We believe it's time for Africa to lead the way in redefining economic success, moving beyond the sole reliance on GDP growth to focus instead on the true well-being and sustainable lives of its people within the Earth's natural limits. This calls for a "new economics" perspective, one that reflects the continent's unique realities and aspirations.
The Flawed Promise of GDP
Let's start with a provocative thought experiment: Imagine a brilliant scientist invents a simple, affordable cure for diabetes. What would happen to GDP? Surprisingly, it would likely decrease dramatically. Why? Because entire industries are built around managing the symptoms of diabetes—medications, specialized clinics, and associated services. A cure, while revolutionary for human health and happiness, would cause these industries to shrink overnight, negatively impacting GDP. This striking example reveals a critical flaw: GDP often measures economic activity, even when that activity is driven by illness or problems, rather than genuine human flourishing.
Furthermore, we must ask: "Value according to whom?". Economic models often imply that the economy is oriented around the everyday needs and desires of the general population—things like coffee, childcare, or a doctor's visit where the doctor truly listens. However, the reality is that the financial mechanisms within the system, and those who wield institutional decision-making power in large corporations and government bureaucracies, largely determine where resources flow. This means GDP growth often reflects value as defined by those in power, not necessarily the fundamental needs for food, shelter, or quality healthcare for everyone.
There's also what we term "destructive growth value". Consider an agricultural practice that uses pesticides which, over time, lead to higher rates of diseases like diabetes. While the farming industry contributes to GDP, the subsequent expansion of the healthcare sector to address these illnesses also boosts GDP. In this scenario, pain and destruction are inadvertently feeding economic growth, creating a system where fixing problems, rather than preventing them, becomes profitable. This inherent "hunger" for growth, often channels resources in directions that prioritize profit over the well-being of people and the planet.
The Illusion of Scarcity and the Reality of Abundance
A core assumption underpinning current economic theory is that resources are inherently limited or "scarce". However, we argue that this idea of scarcity is often an illusion, or worse, a manipulation.
Think about it:
Food: There is enough food to feed everyone in the world. Famine and hunger often occur not due to lack of production, but because governments or market forces deny access.
Housing: In many places, including African cities, there is enough land and capacity to house people. Yet, we see homelessness and inadequate housing because land is restricted to keep prices high, prioritizing property values over the human need for shelter. Imagine the heartbreak of a family living on the streets, not because there aren't enough homes, but because the system has made housing unaffordable.
Healthcare: We could eliminate the vast majority of diseases that cause suffering and death. But for many pharmaceutical companies, managing illness is far more profitable than curing it. They manufacture scarcity for cures to maximize profits from long-term treatments, leaving countless people in prolonged pain.
These are not accidental outcomes; they are often deliberate consequences of markets rigged for profit, designed to restrict supply, increase prices, and extract disproportionate gains by denying access to essential resources. This perpetuates inequality, pretending markets are efficient when they clearly aren't.
Living Within Planetary Constraints: A Forest, Not a Monster
The relentless pursuit of GDP growth also clashes with fundamental scientific realities. Our planet has finite physical limits. The second law of thermodynamics tells us that useful work requires energy and inevitably creates waste. Continuous economic growth, as currently conceived, is simply not sustainable in the long run. It leads to environmental degradation, resource depletion, and climate change, which disproportionately affect vulnerable communities in Africa.
We need a different analogy for economic growth. According to Ashley Hodgson, a reknown economics professor, we need to think of an economy more like a forest. A forest grows, thrives, and evolves, but it does so within natural bounds and ecosystems. Similarly, our economic system needs bounds on the destruction of the planet, on the exploitation of communities, and on harmful practices. Within these bounds, genuine growth—growth in well-being, innovation, and human potential—can flourish indefinitely. This isn't about being "anti-growth" but about redefining what kind of growth we pursue.
Redefining Success: Towards Sustainable Lives Lived Well
At Ubuntu Think Tank, we propose that the purpose of economics should be about ensuring everyone has a chance. It should be about creating conditions where there is always enough to meet fundamental needs, rather than manufacturing scarcity.
New metrics for success in Africa must move beyond mere financial transactions. We need to define success in terms of sustainable lives lived well. This includes:
Universal Access to Essentials: Ensuring that every African has access to nutritious food, decent housing, quality education, and comprehensive healthcare, because these are human rights, not commodities to be rationed. Imagine the relief and dignity of a mother knowing her children will always have a roof over their heads and food on the table, regardless of market fluctuations.
Well-being and Happiness: Prioritizing metrics that reflect genuine human happiness, reduced fear, stress, and anxiety. What if we measured the joy in communities, the resilience of families, and the peace of mind that comes from knowing one's basic needs are met?
Ecological Balance: Measuring our harmony with nature, including resource regeneration, biodiversity, and clean air and water. Our economic activities must be consistent with planetary boundaries, promoting a circular economy where waste is minimized and resources are reused.
Empowerment and Opportunity: Focusing on metrics that reflect equitable opportunities for all—especially youth, women, and marginalized groups—to participate meaningfully in the economy and contribute their full potential.
Resilience and Self-Organization: Building systems that can adapt to shocks and maintain stability, much like living systems that are inherently resilient and self-organizing.
This paradigm shift requires governments to use their powers—through money creation, taxation, and regulation—to effectively deliver well-being and match resources to needs, rather than solely promoting GDP growth. Private companies and entrepreneurs like me certainly have a role, but our purpose must align with meeting societal needs, ensuring universal access to the products and services we create.
It's time for a theoretical revolution in economics. By shedding the outdated assumption of scarcity and embracing a vision of abundance within ecological limits, Africa can forge a path towards a fairer, more sustainable, and truly prosperous future—a future where happiness, well-being, and collective flourishing are the ultimate measures of success.