Has Africa always been the world’s poorest continent?

Jeff Sachs claims that Africa was always the poorest continent in the world, that many parts of Africa have never experienced economic growth, and that comparisons between African countries and Asian countries are highly misleading (see in this video for example).

Until recently it has been hard to establish basic stylized facts about African development because GDP data only goes back to 1960, but Ewout Frankema and Marlous van Waijenburg have been able to compile internationally comparable real wage estimates back to the 1880s (pdf). They follow Bob Allen’s influential methodology, constructing representative consumption bundles, and then seeing how many bundles an unskilled worker could obtain. The welfare ratios that result show that it simply makes no sense to talk about African economic performance in general in the colonial period.

There were at least two distinct economies in British colonial Africa, a comparatively high-wage, labor scarce, economy in West Africa, and a low-wage economy in East Africa.   Real wages in many West African cities grew more or less continuously, from the 1880s until the 1930s, as these economies enjoyed a boom in commodity exports, and West African wages exceeded wages in many Asian cities through the colonial period. The story of poverty and stagnation in modern West Africa is not a story of permanent stagnation, but of growth collapses and growth reversals (especially in the 1970s and 1980s).

In contrast, real wages were extremely low in British East Africa.  Many East African economies like Kenya never experienced rapid growth in the colonial period. It was the crisis of the 1970s that created the current view we have of all of sub-Saharan Africa as sharing a common set of problems. Modern Ghana, or the Gold Coast was roughly twice as rich as Kenya in the colonial period,  but by the 1980s per capita GDP in the two countries was the same.  Were the high real wages of the colonial period solely the rest of labor scarcity? (like the high wages recorded in medieval Europe after the Black Death) or did they represent a genuine moment of opportunity that could have led to sustained economic growth?

Consider this evidence in light of recent optimism about growth rates in Africa in the 2000s (see this MR post).  Like the increase in real wages that occurred in the colonial period, recent growth has been driven by an export boom and rising commodity prices.  These findings suggest that episodes of economic growth are less rare in African history than we might previously have supposed.  Instead, perhaps the real difficulty lies in sustaining economic growth, and not in getting growth going for a few years.


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