Friday, 19 March 2010

The new Asia

Things really are going splendidly in the world, you know. Now it turns out that Africa is the new Asia:
China and India get all the headlines for their economic prowess, but there's another global growth story that is easily overlooked: Africa. In 2007 and 2008, southern Africa, the Great Lakes region of Kenya, Tanzania, and Uganda, and even the drought-stricken Horn of Africa had GDP growth rates on par with Asia's two powerhouses. Last year, in the depths of global recession, the continent clocked almost 2 percent growth, roughly equal to the rates in the Middle East, and outperforming everywhere else but India and China. This year and in 2011, Africa will grow by 4.8 percent—the highest rate of growth outside Asia, and higher than even the oft-buzzed-about economies of Brazil, Russia, Mexico, and Eastern Europe, according to newly revised IMF estimates. In fact, on a per capita basis, Africans are already richer than Indians, and a dozen African states have higher gross national income per capita than China.

I had no idea that Africans are per capita richer than Indians.

H/t Thomas PM Barnett.


Recusant said...

Not surprising at all Gaw. In these grim economic times my consultancy has been 100% - Yes, that's right: 100% - dependent on African business for the last nine months. We are busy in Mozambique, Zambia, Malawi, Tanzania and even the dreaded DRC.

The thing is, there has always been money to be made in Africa and at greater margins than elsewhere, but most Western bankers and advisors have been either too scared or the scale has been too small for them to be interested.

As for Africa, the potential has always been huge, but the lack of the rule of law or enforceable property rights has hampered development and made subsistence living the rational thing to do. The change now is that governance has, relatively, improved and the rest of the world has become concerned about the security of its supplies of commodities and, in particular, food. Now every private equity and hedge fund wallah and his dog is setting up African agri funds to develop outgrower businesses and distribution infrastructure.

And it's good news. For Africans.

Gaw said...

Fascinating stuff, Recu, and a much-underreported story (just like most good news).

A mate of mine who's a partner at a City law firm is off to Sierra Leone to advise the govt on PE investment as part of a sabbatical. I'm quite envious and kick myself that I probably won't be able to pop over to visit. Sub-Saharan Africa's somewhere I'd love to get to know more, particularly as I wrote a thesis once on agrarian reform.

What sort of consultancy do you do, if you don't mind my asking?

Recusant said...

I'm an executive search consultant. Which is a pompous name for a headhunter. But we actually do 'search' for heads, rather than just crank the handle on some database. In addition, a substantial part of our income comes from providing board assessments; business assessments and investment advisory services. Money, in the end, can be got from any old fool; the right people to get things done are a bit harder to come by. You try persuading a successful and well remunerated Brazilian that three years in Maputo will turbocharge his career and give him a lot more fun into the bargain. And it will.

Gaw said...

Sounds challenging but fascinating stuff. Don't suppose you could organise a job-swap between a witch doctor and Elberry?

Hey Skipper said...

I'll be Africa doesn't look so good after eliminating resource extraction from the numbers.