How Africa Works [Chapters 5 - 6]

What we can learn from Mauritius and Ethiopia

Before turning to Mauritius and Ethiopia, I feel honour-bound to defend Botswana against what I consider a deeply unfair criticism in Chapter 4. On at least two occasions, Studwell describes Botswana as an unhappy place. His framing runs roughly as follows: Botswana’s failure to pursue an “inclusive” development path - above all, the absence of manufacturing-led job creation - has produced a society that is wealthy but deeply divided. He uses the 2023 World Happiness Report [PDF] to underscore the point, leaving the clear implication that unhappiness - at least in Botswana’s case - is an indictment of policy choices.

Botswana may well score poorly on the relevant wellbeing metric but the question is what that metric is actually measuring, and therefore what it can legitimately be used to explain. The WHR ranks countries by average life evaluations over 2020–2022, using the Cantril Ladder (0–10) from the Gallup World Poll. The report explicitly cautions readers not to mistake these rankings for an index of causal drivers. They are people’s own assessments of their lives, not a composite score of the factors that might influence those assessments. The report does, however, model cross-country differences using six variables - one of which is healthy life expectancy (alongside GDP per capita, social support, freedom, generosity, and perceived corruption).

That matters for Botswana, because the country lived through a health catastrophe that was historically extreme. Before turning to the data, permit me a personal recollection. Many years ago, I had a friend from Botswana. During a casual conversation, she asked whether I had ever taken an HIV test. I said no - the thought had never crossed my mind. She was surprised. She took a test every few months, she said, regardless of any specific exposure. Then she asked whether I had ever known anyone who had died of AIDS. Beyond Arthur Ashe, I confessed, I had not. She proceeded - almost matter-of-factly - to list classmates she had lost while growing up in Botswana: three or four from her class alone. It was a sobering moment. Her attitude to regular testing made immediate sense.

Botswana’s HIV/AIDS epidemic inflicted mortality and morbidity shocks large enough to change how people might appraise the quality and trajectory of their lives for years afterwards, even when GDP per capita is relatively high. A World Bank report on Botswana’s HIV/AIDS development impact (drawing on late-1990s data) describes very high adult prevalence and stark mortality impacts, with estimates implying a dramatic collapse in life expectancy under the with-AIDS scenario relative to a counterfactual without AIDS. Our World in Data summarises the same broad pattern showing a sharp life expectancy decline beginning around 1990 that coincides with HIV’s rise, followed later by recovery as treatment and prevention improved.

Given that the WHR’s own explanatory model treats healthy life expectancy as a major correlate of life evaluations, a country that has lived through decades of widespread illness, bereavement, and disrupted family life has an obvious pathway to depressed life evaluations. There is Gallup-based research linking HIV/AIDS to lower life evaluation - the same metric used by the WHR. In a 2009 paper, Angus Deaton and co-authors use African Gallup World Poll data (including the Cantril Ladder) to study links between disease and self-reported wellbeing during the HIV/AIDS epidemic. They find suggestive evidence that higher HIV prevalence is statistically linked to lower life evaluation. They also find that the death of immediate family members has substantial effects on negative affect measures such as depression and sadness.

Even with a 66 per cent reduction in new infections between 2010 and 2022 - a world-leading level of treatment success - HIV/AIDS remained the leading cause of death in Botswana throughout the decade to 2019. The prevalence figures remain staggering: among women aged 45–49, more than half are HIV-positive; among men in the same cohort, nearly 40 per cent. A population-based study in Botswana's highest-prevalence districts found that roughly a quarter of women and a third of men displayed symptoms of depression - with anticipated HIV stigma (the fear of discrimination should one's status be revealed) independently associated with depressive outcomes among men. It is not difficult to see how a society saturated by a disease of this magnitude - one that has touched nearly every family, claimed classmates and colleagues, and attached stigma to disclosure - might register as unhappy on a global survey. The mental health burden alone is immense, before one even considers the economic and social toll.

To put Botswana’s WHR result in perspective, it sits in the bottom ten: 132nd out of 137 - adjacent to Congo (DRC) and only a few ranks above Lebanon - an awkward neighbourhood for a stable, upper‑middle‑income state, and a hint that something other than industrial policy is weighing on life evaluations. But using Botswana’s WHR position primarily as a verdict on economic-policy design risks attributing to distributional failure what may partly reflect the long shadow of a health catastrophe - one that Studwell mentions only in passing, as a bracketed aside. And that, to my mind, is very unfair.

A pula e lo nele ka masubelele, Batswana.

Mauritius

"We don't have a leading goose, a Japan," observed Ngozi Okonjo-Iweala in 2015. She was invoking the "flying geese" model of development, in which a lead country creates a slipstream for others to follow. Japan played this role in Asia and Taiwan, South Korea, and ultimately China followed behind it, each accelerating in turn. In sub-Saharan Africa, such a lead goose is conspicuous by its absence. Worse still, the few success stories that do exist are routinely dismissed. Botswana? A small country, we are told, whose circumstances are too idiosyncratic to offer lessons for anyone else. I cannot recall ever hearing Nigerian policymakers reference Botswana as worthy of even a cursory study. Studwell, with his framing of Botswana's unhappiness as downstream of flawed policy choices, may have unwittingly handed the dismissers fresh ammunition.

So what do we have left? Mauritius, which is even easier to dismiss than Botswana. Is it even an African country with all the Indians there? And where is it anyway? The irony is that Mauritius is not merely “African but successful.” It is, by any serious standard, the continent’s most complete post‑independence development story. Studwell notes that GDP per capita rose from under $300 in 1970 to about $12,000 by 2023, growth that averaged about 4.4% per capita per year - and that Mauritius is the only African country (including North Africa) ranked “very high” on the UN Human Development Index. That should make the island compulsory reading, not a footnote.

Of course, the first instinct is to explain Mauritius away. It is an island. It has no pre‑colonial political economy to untangle because no one lived there before Europeans turned it into a node in slavery, indenture, and sugar. Studwell himself underscores this “blank canvas” advantage and points out something more subtle: because no group was dispossessed of ancestral land, the politics of grievance that tears at many mainland states had less combustible fuel. But the same paragraph contains the key rebuttal to any lazy determinism: none of it meant anything without political leadership, compromise, and an actionable plan.

And if you want a reminder that Mauritius was never “destined” to succeed, consider that development economists once described its prospects as “truly terrifying.” The island faced acute youth unemployment, population pressure, and the post‑independence jitters that so often explode into ethnic conflict. It is precisely because Mauritius began as a colonial assemblage - fractured, plural, tense - that it remains a deeply African story. Even the lingua franca, Mauritian Creole, is a French base salted with African, English, and Asian words.

So yes, talk about Mauritius we must. But to learn from the island, one must ask a different question than "How did they get rich?" The real question is what Mauritius did that most African countries do not do - or cannot bring themselves to do for long enough. Studwell's chapter is valuable because it draws heavily on interviews with the politicians and policymakers who built the system, and that matters: Mauritius rarely receives the serious analytical attention it deserves. What I got from the chapter was a set of deliberate, sometimes ruthless choices.

The first unusual thing about Mauritius is its elite consensus around economic development. Political rivals were co-opted into government - Gaëtan Duval (a flamboyant libertine with a voracious sexual appetite that did not discriminate between men or women) into Foreign Affairs/Tourism/Emigration and a Franco‑Mauritian, Paul Hein, into Justice. The first post‑independence parliament was even extended by four years explicitly to establish unity and set a course of development. Ministers and business leaders met regularly in the Joint Economic Council, usually at the prime minister’s office. The private sector was engaged in overseas trade missions. The tone was set: government and private sector as partners, with government the dominant one. This is light‑years away from the winner‑take‑all politics that prevails almost everywhere else on the continent. Studwell notes that between 1976 and 2019, Mauritian elections overwhelmingly produced pre‑negotiated multiparty coalitions. The electoral incentives pushed politicians toward alliances across ethnic and religious lines. Elite consensus can be found in other African countries, of course - but it is often a consensus for looting, not for development. In Mauritius, to apply a Yoruba aphorism, everyone slept facing the same direction.

Sir Seewoosagur Ramgoolam, Doctor, Politician, Statesman. Founding Father of Mauritius

The second thing I found unusual was Mauritius's approach to export processing zones. By definition, an EPZ is a zone - a carved-out enclave, typically a port or industrial park, where special rules apply. This is how they operate everywhere else in Africa: a sideshow in some corner of the country, often disconnected from the broader economy. What Mauritius did in December 1970, after a year of negotiation between a ministerial committee and the private sector, was one of those innovations that, once you hear it, makes you wonder why everyone else hasn't done the same. Borrowing an idea from Puerto Rico, they passed an EPZ act that created a zone without geographic limits. Any factory, anywhere on the island, could incorporate as an EPZ enterprise so long as it met the act's terms and thereafter it enjoyed duty-free imports, income tax concessions over twenty years, and a lower minimum wage with no right to unionise. The entire island became the zone. This “nationwide rulebook” approach did not emerge from vibes. Studwell notes that the policy framework was worked out by a ministerial committee in constant liaison with the private sector. Even the University of Mauritius makes an appearance in this story as a developmental institution. The university recruited an engineering lecturer, Edouard Lim Fat, who studied Taiwan’s Kaohsiung EPZ and wrote up the model for Mauritian policymakers. By the end of 1976, Mauritius had 85 EPZ factories employing over 16,000 workers.

As a Nigerian, I have been so scarred by import substitution that I never wish to hear those two words again. If it turned out that Mauritius merely pursued import substitution but more competently, I was prepared to skip the chapter and move on. But Studwell’s account is more instructive. Mauritius did begin with targeted import substitution in the 1960s (tariff protection, temporary monopolies, tax exemptions, cheap credit, and a Development Bank of Mauritius). Yet the strategy created only modest jobs; its main political‑economy benefit was that it pulled the sugar barons into new lines of business - not a permanent shelter for inefficiency.

The third unusual thing is sugar - or rather, what Mauritius did with it. When the EEC reset sugar quotas in the early 1970s - at the height of soaring prices - some producers (Jamaica among them) cut their guaranteed quotas in favour of market exposure. Mauritius did the opposite by locking in the largest fixed‑price quota allowed, securing 39 per cent of price‑guaranteed EEC sugar imports. The market price later collapsed from £110 to £13 per tonne; and so Mauritius, for decades, received far more for its sugar than the market would have paid. Even better was what came next: the state refused to let sugar rents turn into a permanent occupation for the sugar barons. It created a monopoly export agency - the Mauritius Sugar Syndicate - which made the rents visible and taxable. It then progressively increased taxes on sugar receipts: they rose from 5 per cent in the 1960s to 23.6 per cent by the late 1980s, explicitly to discourage reinvestment in sugar and push capital into new sectors. The sugar export tax and manufacturing incentives helped spawn diversified conglomerates (Ciel Group among them). As a former EPZ Development Authority chief put it, without government intervention one sugar magnate “would still be planting sugar.”

A fourth distinctive feature deserves emphasis: Mauritius treated industrialisation as continuous learning, not a one-off export boom. Manufacturing value added grew at roughly 17 per cent per year through the 1970s; by 1985, textiles had overtaken sugar as the main foreign-exchange earner. But the real achievement was staying in the business of upgrading. The government built the unglamorous institutional machinery that most African states never develop, or develop briefly and then abandon: standards bureaus, vocational training boards, technology diffusion schemes that rewarded firms for securing ISO certification¹. Labour productivity in manufacturing rose by 60 per cent between 2000 and 2010. And the ownership story matters too: by the turn of the millennium, domestic firms controlled roughly 60 per cent of the textile industry. The point was to attract foreign investment and to learn the industry well enough to own it.

Not all has been perfect, and Studwell is clear‑eyed about the island’s later drift. Manufacturing’s share of GDP fell from over 20 per cent in the mid‑1980s to around 11 per cent by 2020; unemployment rose again; and the growth of luxury tourism and offshore finance made it easy to tell a comforting story about services replacing industry. Studwell’s verdict is that Mauritius “lost the plot.”

Mauritius built a political economy in which economic development was the common language of competing factions, and in which export manufacturing - however imperfectly sustained - was used as the escalator for mass employment and know-how. It did this in a society that began in imported slave labour, and that could easily have hardened into permanent communal politics. Instead, it created mechanisms of inclusion, bargaining, and discipline. Its most “African” accomplishment is that it solved - better than almost any other African state - the continent’s central political problem: how to build a governing settlement in a plural society that makes it expensive to pursue ethnic advantage at the expense of national development. That blank slate helped and a longer colonial presence left a stronger administrative base - state revenues were already a quarter of GDP by the late colonial period, and the civil service was unusually substantial by independence. But those were all inputs, not guaranteed outcomes.

Mauritius is a proof of concept - evidence that an African country can forge an elite consensus around development, harness commodity rents without being consumed by them, and make exporting a national habit rather than an enclave curiosity. It’s a shame that so much of the continent has convinced itself that there’s not much to learn from this remarkable island’s success story.

- Feyi

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Ethiopia

You can tell Studwell was waiting to write about Ethiopia, for he presents it as the most ambitious and analytically revealing case in the book. The first large, poor, and ethnically diverse African country to attempt a full-spectrum developmental strategy explicitly modelled on East Asia. Whereas Mauritius demonstrated what could be done in a small country with cohesive politics, Ethiopia was a test of whether the same developmental policy logic could work on a far bigger scale under harsher political and social conditions.

Meles Zenawi

The chosen timeline of Ethiopia's developmental journey started in the 1990s with its "philosopher-king" leader, Meles Zenawi. Studwell portrays the late Prime Minister as one who viewed the poverty of his nation as an intellectual challenge. Zenawi wrote a 34-page document titled "An Economic Development Plan for Ethiopia". This plan prioritised the 85% of the population living in rural areas, arguing that without a "structural transformation in the productivity of peasant agriculture," the nation would never industrialise. Under Zenawi's leadership, Ethiopia explicitly rejected the "Washington Consensus" (deregulation and privatisation). He argued that in a state with "weak markets", the government must act as the primary allocator of credit to prevent capital from fleeing into real estate or imports rather than manufacturing.

Ethiopia's developmental strategy was built on two pillars. The first was agriculture. Unlike many African states that prioritised urban elites, Zenawi focused on the smallholder farmer. The government established the Agricultural Transformation Agency (ATA) to modernise household farming. The goal was to replicate the Asian "yield explosion" by providing better seeds, fertilisers, and extension services. Zenawi personally chaired government agricultural meetings, ensuring that the highest levels of the state were focused on rural productivity. Studwell observed that Ethiopia's focus on agriculture had dramatic results. Over two decades, Ethiopia achieved sustained increases in crop yields and total output. Food security improved markedly, and famine disappeared as a mass phenomenon. Rural incomes rose, creating domestic demand, the indispensable foundation for industrialisation. He insisted that this success was not accidental. It reflected the same logic that underpinned East Asia’s rural transformations: labour-intensive agriculture, small plots, state support, and relentless pressure to increase productivity.

The second pillar for Ethiopia was infrastructure as an anchor for manufacturing. The state directed almost all available capital into massive infrastructure projects to lower the cost of doing business. The Grand Ethiopian Renaissance Dam(GERD) was the crown jewel of this strategy. Zenawi viewed it not just as a power plant, but as a symbol of Ethiopia's "resurgence" and its ability to fund its own development without being beholden to Western donors. The government also identified manufacturing as the only sector capable of absorbing surplus rural labour at scale and raising skill levels without requiring long educational lead times. Ethiopia built sprawling, state-of-the-art industrial parks (such as Hawassa) specifically designed to attract global garment manufacturers searching for the "last frontier" of cheap labour. Studwell notes that Ethiopia succeeded in attracting global firms that had previously invested almost exclusively in Asia. Low wages mattered, but so did infrastructure, policy coherence, and the credibility of the state’s commitment. By the late 2010s, Ethiopia had become one of the fastest-growing manufacturing exporters in Africa, particularly in garments and the "light" industries.

The "Ethiopian Miracle" began to falter after Zenawi's death in 2012, due to several structural flaws identified by Studwell. For nearly two decades, Ethiopia delivered some of the fastest growth rates in the world. Poverty declined sharply. Infrastructure expanded. Manufacturing capacity emerged where none had existed. But the federal structure Zenawi crafted, based on ethnic regions, collapsed into conflict. The chapter directly confronts the civil war that erupted in 2020. Studwell treats the conflict not as an aberration but as a structural risk inherent in Ethiopia’s political settlement. A centralised developmental state built on coercion can deliver growth, but it must eventually confront demands for inclusion, accountability, and redistribution. Ethiopia’s leadership failed to manage this transition. By 2024, Ethiopia faced a severe fiscal crisis, requiring a massive support package of over $16 billion from the IMF and the World Bank to manage its debt and currency crises. Unlike the Asian Tigers, Studwell argues that Ethiopia was slow to allow private competition in key sectors like telecommunications and banking, which eventually "crowded out" private investment. He concludes the chapter with careful balance. Ethiopia does not invalidate the developmental state model - nor does it vindicate authoritarianism as a solution. Instead, it demonstrates both the power and the peril of attempting late development under extreme conditions.

After two weeks of writing about this book, I am sure readers are already aware of my misgivings. There is no need to repeat much of what I have said, other than the fact that reading this vintage Studwell chapter neither improved my mood nor bolstered his arguments. Ethiopia was the rule that became the exception. Here is a country that followed Studwell's preferred policy preferences to the letter, but still came up short of East-Asian style success. Over the years, critiques of Ethiopia's developmental strategy have accumulated. For example, manufacturing jobs have not lived up to what they were promised to be. One study used a randomised control trial to track workers in Ethiopian garment factories. They found that workers often found factory conditions so gruelling and pay so low that they frequently quit within the first year to return to informal self-employment or farming². The study highlighted that factory wages were barely enough to cover basic food and rent, and the physical toll of industrial work often led to worse health outcomes than traditional agricultural labour. The writer Christopher Clapham has also observed that Ethiopia's developmental success was built on a rigid "command and control" model that was politically unsustainable. By using the state to direct all resources, the government marginalised ethnic groups not aligned with the central EPRDF leadership, sowing the seeds for the civil war that began in 2020³. The IMF criticised Ethiopia’s state-led model for "starving" the private sector. The Commercial Bank of Ethiopia (CBE) directed the vast majority of its credit to state-owned enterprises (SOEs) and the GERD. Private businesses faced a credit ceiling, making it nearly impossible for local manufacturers to get loans for machinery or expansion. The result was that Ethiopia built world-class industrial parks, but local Ethiopian firms were too under-capitalised to occupy them, leaving the parks almost entirely for foreign (mostly Chinese and Indian) firms⁴. The World Bank also chimed in by noting that structural transformation in Ethiopia did not take off because of some of the policy choices. Despite the hype, manufacturing remained stuck at around 5% of GDP. Ethiopia built the "hardware" (roads, parks, dams), but it failed on the "software" (customs efficiency, foreign exchange availability, and logistics). By 2024, many factories in the parks were operating at only 30–40% capacity because they could not get the US Dollars needed to import raw materials⁵.

For me, Ethiopia represents the strongest refutation against Studwell and the contradiction at the heart of his thesis. It showed the weakness of Studwell's rigidly prescriptive policy sequence. There are indeed very useful lessons that have crystallised out of the success of East Asia, but Studwell has always insisted that his prescribed sequence is instrumental to the mechanics of success. But in his argument, Ethiopia did follow that path and did not succeed. His fallback to using politics to excuse the failure of Ethiopia frankly makes his criticism of Botswana look ridiculous. If political stability matters, then insisting on a particular policy sequence (as opposed to how political leadership learns and adapts from trying different policies) is untenable. I suspect Studwell is resistant to this view because it not only upends this work but also his more popular thesis on Asia. So far, the only thing Studwell has been able to show in this book is that Africa is not Asia. We already know that, but he keeps trying to grasp many weak straws.

-Tobi

1. See Made in Africa: Learning to Compete in Industry (Carol Newman, John Page, John Rand, Abebe Shimeles, Mans Soderbom, Finn Tarp), Page 51

2. Impacts of Industrial and Entrepreneurial Jobs on Youth: 5-year Experimental Evidence on Factory Job Offers and Cash Grants in Ethiopia (Christopher Blattman, Stefan Dercon, & Simon Franklin)

3. The Ethiopian developmental state (Christopher Clapham)

4. IMF Country Report - Ethiopia

5. On the Path to Industrialization : A Review of Industrial Parks in Ethiopia - World Bank Policy Report

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How Africa Works [Chapters 7 - 8]