Monday, July 12, 2010
David Smith in Johannesburg
The Observer, Sunday 11 July 2010
Ten years ago the Economist pulled no punches in a cover story about Africa with its headline: "The hopeless continent." Now Africa is leading the way with a "spectacular" recovery from the global recession thanks to decades of market reform and strong trade ties with China, the African Development Bank's (ADB) chief economist said last week.
Mthuli Ncube, predicted a growth rate of 4.5% for the continent's economies this year. The bank expects more than 5% growth next year, then a return to the average of about 6% Africa enjoyed between 2003 and 2008 before the recession bit.
"Africa is leading, believe it or not, global economic recovery in the sense of being such a strongly recovering zone compared, for instance, to Europe or the US," Ncube told the Observer. "If you look at the ranking, it's China, India, then Africa and then Brazil. That is the untold story about Africa."
He predicted that China will double its investment in Africa in the next few years, with the establishment of manufacturing parks likely to be the next big development: "At the moment East Africa is the shining zone: Ethiopia, Rwanda, Tanzania. These are countries that basically rely on agriculture and services."
The Ethiopian famine that inspired Bob Geldof's Live Aid concert 25 years ago this week was the defining image of a war-torn continent, eternally hungry, helpless and dependent on foreign aid. But the ADB is the latest voice to argue that Africa is poised to become a serious global player. Many argue that, after failed socialist experiments, it is now embracing capitalism and reaping the rewards.
A report last month from consulting firm McKinsey & Company concluded that "global business cannot afford to ignore the potential" of Africa and lauded its governments for acting in recent years "to end political conflicts, improve macroeconomic conditions and create better business climates".
Africa has huge mineral reserves, underexploited farmland and a booming young population. Trade and foreign investment have increased fourfold in a decade. Numerous problems, including entrenched poverty, political instability and an Aids epidemic, still cast a shadow, but Ncube estimates that one in three Africans is now part of a burgeoning middle class: "We do worry about the bottom of the pyramid in Africa, but there's something to be said about the middle of the pyramid. We say very little about the African middle class.
"These are your consumers and they want the same things. They want mobile phones, they want to travel, they want to send their children to the best schools. The issue now is capacity to live out and achieve those aspirations."
From hopeless to hopeful continent, symbolised perhaps by the first African World Cup that ends today. But there is still a very long way to go.
Posted by FRIENDS of ETHIOPIA:: at 11:25 PM