and $10,000 to for all the different stages of people-smuggling to get to Africa. That's a lot of money. It's a lot of money. It'd be a lot of money from anybody.
Merryn: But it's also but it's I mean, it's a lot of money, I accept, but it's also a thoroughly unpleasant and extremely dangerous thing to do. You would not do it if you weren't fleeing something.
Alex: No. You might well do it if you're incredibly determined. I mean, there is definitely a category of people who are generally unaccompanied children a lot of them come from Eritrea whose families will send them to Europe as a kind of beachhead and they will pull in whatever cash they can get probably from relatives abroad to fund this passage.
Merryn: To fund one kid's trip.
Alex: Yes, but the guys coming from Senegal it's a lovely place. Nigeria the economy is growing 7% a year. A lot of the migrants are from places not at war, not repressed, growing economically they're coming because they can afford it themselves and they've got big ambition.
Merryn: So, they don't see what you see in Africa.
Alex: I met these guys in Sicily. What here's irony. I met some Nigerians in Sicily who were staying in a migrant detention centre who had funded themselves, and imagine that kind of grit and determination to cross the Sahara, cross a sea in a leaky boat yes. You're pretty these are the kind of guys you want to migrate to your country. They will create something and they've been sitting in a migrant centre in Sicily for 18 months and here's the irony. It became very clear that they were in this migrant centre for so long because the Italian mafia which ran the migrant centre wanted to keep them there because it was getting €32 a day per head off them and the Nigerians understood this completely because, they were familiar with it.
Merryn: With the way this works; yes.
Alex: They said, this is exactly the kind of stuff we try to get away from. They couldn't believe it. They were like, you have the same problems we have? You know, which to me was a great irony there, but there was a great leveller there. The other one the other leveller of course to the whole migration problem is the whole idea that economic migrants are somehow are bad migrants well, as many Africans arriving in Sicily and elsewhere will point out fairly readily, where do you think Europe's wealth came from? Was it not from European economic migrants going to Africa? It's there is a certain amount of
Merryn: There's a circularity to the whole thing.
Alex: Historic justice there that while we ignore, Africans don't.
Merryn: Last question: if you had to choose one African country to live in for the next 20 years, what would it be? And you can't choose South Africa or Botswana or Senegal.
Alex: You know, they want to be the new Singapore and they might be. I mean, the latest plan, which is a collaboration between an ex-economist journalist and Norman Foster, is to build not just Africa's but I think the world's first drone airport in Rwanda. Guess who would really benefit from a small bespoke aerial transport system. Well, a continent as large as Africa. Yes. Rwanda is astounding, and the fact that the human rights groups and a lot of the aid groups can't see that is increasing monumental testament to how blind they are and how their misperceptions are blinding the rest of us.
Merryn: Brilliant. Thank you very much, Alex.
Alex: Thank you.
Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
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