AMA 104 – Learn About Africa’s Economy With Todd Moss

Todd Moss is the chief operating officer and senior fellow at the Center for Global Development. His work focuses on U.S and Africa relations and financial issues that sub-Saharan Africa is facing. He is also an author and has written several books with his most recent one, The Golden Hour, being a national bestseller. He talks to Jason about Africa, the economy, and why it matters.

 

Key Takeaways:
2:50 – 7 out of 10 of the fastest growing economies in the world are in Africa.
6:10 – We are seeing Africans transition from being very, very poor to becoming middle class.
9:25 – There’s a lot more foreign investment in Africa and the countries that were very badly managed in the 70-80s are now being managed much better.
11:30 – Will outsourcing and manufacturing move to Africa? Todd explains in this segment.
13:50 – A lot of Africans speak English as their native language and the second largest language is French.
16:25 – Is there a strong Al Qaeda presence in Africa?
22:15 – Todd talks about his latest book, The Golden Hour.
24:30 – Africa is changing very rapidly and Todd hopes more people will look at Africa as a place to vacation to in the future.

 

Tweetables:
When you add a Africa’s billion people to the global economy, that’s a huge boost.

An African immigrant to the US is more than twice as likely as an American to have a graduate degree.

 

Mentioned In Episode:
Abundance by Steven Kotler and Peter Diamandis
http://toddmossbooks.com/

 

Transcript

Jason Hartman:

Welcome to the podcast for the American Monetary Association. This is your host Jason Hartman and this is a service of my private foundation, the Jason Hartman Foundation. Today, we have a great interview for you so I think you’ll enjoy it and comment on our website or our blog post, we have a lot of resources there for you, you can find that at AmericanMonetaryAssociation.org or the website for the foundation which is JasonHartmanFoundation.org. Thanks so much for listening and please visit our website and enjoy our extensive blog and other resources there.

It’s my pleasure to weclome Todd Moss to the show. He is chief operating officer and senior fellow at the Center for Global Development and former Deputy Assistant Secretary in the Bureau of African Affairs under George W. Bush at the U.S Department of State. He is also the author of The Golden Hour and it’s a pleasure to have him on with us today. Todd, welcome, how are you?

Todd Moss:
Good, thank you, Jason. Pleasure to be with you.

Jason:
It’s good to have you. Just to give our listeners a sense of geography, where are you located? DC?

Todd:
I’m just outside Washington, DC.

Jason:
You’re in the belly of the beast. Good. So, let’s talk about, you know, the global economy, national security, and why all this stuff matters to people, especially Africa. You know, Africa I sort of view as the kind of forgotten continent. It’s just has never really made any real, you know, real impact on the global stage it seems. I mean, 100 years of that is steadily declaring GDP for most nations there, what’s going on there?

Todd:
Yeah, I think most Americans think of Africa as a far away place that maybe has a few problems, but nothing we should really very involved in or nothing that has to do with us and certainly Africa’s economic performance for a good part of the 20th century was pretty terrible, but Africa is really particularly in the last 10 or even 20 years has really gone around a turn around that most Americans have not yet recognized. Right now, Africa is one of the most dynamic regions of the world economy.

7 out of 10 of the fastest growing economies in the world are in Africa. We just in just a few weeks we had the first ever US Africa Summit in Washington DC. Leaders from 50 countries came to meet with president Obama and really the highlight of it was billions of dollars in new investment announcements from big brand name American companies that are expanding into Africa and this includes IBM, General Electric, Coca Cola, you know, real household names that are very excited about the growth opportunities in Africa.

Jason:
I think most of our listeners would be surprised to hear that, that you said 9 of the fastest growing economies?

Todd:
7 out of 10.

Jason:
7 out of 10. So, what are those? What countries are those?

Todd:
So, the fastest growing economies are some of those that have had some of the worst headlines in the past. So, you’d probably be surprised that Ethiopia is one of the fastest growing economies and it’s doing remarkably well right now. Rwanda, which only in 1994 had the horrific genocide, has been growing very, very fast. Other countries include Ghana, Mozambique, Nigeria is growing very fast even though they have some problems. Kenya, Tanzania, Senegal. So it’s really quite broad based. It’s not only oil economies.

Jason:
Yeah, that’s amazing. Senegal, even. Wow. So, the first thing that everybody should obviously consider is that when you have a tiny economy, just like a tiny little company, it’s not necessarily that difficult to get it to grow quickly. Bigger companies, bigger economies, it’s harder to get it to grow fast. This is definitely good news, that said. I’m not taking away from that. What do you attribute that to? You know, some of the countries mentioned seem pretty backwards. I just gotta ask you, how much Muslim influence is there, because that, I think, not meaning to offend anyone of course, but I think that’s a growth inhibitor. It just seems that way to me.

Todd:
Let me take those two questions separately. What’s been driving growth in Africa, so yes, you’re partly right a lot of economies are still small so they’re growing from a small base, but what’s changed from the 1980s or the 1970s is that economies are starting to build momentum. Economies start going at a faster pace and it’s easier to maintain that and what’s very exciting I think both as an investment opportunity, but also for Africa’s future.

What we’re seeing in many, many countries is this once in an lifetime transition where families are going from being poor into the middle class. So, we’re seeing families buying their very first refrigerator that their families ever had. The very first television. Many are buying the very first motorcycle or car in the family and that’s kind of the transition we went through in the 1930s and the 1940s and that starts to perpetuate itself. So you can imagine when a family buys their very first washing machine, suddenly all the girls and women in the family, they don’t have to wash clothes any more, they can do something else even more productive.

Jason:
That’s really why I asked you about the Muslim thing. You can’t really grow and be, you know, do anything great as a country, I mean, unless you have massive oil reserves and you’re just lucky, if you’re going to obsess women and do this kind of crazy stuff. You are never going to encourage tourism if you’re cutting people’s heads off or stoning people.

Todd:
Fortunately for Africa, there are very few cases of some of the radical religious furor that you see say in Pakistan or that we’re seeing now in Iraq. In fact, Islam in Africa is generally very, very moderate. Many countries in Africa have large Christian and large Muslim populations. Now, occasionally politicians can kind of stoke people to get upset with the other side, but it’s actually quite rare you’d have an elitist base of violence in Africa and even in the country of Mali, which is where The Golden Hour, my new book, takes place.

For hundreds of years, Mali has been a country of extremely open and tolerant religious diversity where all kinds of different Islamic sects and other religions have come and traded. The kind of craziness that we’re seeing in the news now is as foreign to most parts of Africa as it is to us.
Jason:
That’s good to hear, I’m glad to hear that, because that’s certainly going to lead to advancement opportunities. So, what do you attribute the growth to? You know, countries that are doing things right in Africa, what are they doing?

Todd:
Well, there’s been a number of factors. Some outside factors has been commodity prices have been generally on an upswing just like oil and copper and gold have been pretty good. The international economic environment, other than the recession in 2008/2009 actually have been very favorable for Africa.

The international financial system is strong enough that African countries can tap a lot of..a lot of countries are tapping private capital markets now in a way that they’ve never done before. So, the international environment is general favorable. You’ve seen a lot of investment coming not just the US, but from Europe, China, Japan, Canada, Australian is putting a ton of money, Malaysia. So, there’s a lot of people looking to invest in Africa. That’s helping.

We’re also seeing some really positive internal changes. A lot of countries that were really badly mismanaged in the 70s and 80s are now managed pretty well. Now, that’s not to say there are lot of economic problems in lots of places, but in general countries are doing a lot more of the right things and they’re able to do attract investment and get their own economies going.

Jason:
I had Steven Kotlet on the show and he wrote a book with Peter Diamandis called Abundance: The future is better than you think. They talk a lot about in that book and I’ve heard a lot of other futurist talk about the raising billion and, you know, Africa has a population of about 1.1 billion people and if these people can enter the global economy, you know, at first blush marketers and business owners and, you know, governments might think, they don’t have much money to spend, but they are so big in terms of number, when you add a billion people even if they hardly spend anything, that’s a huge boost to the economy and that’s why Africa really is important.

I don’t know how much we’re going to see of it there,but you know, outsourcing, manufacturing, and stuff like that? You know, China has certainly prospered from that dramatically. Estimates are that about 275 million people have been lifted out of portery through globalization. This is excited and great news, but of course, you can argue the other side , US workers have been hurt by that and that’s certainly valid also, but I think we’re in a free trade environment, period.

That’s just the world in which we live nowadays and we’re going to have to learn to adapt to that and some of the advances in technology, like 3D printing, are going to on-shore a lot of this back to the US. Americans workers, you got some good stuff your way. It’s not all bad, but what about the outsourcing and manufacturing in Africa idea? Is that going to happen in any big way or is that going to remain the domain of China?

Todd:
Well, right now, it still largely an Asian story. Manufacturing is sort of the one real negative in Africa is that we have not seen manufacturing take off and in large part even as China has moved up the value chain. You had countries like Bangladesh step in and Bangladesh and dominates the textile market, which is traditionally the gateway for countries in the manufacturing sector.

Now, whether Africa will replace Bangladesh in 10 or 20 years, I don’t know. I think it’s probably more likely some kind of automated system or robots will be making our clothes rather than thousands of low income women in factories, but clearly these changes in Africa that you’re talking about, the demographics, are huge, huge opportunities.

When we look at something like the explosion of cellphones and banking services in Africa where companies are making huge, huge profits off of…by expanding and meeting the needs of relatively poor customers, we can see that the potential is huge. As those incomes raise, as people go from earning $1,000 a year to $5,000 a year. They’re just going to be buying all kinds of things that they don’t currently have that, you know, some American companies will be providing.

Jason:
Well, it’s really an amazing thing. It is a big deal, no question about it. What about the language issue though in Africa? I mean, you’ve got, you know, Swahili has been a language as English has, but you have all these different languages, you have these tribal factions, you have different religions. I mean, gosh, it’s a challenging place, isn’t it?

Todd:
It’s an extreme diverse continent. You do have, like anywhere else in the world, the business language is largely English. Many, you know, hundreds of millions of Africans speak English. A lot of schooling is in English. The second biggest language in Africa is French. So, there’s a lot of common languages and, you know, very common in Africa for you to meet somebody who speaks 5 or 6 languages. For us, I struggled just to learn Spanish, but all of my African friends have no problem with half a dozen languages or more. It’s an adaptive masochism that they’ve had that will help them be very globally competitive.

One more really interesting connection between the United States and Africa’s growth story is the immigrants from Africa to the United States, we don’t have that many because Africa’s pretty far. Most migrants go to Europe. The migrants that we do get in the US from Africa are extremely highly skilled. In fact, an immigrant to US from Africa is more than twice as likely as an American to have a graduate degree.

Jason:
Really?

Todd:
You are really getting the cream of the crop from Africa and what’s exciting for Africa is of course they do, you know, they’re starting businesses, they’re becoming doctors and nurses here in the US, but many of them go back and start businesses back in their home country. So, most of the booming, new African companies were founded by returnees either from Europe or the United States who maybe they worked for Goldman Sachs for years and they went home and started their own bank. That’s really good for them and really good for us.

Jason:
Todd, I just gotta take issue with that comment about the graduate degrees and so forth. I mean, I don’t see that. I see a lot of these African immigrants driving taxis in the US.

Todd:
A lot of the African immigrants the US will have college degrees even if they’re driving taxis, but certainly around Washington, DC, we have plenty of African cab drivers. We also have a lot of African doctors, economists, other kinds of professionals. You know, there are just..they are relatively small relative to our population, but they are highly educated.

Jason:
Let’s talk about the security, the national security about it. How big of a presence does Al Qaeda have? You did allude to that before, but I want to take a deep dive into this a little bit. There’s certainly problems with political instability, there are coups, ethnic violence, drug and weapons smuggling, kidnapping, address that for a moment if you would. It’s just kind of a broad question, take it where ever you want

Todd:
Sure, as the US hammered Al Qaeda in the middle east, we’ve seen Al Qaeda and Al Qaeda copycats sort of pop up in some very weak places including Somalia and including in the middle of the Sahara Desert. The original Al Qaeda groups that emerged in the Sahara Desert were Algerians that were fighting with their own government in Algeria and had migrated south to take advantage of Mali’s inability to country its border. That sort of merged with some, as we’ve seen Al Qaeda do in other parts of the world, they kind of merge with local grievances.

So, some of the Al Qaeda type groups and when I say Al Qaeda here, I mean people that declare themselves to be Al Qaeda, it’s not that they’re taking direct orders, but they’re replicating what they think Al Qaeda would do. They teamed up with some local groups that were upset with the government of Mali and they were able to take a large part of the territory in 2012 until French forces invaded and pushed them back.

So you are seeing this confluence where Al Qaeda is taking advantage of local problems, but in general it’s not, Al Qaeda is a much smaller problem in terms of numbers in Africa is just the potential from them to grow in Africa.

Jason:
Address that for a moment if you would, Todd. The reason there is a potential for them to grow is due to economic hardship and lack of opportunity, probably. You speak to it yourself, but that’s what I’m thinking.

Todd:
That’s part of that, but it’s also that some of the governments are unable to control their territory. So, the government of Mali might have had 3,000 troops, not very well equip troops, trying to patrol the area the size of Texas in 100 degree plus heat. No body has ever controlled that part of the world ever in the history of mankind and to hope that 3,000 Malian troops could do so, you know, is wishful thinking, but that just creates these sort of pockets where Al Qaeda an hide, they can operate, they can train, and that’s why the United States is going to be forced, whether we want to or not, is going to be forced to get involved more intensely in some of these places.

Jason:
Okay, very interesting. So, I mean, what do we do about that? You know, how do we, what’s the solution to this Al Qaeda thing? It’s just crazy what’s going on in the world with these…why do people want to live in the 7th century A.D? I mean, it blows my mind.

Todd:
I can’t explain it and unfortunately I don’t have any great answers for you to solve it, but I do think the one thing we can’t do is turn away and pretend and sick our head in the sand and pretend it doesn’t exist. I think we know already that’s going to make matters worse. We do need to be very clear in our objectives in those countries. We are expanding our military footprint in parts of Africa. The Washington Post reported just on Tuesday that we’re opening another drone base in the Sahara Desert, so I think we’re going to see more drones and more direct counter-terrorism operations from the military, but that’s really a band aid.

The real heavy lifting is going to come from African militaries themselves who are just going to be better able to operate in those environments and understand who the enemy is and that’s going to mean that the US is going to have to get a lot better at security corporation with those militaries. We do a lot of it, but we’re just not that good at it yet. So, I think that’s really what we’re going to have to do on the military side and then there are more economic and political actions that we can take to try and support more open, more inclusive societies.

Jason:
Todd, give out your website real quick and then I just wanna talk to you about one more topic before we wrap up here.

Todd:
So, the website is ToddMossBooks.com and The Golden Hour, the new novel about the American diplomat in Mali is on sale as of today.

Jason:
Fantastic. Your book talks pretty much as much as about the way Washington works as it does anything else and I just wanted to ask you or maybe I should say the way Washington doesn’t work that might be a more proper…*Laughter*. Maybe I shouldn’t say that to someone in government, right, but..

Todd:
No, no. You should, that’s the point of the book,

Jason:
Your book talks about the way Washington doesn’t work and, you know, what does it reveal though, what does your experience reveal though about how the different departments work together. I mean, the government is just so mammoth. It’s so over bloated nowadays, you know, does the State department work with the Department of Defense and the White House and the CIA? Do they all really work together well or is it….

Todd:
On occasion different agencies do work together well. More often the norm is that they don’t and even within the State Department there are dozen of offices and bureau that also don’t work very well together. It’s not that people don’t want to get along with each other, in general, these are all patriotic, well-intentioned Americans and they’re all trying to do the right thing, but when you have a bureau whose mandate is counter-terrorism and you have another bureau whose mandate is to promote democracy and you have a third bureau whose mandate is to not ruffle anybody’s features, just to keep everything quiet, you can imagine when there’s a crisis and you have to decide what to do, people have very, very different ideas of what’s the right course of action.

So, The Golden Hour is exactly about that where the protagonist, Judd Ryker is suppose help the State Department react quickly to a crisis in West Africa, but he finds that he most of his time doing battle within the building and the different agencies that are all trying out plank each other and that’s a big part of the story. I wanted to take readers inside the White House situation room, inside the State Department operations center and then inside the classified of a US embassy overseas to hear what, you know, how those discussions happen when there are all these different opinions and they’ve got very little time and very little information when they have to make very important decisions.

Jason:
Very interesting. It’s an amazing exploration and there’s just a lot of information here. You know, just any final thoughts on Africa before you go?

Todd:
You know, thank you for that. I’m thrilled that you liked the book, I hope your listeners will like it as well. You know, Africa is just changing very, very quickly. I’ve just been working for a very short time on Africa. It’s just about 20 years, which is nothing in the history of a country or a region and the changes I’ve seen underway are just remarkable and, you know, I hope that people maybe when they hear the word Africa they think of starving children or warlord or something like that that instead they’ll think, oh, maybe that’s somewhere I want to go on vacation or maybe something to think about investing or maybe read another novel about Africa. I hope that they draw that from The Golden Hour.

Jason:
Good stuff, good stuff. Well, Todd Moss, thank you so much for joining us today. The book is entitled The Golden Hour, we appreciate you coming on the show and talking to us about it.

Todd:
Great, Jason. It was a pleasure.

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
AMA