Africa Roundup: February 2016
08 Feb 2016
Go to any business conference in Africa and it will not be long before someone utters the words “Africa Rising”. The term – which was most memorably plastered on the cover of The Economist in 2011 – has become a catchall for the continent’s recent burst of economic growth. As a phrase, it is used in reference to everything from the continent’s expanding middle class, to the adoption of smartphones by farmers, to the increase in Chinese-built roads.
And for good reason. In recent years, “Africa Rising” – simplistic though it is – has conveniently captured the renewed enthusiasm for investing in African markets. It came at a time when countries like Cote d’Ivoire and Ghana were posting growth rates four to five times that of advanced economies, benefiting from commodity booms, increasing domestic consumption and expanding service sectors. Presidents and prime ministers from across the continent travelled to Beijing, Tokyo, Paris and Washington DC, as foreign governments sought to strengthen trade ties with Africa’s 1bn consumers.
But the times are changing. Over the last 12 months, the lustre of the “Africa Rising” narrative has dimmed. Low oil prices have hobbled balance sheets in major economies like Nigeria and Algeria. The slowdown in China has reduced demand for key exports in South Africa, while subdued growth in Europe has impacted trade with Kenya and Egypt. A strengthening US dollar has put pressure on the cedi, the rand, the shilling and the naira.
These challenges are serious. Yet they do not represent the end of the “Africa Rising” story. While the easy growth of the past decade is over, Africa’s largest markets are nonetheless well-placed to ride out the current turbulence. They are bigger and more diversified than before, with greater levels of transparency and improved business environments. Staving off inflation, encouraging job creation and reducing current account deficits will not be easy, but a range of structural reforms – from subsidy reductions to devolution – is paving the way for sustainable long-term growth.
The collection of articles below reflects just that, together comprising our second Africa Economic Roundup. In this edition, we'll be looking at Algeria’s drive to reduce imports; Egypt’s record-breaking construction of the new Suez Canal; the outlook for pension reform in Ghana; and the use of mobile technology for Kenya’s smallholder farmers. You can also find exclusive interviews with Kenyan President Uhuru Kenyatta; South African Reserve Bank Governor Lesetja Kganyago; Agility CEO Geoffrey White; and US Coordinator for Power Africa Andrew Herscowitz.