Can Africa keep its economic winning streak alive?
WASHINGTON – They export BMWs and birdseed and plenty in between. Their middle class is growing fast enough to draw the likes of Marriott and Wal-Mart. China, Europe, Japan and the United States are vying to build roads and power plants there.
No longer are the nations of sub-Saharan Africa, long a symbol of war, famine and corruption, an economic basket case. Six of the world’s fastest-growing economies are there. Higher oil prices, richer consumers and sounder governments have raised so much interest in Africa’s economic promise that it’s being showcased this week at the first U.S.-Africa Leaders Summit in Washington.
The question is: Can all this endure?
Africa has stood on the verge of prosperity before only to see its opportunities fizzle. Yet never before has it stood to benefit as it does now.
“Africa presents enormous opportunities,” says Paul Sullivan, director of international business development at Acrow Bridge of Parsippany, New Jersey, which has put up hundreds of prefabricated steel bridges across Africa.
As African leaders gather to mark a decade of economic gains, they appear intent on sustaining the growth and ensuring that the benefits are spread broadly and not siphoned away by corrupt officials and foreign companies.
In the decades after many of the countries regained their independence in the 1960s, their natural resources – Nigerian oil, Liberian diamonds, Congolese copper and cobalt – failed to support durable growth. They sometimes proved a curse: Proceeds would vanish into Swiss bank accounts of corrupt leaders and give armed factions something to fight over.
Analysts note hopefully that the current resurgence is built on foundations sturdier than the ups and downs of commodity prices. Many African nations have become more democratic, making it easier for entrepreneurs to do business, and have boosted investment in education and infrastructure. A decade of solid growth has created a middle class with more spending power – 350 million strong in 2010 by the African Development Bank’s count, up from 220 million in 2000.
Armed conflicts are down despite headlines about the terrorist groups Boko Haram in Nigeria and al-Shabab in Somalia.
The improved environment has benefited even countries without bounteous natural resources. In resource-poor Rwanda, for example, economic growth rose from an average 1.7 percent from 1990 to 2000 to 7.7 percent the next decade.
The consultancy Ernst & Young ranks Africa as the world’s second-most-attractive market after North America. Cumulative foreign investment in sub-Saharan Africa has catapulted from $33.5 billion in 2000 to $246.4 billion in 2012, according to United Nations numbers crunched by the Brookings Institution.