Sixteen of the fastest growing countries in the world are in Africa. No you didn’t get it wrong. Seven are in South East Asia followed by three in Central Asia. So has Africa’s time finally come and the continent will now forge ahead?
Ethiopia is predicted to grow at least 8% per annum for the next few years. If so, it will be as normal for Eleni Gabre-Madhin, CEO of the Ethiopia Commodity Exchange, to take center stage globally as for her Western and Asian counterparts.
According to the IMF we will see more African countries with massive growth during the next few years. They also forecast that many African economies will outpace Asian countries, even China and India.
The shoe is on the other foot
Angola is now lending money to it’s former colonial master Portugal struggling in the Euro crisis. Not so long ago nobody would have thought such a development possible.
Many of us have worked extensively to further the interests of Africa and hence hope real progress has now started. But somehow can’t help wondering what will go wrong this time because something usually does. Really hope it is correct that Africa as a whole will grow 7% on a yearly basis over the next two decades?
Surging demand for raw materials and foreign investment driving progres
The continents changing fortunes seems to be, at least partly, based on China’s demand for raw materials, higher commodities prices and increased inflow of foreign investment. Africa’s rising middle class have also fuelled growth in domestic demand. There is global interdependence in respect of production and demand. Africa offers producers around the world a vast and growing market that will keep on expanding.
African governments improving
Government is improving in Africa and corruption is less than it used to be. Seems the NEPAD peer review mechanism have made a difference when it comes to implementing true democracy, good corporate governance, transparency and eradicate corruption. Nowhere else in the world has such a process ever taken place and its uniqueness was well illustrated by former President Bush’s remark, “We don’t do that in America”. More and more governments are being responsible and putting money aside to cushion their economies. Know-how is also improving. As a result of statisticians improving their data in Ghana their GDP was revised up by as much as 75%.
Trade not aid
Africa, the poorest continent, according to many analysts, bares the brunt of the continued rigging of trade rules in the WTO. And in order to prosper the continent needs to trade out of poverty, as opposed to relying on aid. According to the UN, just one percent of increase in exports from Africa is worth a staggering five times the amount it receives in aid and debt relief.
Africans recognises their responsibility to wipe out the gap between the continent and the rest of the world. Africa wants to improve its role in the world economy. Its contribution to world trade is hopelessly small. They want to get its house in order, but the rest of the world needs to play its part as well. For example, Africa is told it may not subsidise its agriculture, so the Western world shouldn’t be doing so either, but as we know both the EU and US does. Jean Chretien put it very well when he stated “we must realize that little progress will be made with investments and trade if Africans continue to be refused access to our markets”.
African media has a role to play
Can’t help thinking about what President Chissano told me in 2004. According to him a major obstacle to improving the image of Africa is that the African press, like it’s Western counterparts, focus on scandals to grab headlines. Naturally a free press is essential, but the down side of that is that far too many negative stories come out of Africa, deter foreign investors and hence have a detrimental affect on the progress of the continent. Maybe it would be a good idea for African media to also show case African success stories? That Angola is growing faster than China would be a start.
The world’s new manufacturing centre?
Unfortunately commodity driven growth doesn’t generate enough jobs. However, now with salaries increasing in Asia Africa could become the new manufacturing centre. Kenya and Uganda have already increased their export sector. To make this reality the WTO need to facilitate market access for products made in Africa on the world market. If not, Africa may continue to be a scar on the the conscience of the West.
There are many obstacles to Africa continuing to progress. Political instability, weak rule of law, corruption, bad infrastructure as well as poor health and education. So without the political will to reform, the current growth rate will be difficult to sustain. However, for outside companies looking for new markets a whole continent almost sounds too good to be true. But that’s what a developing Africa, with a gradually burgeoning middle class and numbers of skilled workers constantly increasing would constitute. A vast and growing market for the world’s manufactured products, intermediate goods and services. Add to that UN figures showing that investments in Africa provide higher rates of return than anywhere else in the world. It has been said for more than a decade that Africa’s time has come. But maybe now with the changed world order due to the recent global crisis, will Africa finally be able to progress? What do you believe? Will Africa now be able to forge ahead or will the gap between Africa and the rest of the world remain as wide as it is?
(Photo copyright World Economic Forum (www.weforum.org)/Photo by Zahur Ramji / Mediapix)