Africa as a development frontier of the 21st century

How Africa Works: Success and Failure on the World’s Last Developmental Frontier 
Joe Studwell 
Profile Books, 2026, 448 pages, ISBN: 978-0802158437 

As Africa’s development path remains convoluted, the demand for answers remains strong. The success of the latest book by the development economist Joe Studwell proves the point. His book How Africa Works has not only won the praise of the Financial Times and Bill Gates but also found a wide audience. In bookstores it is hard not to find it these days. 

This is unusual because the last time books about development were bestsellers probably dates to the days of Mao Zedong, Frantz Fanon or Eduardo Galeano. Studwell takes a more conventional approach, building on the reputation he won with his widely successful forerunner “How Asia Works,” which chronicled the economic rise of Asia (more exactly: Far East Asia and the so-called “Asian Tigers” Hong Kong, Singapore, South Korea and Taiwan). 

In his Asia book, he identified three key success factors: (1) land reform, (2) focused industrialization and exports and (3) support for small and medium-sized enterprises. These are also the main ingredients in the development recipes he cooks up in his new book. In general, and with an audience of FT readers in mind, he does a fairly decent job. 

The Africa book has three major building blocks: First, it presents the development “context” with Studwell setting out historical differences in geographical, historical and legacy factors of colonialism between Africa and Asia. His argument is that primary education in Asian countries such as Taiwan and South Korea was at the beginning of the 60s, when most African countries gained independence, much more advanced than in African countries due to a different history of colonialism (Western vs. Japanese) and population density. He concludes that Asia had a better starting position. 

Furthermore, Asian countries enjoyed relative peace compared to the frequent civil wars and almost permanent violent conflicts in Sub-Saharan Africa from the mid-1970s onwards when the real divergence in wealth between Asia and Sub-Saharan Africa happened. As a third beneficial factor, he points to good governance in Southeast Asia, especially after the 1980s, along with better and stronger public governance. 

The second part of the book is an assessment of four developmental success stories in Africa, where countries were or are experiencing strong growth under strong and strategic leadership: Botswana, Ethiopia, Mauritius and Rwanda. Studwell finds parallels to the Asian model. For instance, Ethiopia’s land reform in favor of smallholder farmers relieved the population from hunger and stimulated the national economy by creating a stepping stone for textile manufacturing. Another example is Rwanda’s recent attempt to model the country’s development according to the example of Singapore. 

Although he cites Ethiopia and Rwanda as examples of successful development Studwell does not turn a blind eye. In a critical assessment he highlights the problems that come with “strong leadership” or dictatorial approaches, including conflicts with neighboring countries, as well as the expansion of gross inequality in Botswana under the current leadership. 

The third part of the book lays out a blueprint to follow for African countries in general, mainly to change the largescale agricultural structures in countries such as Côte d’Ivoire, Ghana or Tanzania into a fairer distribution for smallholders. In the case of North Africa, the key question of development for Studwell is how to become manufacturing hubs for industrial growth (and integrating into the European value chain). 

Overall, Studwell draws a rather optimistic picture for Africa as a development frontier of the 21st century and offers his readers a positive outlook and good talking points at the next Davos World Economic Forum (also where the FT is ubiquitous.) It is rightly promoted as a well-written introduction into Africa’s growth prospects and the all-too-often neglected opportunities that exist on the continent. 

However, there is a problem: Studwell’s book fails to consider several key development challenges. 

The biggest and most important oversight is the book turns a blind eye to the role of the financial sector, globalization and global capitalism. Authors like Dafe, Kaltenbrunner, Kvangraven et al. showed in a 2023 paper in the journal Development and Change how the lack of a strong and diversified financial sector harms the establishment of local bond markets and local currency lending in Sub-Saharan Africa. While Asian banks were crafted as instruments of industrial policy, most African banks are still reproducing colonial hierarchies, designed to reallocate surplus funds. 

My second issue with the book is the historical context. Regardless which philosophical viewpoint one takes, it is important to look at the trajectories of developing countries up to the 1980s. Consider Senegal, for example: Since independence in 1960, the country pursued a course of rapid industrialization, protecting its nascent industries with tariff and non-tariff barriers. Progress was rapid and by the late 1970s Senegal was the most industrialized country in Francophone Sub-Saharan Africa. 

However, much of the external debt in developing countries had been accrued at floating interest rates, meaning that the currency risk was borne entirely by the borrowing country. A seismic shock occurred when the global benchmark LIBOR on six-month US dollar deposits reached 18.5 percent in late 1981 during the so-called Volcker shock. Rates did not fall below 9 percent until 1985. 

For Senegal, the impact was twofold. First, US dollar-denominated floating rate debt required dramatically higher debt service from an economy whose export revenues – groundnuts, phosphates, fish – were priced in commodity markets. The exports were priced in US dollars, but Senegal’s revenues came home as CFA francs. When the US dollar appreciated against the French franc, and therefore against the CFA, Senegal received fewer CFA francs per US dollar of export revenue. The purchasing power gain from US dollar appreciation did not accrue to Senegal but to US dollar holders. 

The question arises why Senegal did not hold US dollars? Under the monetary agreement between African countries using the CFA franc as a currency and France, Senegal’s central bank was required to deposit 65 percent of its foreign exchange reserves at the French treasury. Export revenues were converted through the French treasury. In other words, there was no mechanism for Senegal to simply accumulate and hold a US dollar reserve position. 

Second, the Volcker shock triggered a global recession with commodity prices collapsing and Senegal’s exports being less competitive in US dollars than they would have been in CFA franc which was pegged to the French franc and without the possibility to devalue the currency. 

This double whammy triggered a financial crisis that Senegal tried to escape from with the help of an IMF program. In exchange for access to credit markets, the country had to accept oversight over its fiscal policy, on top of the previous loss of monetary sovereignty through the CFA franc. Senegal was also asked to liberalize the economy, leading to the systematic dismantling of its infant industry as enterprises could not compete with foreign imports. 

Let’s compare this to South Korea: Under US protection during the Cold War the East Asian country was able to manage its exchange rate and used public funds to create domestic strong industries that were able to earn US dollars in exports that would be used to service external debt. When the country had to accept the first IMF program in its history in 1997 during the Asian financial crisis it was already one of the leading “Asian Tigers”. 

This historical context and background is absent from Studwell’s book, which is a serious shortcoming. The book contains additional claims and views about education, geography and other subjects that are debatable. A debate is always good and to be welcomed, but it would be a more profound read had Studwell included more depth and substance rather than opting for the type of broad overview typical of what’s found in an airport bookshop.