The continent continues to be discussed like a country
"‘Africa Rising’? ‘Africa reeling’ may be more fitting now.” Who can pass up a good headline? Apparently not The New York Times.
To be fair, the sentiment of the headline is “a thing,” as Americans might say. According to a senior banker, “serious investors are no longer talking about the continent.”
But inevitably, some still are. The CEO of one of the largest conglomerates on the continent tells delegates, at a networking event at World Economic Forum for Africa in Durban, he sees great opportunity on the continent. His headline would be: “Africa’s economic growth is resilient, despite the slump in commodity prices.”
As ever, there is some truth to both. The real issue: Africa is not a homogenous market. That is probably the single most boring and repeated truism about the continent. Yet it rarely sticks – and that is understandable.
While Sub-Saharan Africa has been the fastest growing region in the world after Asia Pacific for some years, the real appetite is for a number; population 1.5 billion, likely 2 billion before 2050. Rather than frighten people, those numbers seem to promise the possibility of a new mega-product-market frontier. A lot could go right. A lot could go wrong. The biggest mistake would be homogenizing the continent because of the allure of big numbers.
The significant slump in the price of oil and commodities has exposed the fragility of West African petro-economies, most notably Nigeria. Fortunately, it is forcing an important reappraisal that requires seeing the continent in terms of regions and thematic economic structure, both of which are much more useful indicators.
The result is sobering but encouraging. Market structure is broader than a simplistic
idea of economic diversity. Factors such as the potential for trade and the orientation of exports are critical.