Tuesday, 11 August 2015

Many challenges ahead

With a cluster of key economic meetings stretched out in the last quarter of the year, Africa’s economic policymakers are grappling with two main challenges: rising youth unemployment and the falling prices of export commodities. The first two meetings – the United Nations summit on Sustainable Development Goals in New York in mid-September and the World Bank and International Monetary Fund annual meetings in October – will address those topics head on. The third meeting, the Climate Change conference in Paris in December, will address the issues more obliquely in terms of the damage that desertification and extreme weather are doing to Africa.

For jobs and export revenues to become such pressing concerns for Africa’s governments, especially those in charge of the bigger economies such as Nigeria, South Africa, Egypt and Kenya, is not to ignore the past 15 years of impressive growth on the continent but to point to changing regional and international dynamics. The tempo and direction of China’s economy is changing and its appetite for raw materials diminishing. In the longer term China will want to buy more processed goods from Africa. How far African economies can take advantage of those trends will depend on both on technical skills and availability of cheap and reliable power and transport links. But for state budgets and jobseekers the lessons are clear: the commodity boom is over, probably for another decade.

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