Positive medium-term outlook for the continent

Africa is in better shape than ever before, in the view of senior Nedbank economist Nicky Weimar. “Having managed to survive the global economic downturn, it is slowly but surely arriving at a place where it can exploit its positive aspects,” says Weimar who believes that there is a higher capacity for growth on the continent than in previous decades when at times the continent could best be described as “dismal”. “Africa may still not be taking full advantage of its potential but it has turned the corner. Its growth has, for the most part, tracked what has happened in the East and there has been improved trade for Africa. There has definitely been higher investment and therefore a higher capacity for growth.” But, says Weimar, Africa needs to overcome some key challenges before it will really reap the benefits. “Policies in Africa are erratic and this is a big issue. If one can address this then the rest will all follow. The fact that policies can change overnight makes investors nervous and too many have burnt their fingers and therefore rather stay away.” The other major problem is African countries’ dependency on single commodities. “There is not enough diversity in the economies and therefore they are vulnerable to the global market affecting those one or two commodities. Corruption and patronage are problematic for Africa and health remains a major inhibitor as people are just not as productive as they should or could be.” Weimar says despite this the recession did not affect Africa as badly as some of the industrialised countries. “Yes, Africa saw slower growth due to the recession, but in many countries they did not even really see the effect of the global economic meltdown.” She says with a renewed focus on emerging markets Africa is currently in the ideal position to use its vast riches to draw investors and developers. “The medium term outlook is positive and Africa is expected to grow.”