Share

‘If Africa’s 1bn people work together, they could change the world economy’

Dubbed China’s “Black Monday”, August 24 sent markets reeling as the world’s second-largest economy suffered massive losses as trillions of dollars were wiped off the stock market.

The Shanghai Composite Index tumble was a major setback to equity markets around the world and signalled the end of China’s “30-year growth miracle”, where the country’s gross domestic product growth rates were largely in double digits. China had become an engine of the world economic growth and there was bound to be a shift as with all cycles. Growth in the country has allowed China to shift to a consumption-driven economy, which is a very natural progression according to Professor Nick Binedell, senior lecturer and founding director of the Gordon Institute of Business Science. 

When asked if we could draw parallels between China’s slowing economy and the Japanese crash in the 90s, Binedell says it is difficult to make comparisons. 

Japan, he says, grew at a phenomenal rate and went from being rated 20th to the world’s second-largest economy but without much innovation. 

Japan basically imitated and improved on the American industrial system. 

“That’s how Toyota came about – the Toyota effect was lower costs and better quality. And that’s what Japan did for 30 years.” 

China is a different kettle of fish, with 1.3 billion people and an ancient city that has modernised in a burst of speed, a little like the United States did from 1880-1950. The challenge for economies that grow with rapid speed is to sustain that growth. 

Binedell believes China is a lot more complicated to govern than Japan, which is more isolated, and lost its way for different reasons. 

“Make no mistake this is a time of significant shifts. Africa rising saw more urbanisation, larger middle classes and to a degree more accountable governments,” says Binedell. 

He believes that if African countries develop a cooperative strategy inside Africa and work together then it will be in a better place to dictate its needs to the rest of the world. 


The African focus needs to be primarily on the Pacific Rim, south-east Asia, India and China where there will still be a lot of action. 

Resource pricing is still a major problem for African economies that still primarily rely on foreign exchange from exports. 

“The power relationship is too often unequal when we have 54 countries. It’s a bit like Europe in the old days. Europe benefited by becoming the European Union and getting the benefits of synergy and the African agenda has to be more about that.” 

Closer to home, Binedell believes that South Africa is a rule-taker with a relatively small economy and needs to fit in. 

“It’s a bit like the football World Cup. Fifa makes the rules and you play by the rules of the game.” 

Africa is our domain to engage cooperatively with other economies and South Africa can be more proactive. The rand-dollar exchange rate or the levels of investment that comes are a consequences of the interdependencies of the real game-changers – which Binedell lists as US, China, Europe, India and Japan. 

For South Africa, regional integration is a must in order to reap the benefits of a continent with a billion people, rich in resources and greater room for development. 

» City Press is the sponsor of the Gordon Institute of Business Science’s forum sessions.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.45
+0.1%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.2%
Platinum
904.58
+0.9%
Palladium
1,012.82
+1.1%
Gold
2,219.17
+1.1%
Silver
24.82
+0.7%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders