Two Africas

The Time Magazine has an interesting article about the fate of two Sub-Saharan countries: Angola and Mauritius. Angola has oil and grew at 35% last year, after years of stagnation. Mauritius has no oil and has been among the top 10 fastest growing economies in the world for the last three decades. Why Mauritius grew and Angola did not is exemplified by the lives of two entrepreneurs, Mr Francois Woo, a Mauritian and Mr Adérito Cassolongo, an Angolan. Here are excerpts:

Woo’s surname and taste for Cantonese food reflect his family’s origins, three generations ago, in Guangdong province in southern China. If you were to create a model for Globalization Man, he’d look a lot like Francois Woo. And his $200 million-per-year business is a microcosm of globalization in action. It buys raw cotton from Asia and Africa, ships it to Mauritius, spins it into yarn and makes it into clothes designed in-house. Those are shipped to retailers in Europe, Asia and the U.S. “We have to import all our raw materials, and we are very far from our customers,” Woo says. “So the challenge is clear. We have to be the most efficient factory in the world.”

More than 4,800 km to the west, in the Angolan capital Luanda, another entrepreneur, Adérito Cassolongo, faces far tougher prospects. As a young man, he taught himself English and wangled a job with the U.N. Then, with a civil war raging, he caught a plane to South Africa, where he slept rough on the streets of Pretoria before becoming a boxer and earning $30 a week. In the evenings, he taught English to other Angolans, then built his own computers from spare parts and used them to set up a computer-training school. Today Cassolongo’s company, Cassca Technologies, is one of the only online testing centers in Angola for international IT certification, and as the economy booms, demand for Cassca courses is soaring. But unlike Woo’s, Cassolongo’s difficulties are entirely domestic. “We face a lot of corruption,” he says,”Documents don’t come out until you pay. You have to have connections everywhere.”

Woo says “going global” is imperative if the business is to survive. That attitude, coupled with Mauritius’ low taxes and ease of doing business, has made the country home to a rocketing finance industry as well. By April 2007, Mauritius was hosting 31,815 foreign companies, including 487 investment funds with a total net asset value of $36.92 billion. Mauritius’ secret? Good governance: the state, run by centrist parties that have peacefully swapped power since independence in 1968, ensures that growth lifts everyone.

If Mauritius is good Africa, Angola is not. An élite cadre of government figures, Angolan bosses and foreign oil companies holds on to the soar-away gains of its 35% growth while the country stagnates in destitution and inflation. Partly that’s due to the lack of a diversified economy to harness the oil wealth. As a foreign diplomat puts it, “If you’re dying of thirst, you can’t drink from a fire hose. The water comes out too fast.” But it’s also due to corruption: a 2004 Human Rights Watch report claimed that $4.22 billion in oil revenues went missing from Angola from 1997 to 2002. As a result, there are two populations within Angola. Private bankers fly in by the planeload, business hotels in Luanda are booked months in advance, and monthly rents in the business district are the highest in Africa, ranging from $54 to $108 per sq. ft. ($600 to $1,200 per sq m). Meanwhile, hundreds of thousands of people live in Luanda’s slums, malaria and cholera are rife, and 70% of the population of 16 million subsist below the poverty line.

The one hope? Bad Africa can forge exceptional businessmen. Angola’s prospects, in other words, rest on men like Cassalongo. “I’m going to make it,” he says. “I take on challenges. And I work.” And perhaps, so will Africa, good and bad.