The Slave Ethos and the African Economy

DAKAR – The slump in prices for Africa’s natural resources, which led to chronic deficits in the past, has been reversed. Consumption, fueled by huge Asian demand for African commodities, is on the rise across the continent. For much of Africa, this turn of events should mark a decisive break with endemic poverty. But, unless African leaders change their ways, it will not.

Africa is estimated to hold more than 10% of global oil reserves and one-third of reserves of cobalt and base metals. South Africa alone possesses 40% of the world’s gold, which has been skyrocketing in value since the onset of the global financial crisis. Africa’s agricultural potential has barely been touched.

Long-term global demand for Africa’s commodities, land, and manpower is unlikely to diminish. China, which has increased trade with Africa five-fold since 2003, has played a leading role in this turnaround, which has encouraged investors from elsewhere, including Europe and the United States, to rethink their approach to investing in Africa. This has translated into a steady flow of multibillion-dollar investments in the region. As a result, the IMF forecasts 4.7% GDP growth in sub-Saharan Africa this year, rising to nearly 6% in 2011.

Unfortunately, however, while the direction of Africa’s trade may be changing, its composition – raw-material exports and manufactured imports – is not.