Presentation in 2010 in advance of publication. Publication can be found here: http://www2.carleton.ca/africanstudies/ccms/wp-content/ccms-files/Nokoko-Fall-2011-2-Schorr.pdf

1. Economics of
Afro-Pessimism
Afro-pessimism’s negative impact on
investment in Africa
Presented at the CIC - Africa Study Group
(Ottawa)
by Victoria Schorr
on July 21, 2010

2. Elements of Afro-Pessimism
• Homogeneity
• Colonial mythos
• Illness and disease
• Starvation
• Africa as National Geographic
• Violent tribal conflict
• African Big Man and political
instability
• Unrelenting poverty

3. African Big Man & Political
Instability
• Reno Model
• Coups
• Mad tyrannical dictator
• Corrupt African Big Man
• Patrimonial African Big Man

4. Unrelenting Poverty

5. Media Reviews
• Schraeder, P.J. and Endless, B. ‘The Media and Africa:
The Portrayal of Africa in the New York Times (1955-
1995)’, A Journal of Opinion, vol. 26(2), 1998
• Domatob, J. ‘Coverage of Africa in American Popular
Magazines’, A Journal of Opinion, vol. 22(1), 1994
• Stith, C.R. ‘A Survey of American Media Coverage of
African Democracies: 1994 – 2004’, Boston University:
http://www.bu.edu/aparc/resources/studies/mediacoverage
062805.pdf
• Smith, J. et al. ‘Reflecting The Real World?: How British
TV Portrayed Developing Countries in 2005’,
Commonwealth Broadcasting Association et al., 2005
• And more….

6. Foreign Direct Investment

7. FDI Inflows by Region
2006 to first quarter of 2009 ($b.)
Source: UNCTAD, World Investment Report 2009, p. 41.

8. Governance& FDI

9. We have found that Africa’s credit ratings are lower
than is warranted by the fundamentals … Nonetheless,
our analysis has shown that there is considerable
persistence in the ratings so that a country tends to
retain its rating over time unless significant adverse or
positive developments occur. Indeed, the combination
of the lagged value of the country’s rating and
economic fundamentals typically accounts for 80 to
over 95 percent of the variation in credit ratings.
Haque et al. From Collier, P. and Pattillo, C. (eds.) Investment and Risk in
Africa, St. Martin’s Press, Inc.: USA, 2000, p. 63

10. Data Available
• World Economic Forum, Global Competitiveness Report
2008-2009 and 2009-2010
includes Executive Opinion Survey
• UNCTAD, World Investment Report 2009
• World Bank, Investment Climate Around the World (2003)

11. Criteria of GCI Institutional Rankings
• Property rights • Efficiency of legal framework in
• Intellectual property protection challenging regs.
• Diversion of public funds • Efficiency of legal framework in
• Public trust of politicians settling disputes
• Juridical independence • Ethical behaviour of firms
• Organized crime
• Violent tribal conflict
• Business costs of crime &
• Favoritism in decisions of gov.
violence
officials
• Reliability of police services
• Wastefulness of gov. spending
• Strength of auditing & reporting
• Burden of gov. regulation
standards
• Business costs of terrorism
• Efficacy of corporate boards
• Transparency of gov.
• Protection of minority
policymaking
shareholders’ interests

12. Selected Net FDI Inflows ($m.)
Country GCI 2004 2005 2006 2007 2008
Ranking
*
Indonesia 54
Inward 1,896 8,337 4,914 6,928 7,919
Outward 3,408 3,065 2,703 4,790 5,900
Malaysia 24
Inward 4,624 3,967 6,048 8,403 8,053
Outward 2,061 2,971 6,041 10,989 14,059
Vietnam 75
Inward 1,610 2,021 2,360 6,739 8,050
Outward - 65 85 150 100
Botswana 66
Inward 392 281 489 495 -4
Outward -39 56 51 51 3
Mauritius 57
Inward 11 42 105 339 383
Outward 32 48 10 58 52
Nigeria 99
Inward 2,127 4,978 13,956 12,454 20,279
Outward 261 200 228 261 299
South Africa 45
Inward 799 6,644 -527 5,692 9,009
Outward 1,352 930 6,725 3,727 -3,533
Sources: UNCTAD, World Investment Report 2009, Country Fact Sheets, online.
* GCIs From Schwab, K. The Global Competitiveness Report 2009–2010, World Economic Forum:
Switzerland, 2009.

13. Executive Opinion Survey Results (2008)
Country GCI GCI Institution Most Problematic Factors for Doing Business
Ranking Ranking (%)
Indonesia 55 68 1. Inefficient government bureaucracy (19.3)
2. Inadequate supply of infrastructure (16.4)
3. Corruption (10.7)
Malaysia 21 30 1. Inefficient government bureaucracy (16.7)
2. Corruption (14.5)
3. Crime and theft (8.3)
Vietnam 70 71 1. Inflation (17.9)
2. Inadequate supply of infrastructure (16.5)
3. Inadequately educated workforce (10.6)
4. Corruption (9.0)
Botswana 56 36 1. Poor work ethic in national labour force (19.0)
2. Inadequately educated workforce (14.0)
3. Inefficient government bureaucracy (11.1)
…
8. Corruption (6.3)
Mauritius 57 39 1. Inefficient government bureaucracy (18.6)
2. Inadequate supply of infrastructure (15.2)
3. Inadequately educated workforce (15.2)
…
5. Corruption (8.0)
Nigeria 94 106 1. Inadequate supply of infrastructure (22.3)
2. Access to financing (19.9)
3. Corruption (14.0)
South Africa 45 46 1. Inadequately educated workforce (22.3)
2. Crime and theft (19.8)
3. Inadequate supply of infrastructure (12.9)
…
6. Corruption (6.2)

14. Issues with Investor Studies
• Among those already investing
• Expectations coming in
“miracle” vs. “basket case”
… Need to know what potential investors think and
what they think their most constraining factor(s)
would be

15. Conclusions

16. … [that] as development specialists now celebrate the
stunning economic achievements of China, Taiwan,
South Korea, Singapore, and those following them,
they tend to downplay the intellectual despondency
that characterized development studies of Asia in the
1950s and through the Vietnam War.
Chege, M. ‘What’s Right with Africa?’, Current History, vol. 93(583), 1994