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While Africa has the people and resources to become a global economic powerhouse, it needs to prioritise policy consistency and the rule of law if its potential is to be realised, says a top economist.
Standard Bank’s chief economist and head of research, Goolam Ballim, told the One Young World Summit in Cape Town this week that Africa was now relevant to the global economy amid political ructions, geopolitical tensions and trade fragmentation.
“In today’s world of re-shoring, on-shoring, or ally-shoring, or put differently, when nations are looking for paths to establish trade and supply chains on trust and predictability, Africa is slightly more relevant.
“In terms of commodities, Africa has abundant cobalt, platinum, lithium and a variety of other critical and rare earth minerals that are going to be essential for this century’s energy and advanced manufacturing.”
Amid questions over the debt sustainability of the US, the implications of China’s ageing population and the slowdown of development capital in Europe, analysts are assessing Africa’s young population as a key strategic advantage in the long term for growth.
According to the UN’s world population prospects report, nearly 60% of global youths are concentrated in just 10 countries: Bangladesh, Ethiopia, India, Nigeria, Pakistan, Brazil, China, Indonesia, Mexico and the US.
Ballim said Africa needed to put in place the basic building blocks for growing economies and prosperous societies, such as infrastructure for basic services and the rule of law, with policy consistency as the backbone. “In terms of food security, 60% of the world’s still-available arable land is on the continent. In so many respects, Africa has an enormous amount of relevance.
“That relevance can remain theoretical. Theoretical in the sense that, for all of these things, this potential to translate into prosperity and meaning, Africa is devoid of the substructures that are necessary to monetise, to translate this potential into reality. This potential needs electricity. It needs skills. It needs technology. Regulation. The rule of law. Policymaking to make this all into a true transformation.”
Also at the summit, the chair of Anglo American South Africa, Nolitha Fakude, said Africa faced various challenges in its economic development strategy and ambition, but opportunities still abounded.
Fakude said geopolitics needed to be considered. “In some countries, one particular mineral is for economic development, when you say technology and digitisation. Others look at it for decarbonisation purposes because they want to make sure that we transition to a low-carbon economy by using some of these metals that are mined.”
She said as geopolitical tensions intensified around the world, Africa’s role in the global political community would become more pronounced as the region had the resources that feed the defence industry.
Rohitesh Dhawan, president and CEO of the International Council on Mining and Metals, said South Africa had been growing as an economy because the mining sector, supported by banks, legal companies and manufacturers, needed multi-pronged support to create jobs that secured people’s dignity and rights.
“One thing that’s very hard for companies in general, but for my industry to say, is that I really feel we need help. We don’t have the answers in the mining industry for how to build an industry that can protect rights, protect the planet and grow at the pace it’s going to need. We need help. We need your help.”
He said mining companies know the value of every commodity but understand that the most precious thing they have is people.
Business Times
