May 28, 2019


Africa will be the new China: Investment, co-operation and strategic advantage will boost the continent's exports to Europe (Basil El-Baz MAY 1, 2019, Financial Times)

Over the past 15 years, most African countries have enjoyed sustained economic growth, in some cases at annual rates above 5 per cent, buoyed by rising commodity prices, budget surpluses, foreign investment and fewer conflicts. Services sectors are blossoming across the continent, while a telecommunications boom -- driven by mobile phone usage, in a region where land lines were few, and internet penetration -- is also playing a role, as is a vibrant financial services sector.

Yet 28 of the world's poorest countries are in Africa. Half of its people live in poverty, without access to basic human rights such as food, clean water and housing, while two in five are illiterate. Economic growth, while fast, has come from a low base: gross domestic product per head is just $1,770, about a quarter that of Asia.

Sustainable transformation requires a radical new approach. It is not a services economy that will lift half a billion people out of poverty or create 100m jobs, but an industrial one. Export-led manufacturing will be the key to Africa's success, just as it transformed the fortunes of Asian countries, particularly China, in past decades.

Today, the manufacturing sector contributes just 9 per cent to Africa's gross domestic product, against 17 per cent for the agricultural sector. It also represents less than 2 per cent of global manufacturing, suggesting huge scope for improvement.

The African Union has put the manufacturing sector at the heart of its "Agenda 2063", a strategic framework for the socio-economic transformation of the continent over the next 50 years, which has the agreement and full support of all 55 countries. It is an agenda that, in its own words, has been driven by the "voices of the African people indicating the Africa they want".

Similarly, the launch of the African Continental Free Trade Area last year provides for a single market for goods and services. It allows African-owned companies to enter new markets, expanding their customer bases and, potentially, product ranges. Many predict it will also act as an impetus for investment in much-needed cross-border infrastructure, creating employment and developing local experience in engineering projects.

Posted by at May 28, 2019 4:01 AM