Something has certainly changed in the intervening years in Africa, and in its relations with the outside world, even if excessive pessimism or optimism is unwarranted. What accounts for these changes, and what does this mean for African politics and economic development into the future?
The lead story of a recent Eco-nomist magazine was entitled “Africa Rising”. This is in sharp contrast to a previous cover a little over a decade ago which described the continent as “hopeless”. Something has certainly changed in the intervening years in Africa, and in its relations with the outside world, even if excessive pessimism or optimism is unwarranted. According to the International Monetary Fund, Africa hosted six of the top ten fastest growing economies in the world in the last decade. The continent also has the fastest growing mobile phone penetration rate in the world, and wide scale armed conflict has substantially reduced, as has poverty, according to some studies, although the statistics are disputed. What accounts for these changes, and what does this mean for African politics and economic development into the future?
High levels of economic growth across much of Africa have been largely driven by demand for the continent’s natural resources and raw materials. About three quarters of what the continent exports is unprocessed primary commodities, and prices for many of these again hit record highs in 2011; the global economic crisis notwithstanding. There are a number of factors driving global demand for primary commodities operating at different levels. At a broad scale the globalized economy exerts ever increasing demand for finite natural resources as it grows, creating problems of scarcity and putting pressure on prices. By some estimates the global economy was growing at 4% during 2011, despite economic problems in the euro zone and elsewhere. The main drivers of global growth have been the so-called BRIC economies (Brazil, Russia, India and China). The rate and scale of Chinese economic expansion has been particularly notable, and in recent years that country has accounted for 40% of growth in global oil demand, by itself. Despite being admonished for not consuming enough by Western powers, there are now twenty times more cars on the roads in China than there were ten years ago. The need to find natural resources to fuel its booming economy is one of the reasons the Chinese govern-ment has a so-called “going out” policy; to encourage its companies to invest overseas. However, this is different from the “Washington Consensus” model of globalization as many of the biggest Chinese companies investing in Africa, and elsewhere, are state, or partially state-owned.