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A reinterpretation of Africa's twentieth century
Population growth may hide the remarkable economic performance of the continent
The standard story of twentieth-century Africa’s economic development goes like this: the first half of the century – under colonial rule – saw some growth, although this was often closely tied to commodity price booms and busts. The first few years of the post-colonial period were generally characterised by rapid growth: in some cases, like Uganda, reaching rates of 5% or more for several years. There was much to be optimistic about.
And then, so the story goes, tragedy set in. The rise of dictators in many African countries crushed the economic hopes and aspirations of an independent Africa; the three decades between 1970 and 2000 are often considered the ‘lost decades’. It is only since 2000 that many African countries experienced some growth, although one could argue that this, again, is tied to a commodity price boom.
But is the story that simple?
Let’s go back two centuries to the eighteenth century and the Industrial Revolution in England. One of the conundrums that economic historians have tried to understand is why real wages grew so little during the first century of the rapid economic transformation in England from an agricultural to an industrial society. According to the best estimates, real wages grew very little, if at all. This seems perplexing, given the birth of factories, the rise in output and rapid urbanisation.
Nicolas Crafts and Terence Mills, in a paper published in The Economic Journal last year, purport to have an answer: while we’ve mostly focused on real wages (or GDP per capita), one of the major contributions of the Industrial Revolution was to simply increase the size of the population that would survive into adulthood. In short, women continued to have many kids, but in contrast to before, when many would die (of starvation or disease), far fewer died during the Industrial Revolution. This was because of the remarkable technological progress of the era, increasing the productivity of farms and factories, boosting output and keeping many more people alive than would otherwise have been the case. It suggests that living standards increased rapidly, even if the average person alive did not see a notable increase in their real wage.
Now replicate this result for twentieth-century Africa. Sure, real wages did not increase much in sub-Saharan Africa during the second half of the twentieth century. In fact, real wages, as earlier work by Ewout Frankema and Marlous van Waijenburg have shown, may have even been higher in 1950 than several Asian countries. By 2000, this was certainly not the case.
But consider what did happen during the second half of the twentieth century: rapid population growth. What is remarkable, then, is not that wages did not increase by much, but that wages did not crash spectacularly!
Consider the figure. It shows the population sizes of a select few countries between the years 1950 and 2021. And let us look at only two countries: the United Kingdom and Tanzania. In 1950, the UK had 50 million inhabitants. Tanzania had 6.7 million. Today, the two have almost the same number, at 67 million. Whereas the UK has added 17 million people, Tanzania added 60 million.
The UK standard of living is, of course, much higher than that of Tanzania: $38 000 vs $2875 per person. (The last time the UK had a $2875 GDP per capita was in 1776 when Adam Smith wrote his Wealth of Nations.) But consider this: had there not been rapid productivity increases in Africa in the twentieth century, a consequence of technological adoption and institutional innovation, there would not have been the exponential increase in population that we have witnessed. Put differently, the fact that there were not many more famines and conflicts across sub-Saharan Africa in the twentieth-century points to rapid increases in living standards.
Although South Africa has not experienced the rapid growth of Tanzania, our story is not dissimilar. In 1950, there were 13 million South Africa. (In 1911, there were 6 million, roughly the same number of people that today live in Johannesburg,) Today, we are more than 60 million. We’ve added 47 million people in just 70 years. Or think of it this way: when I was born in 1982, there were just over 30 million South Africans. In my lifetime of 40 years, the number of South Africans has doubled.
Now, the surprising thing, again, is that this has happened without famine or conflict. We have managed to double the population in a generation without reducing our standard of living. In fact, the average South African earns 77% more (in real dollar terms) than in 1982. We have not only doubled in size, but we’ve almost doubled our average income as well!
Or think of it this way: We’ve just overtaken Italy in the global population rankings. Italians were as rich in 1964 as South Africans are today. But in 1964 they were also 51 million people, compared to our 18.6 million. Suddenly Italy’s performance appears less impressive than ours, given their relatively stable population numbers. Since then, we have tripled our population and more than doubled our incomes.
There are two takeaways from this: GDP per capita is a useful but limited measure. We should never forget the importance of the denominator in that metric. Part of the economic success of a country can simply be in the survival of large numbers of people that would have otherwise perished in what economic historians know as the Malthusian trap. This is particularly true for many African countries that are still experiencing rapid population growth.
But South Africa is also somewhat different from other African countries. Our fertility rates are much lower, now just above the replacement level; ours is 2.4 births per woman, while the replacement level is 2.1. As population growth begins to slow (in other words, the denominator slows), we should expect GDP per capita to increase – ie faster economic growth rates. This has, sadly, not been the case. South Africa is missing out on an opportunity to improve the standards of living of its people at a time when population growth should allow us to do so more easily.