A note of caution on African economies
Africa may be big and some of its countries growing rapidly, but sustaining that growth will be difficult in the absence of structural reform and investment in infrastructure
The recent resurgence of growth in many African economies, including SA and Nigeria, has revived some of the optimism that surrounded the continent in the early 2000s, when it was hoped that it might become a driver of global economic growth. However, while Africa will likely outperform consensus expectations in the short term, the continent’s long-term outlook is less rosy. Talk of the region as the "next China" is wide of the mark, says a new research report by Capital Economics’ Africa economist, John Ashbourne. The report is particularly bearish on SA, noting that it may be a significant underperformer once the initial confidence spurt related to Cyril Ramaphosa’s presidency subsides and the country’s deep-seated structural flaws resurface. One of the arguments Afro-optimists advance in support of the view that the continent could become a key driver of global growth is its scale. Africa is the only emerging market region nearly as populous as China or India, and it’s the last p...
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