• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

Loading...
See More

Africa's chance to shine

Sep 02 2012 15:24

Related Articles

SA's economy a fighter

SA unemployment rate eases to under 25%

Take advantage of China

SA needs to roll up its sleeves

Zuma: Realise Mandela's dream

China bolsters Africa ties with $20bn loans

 

Johannesburg - The current state of the global economy is bad news for most people, but the situation is better for Africa, according to Zambian economist Dambisa Moyo.

But, she says, African economies need to work harder to fix educational systems, fight corruption and reduce poverty.

Moyo spoke at an investment conference organised by fund managers RE:CM (Regarding Capital Management) in Sandton this week.

“The current economic situation is bad for the rest of the world, but good for Africa,” she said.

Africa has – or will soon have – an abundance of capital, labour and productivity, the three key factors needed for economic growth.

Due to its isolation from global investment, the continent has largely escaped the debt crisis and budget deficits which characterise other economies.

“I used to say it was a great disservice that Africa was not engaged as a global partner,” she said, “now I’m grateful, in a way, because it means economic growth will be driven from here, as we are not facing deleveraging.”

Developed countries – particularly in Europe and Asia – struggle with declining populations and risk
contraction as a result.

But 64% of Africa’s population is under the age of 24 and, increasingly, people are moving to cities. Africa’s population will double to two billion in the next 40 years, resulting in an enormous labour force to power growth.

Productivity accounts for 60% of economic growth and many African countries have higher productivity levels than their counterparts in the developed world, she said.

Africa has made great strides in reducing corruption and securing political freedom, with 63% of African countries free or partly free.

Much of Africa’s corruption problem resulted from the aid regime, and with donors pulling out of the continent, corruption is expected to decrease.

Sub-Saharan Africa is expected to grow at 5.4% this year and 5.3% next year, according to the International Monetary Fund. Africa will be among the top-five regions for growth, after China and India, during this period.

“And yes, I know Africa is not one country, but they (investors) do think of Africa as one conglomerate. This is why it’s so essential for large economies, such as South Africa, Nigeria and Ethiopia, to get it right.

“The rest of Africa won’t go anywhere if people think the large economies can’t get it together,” she said.

Growth rates of more than 5% are good news, “but it’s not enough”. A rate of more than 6% has to be maintained over the years to dent poverty.

Innovative solutions are needed to improve weak education and high unemployment.

People in many countries, such as Zambia, are starting to question the value of education when educated people are without jobs.

“We need to think about what else we can be doing to provide opportunities for livelihoods,” she said, suggesting alternative-skills training linked to export-based sectors and entrepreneurship.

Africa is far more business-friendly than before, with 20 stock exchanges and more than 1 000 listed companies.

In Rwanda, it takes just 30 minutes to open a business, making it the most advanced country in the world in which to do business.

Africa has spent too much time looking to Europe and the US, to its own detriment. It needs to focus on new partners, such as China, she said.

“As my mother said, it’s important for a girl to have more than one suitor,” said Moyo.

Governments also need to focus on regional opportunities, as small economies such as Zambia’s will not be able to compete alone, she advised.

- City Press

* Follow Fin24 on Facebook, Twitter and Google+.


 

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:

SMALL BUSINESS

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

Business tips from the world’s billionaires

We share some of the world's most successful people's greatest tips and who knows, this might just lead you to your first million!

 
 

Luxury living

5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!
What to expect inside a royal nursery

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote

Loading...