A new report says African countries could become a dominate force in global trade over the next 50 years. The African Development Bank says their economic future depends on taking advantage of innovation, new technologies and natural and human resources.
Chief bank economist Mthuli Ncube says the report , Africa in 50 Years Time, is very encouraging.
“Absolutely. We see a moment for Africa to think visionary about where it should be in 50 years time. And this report is an attempt to begin getting that conversation going, to begin to get Africans to be forward looking. And also to raise the question on what needs to be done? Who has what responsibility? And also (to) look at all the opportunities frankly that are available in Africa,” he said
Ncube believes Africa can become a dominating force in the global economy based on its recent record.
“The Africa region has done rather well compared to 20 years ago. Africa has weathered the global crisis rather well, especially the non-commodity producing countries. Surely this is a lot more than a commodity story. It’s about a dynamic Africa. You see a lot of countries that are well managed economically, good managers. You begin to see efforts to diversify these economies. You’re beginning to see growth of an internal market led by a burgeoning middle class,” he said.
A growing demand by the middle class and increasing trade between African countries act like a shock absorber for the global economic slowdown.
“Of course, when I say this, Africa will not be unscarred. It will be. Already you could see trade finance flows kind of drying up because this is coming from the global banks, which are under pressure from the global financial crisis, the banking crisis. But overall, African countries will do ok in our view,” said Ncube.
Despite the economic slowdown hitting much of the world, the African Development Bank predicts strong growth for sub-Saharan Africa.
“We expect sub-Saharan Africa this year to grow at about five and a half percent and even higher next year. North Africa to be slower because of the Arab Spring, but going forward it will also recover. So we’re very bullish about Africa’s performing during the crisis,” he said.
The continent is rich in oil and gas and its minerals are already feeding the growing demand for new technology. Ncube also believes that climate change actually offers Africa new opportunities.
“There’s a lot of sunshine, to put things more in a simplistic way. Solar farms, clean energy, hydro power. So much potential in a lot of African countries on hydro power,” said Ncube.
He said one of the greatest African resources is the people, whom he describes as entrepreneurial by nature. He added, however, that the skills of African workers should be improved. Ncube says if Africa is to fulfill its potential it must overcome a number of challenges.
“Easily as much as $45 billion a year in infrastructure demand and investment goes unfunded annually. So there’s a need to close the infrastructure gap. Now number two, there’s still a need to deal with the agricultural sector in Africa – a better way to intervene in this sector in an unemotional but constructive way that crowds in the private sector. And number three is to support the private sector in Africa, so by improving investment climate. A lot has been done, but more still needs to be done,” he said.
The continent has also been hit hard by malaria, HIV/AIDS, TB and other diseases that have taken a toll on the workforce. But the economist says Africa is on the way to overcoming those problems. Ncube called on investors, the private sector, policymakers and others to read the African Development Bank report and discover the opportunities that are available on the continent.