African Economies ’Must Go Global’

Wednesday, May 4, 2011

By Justine Gerardy (AFP)

CAPE TOWN – Africa must accelerate links to global markets and improve competitiveness to sustain the strong growth expected this year, experts at the World Economic Forum on Africa said on Wednesday.

African economies weathered the global economic storm in 2008 and have since resumed strong growth — a positive showing which paradoxically highlighted Africa’s weak presence in global financial markets, said Jennifer Blake, head of WEF’s competitiveness centre.

“It is also a reflection of the fact that African economies are not sufficiently integrated into global markets,” Blake said at the launch of the third Africa Competitiveness Report.

“While this sort of sheltered them over the shorter term, this will be a hindrance for economic development going into the future.”

The International Monetary Fund forecasts that sub-Saharan Africa will grow by about 5.5 percent this year, one of the strongest showings in the world, but cautions that the region could suffer if the global economy falters again.

Competitiveness “is going to make the difference whether Africa’s growth is sustained or not”, said World Bank chief economist for Africa, Shantayanan Devarajan.

“Competitiveness is the key to our employment strategy as well.”

By several measures, African economies are doing remarkably well.

Consultancy Ernst & Young said on Tuesday that foreign investment in Africa grew by 87 percent in the past decade, as the continent has offered strong growth rates and high returns.

Foreign direct investment jumped from 338 new projects on the continent in 2003 to 633 in 2010, it said.

Source: AFP (link opens in a new window)