In this week’s news, African leaders gather in Ethiopia for a high-level security summit, and investors in Africa cautioned not to leave too soon.
The Economist Cautions Not To Pull Out of Africa Too Soon
It’s true there are plenty of concerns among the millions of investors who have put their money and hopes in the economies of African countries. These concerns are justified, and every savvy investor should know when to pull out and when to hold back when things seem shaky.
For these investors; miners and private-equity firms that have “sank” billions into the African economy, the recent slump in commodity prices is something that is troubling, The Economist tells us.
Commodity prices in the continent have been going up and down for decades, like a bungee-jumper at Victoria, the magazine states. Citing World Bank statistics, it predicts a possible slowdown in growth for many African economies as a result of the plunge.
“Growth across the region will slow to about 3% this year, predicts the World Bank, down from 7-8% a decade ago. That is barely ahead of population growth of 2.7%. Nigeria and Angola, two big oil exporters, will probably need bail-outs from the IMF within a year.”
Yet, the magazine cautions not to pull out of the continent too soon. For several reasons:
What it calls “commodity busts,” don’t last too long, and they don’t hurt everyone, the magazine states. Partly because 17 countries that account for a third of the region’s population have energy and other resources to counter the commodity slump.
Even more interesting, it cites peace and democracy reigning throughout the continent as a reason for investors not to despair.
“Africa is also far more democratic than it was. In the 1960s, 1970s and 1980s, only one sub-Saharan government was peacefully voted out of office. Now nearly all face regular elections, which are harder to rig thanks to social media. Voters have real choices—one reason why policies have improved.”
Despite some notable setbacks, such as the desire by some leaders to prolong their stay in power, the magazine sounds an optimistic note about recent trends in the continent.
“But massive missteps like these are now the exception rather than the rule. Most countries in Africa are following sound economic policies, controlling government deficits and keeping inflation in check.”
African Leaders Gather for High Level Security Forum in Ethiopia
As global security becomes the number one issue on the minds of leaders around the world, African leaders don’t seem to be relenting to deal with the many security challenges which face their own nations.
The fifth Tana High-Level Security Forum in Africa held on April 16 to 17, on the banks of Lake Tana at Bahir Dar in Ethiopia against the backdrop of increasing concerns about the security challenges which face the continent.
The Sudan Tribune reports that more than 200 participants, including heads of states and governments, leaders of NGOs, students, academics, were expected at this year’s event.
A statement from the forum website states that “The Tana Forum promotes African-led solutions by holding discussions on the strategic and pro-active management of African peace and security issues driven by the interest to contribute to stronger ownership of these issues.”