Wobbly governments, imploding companies and crashing commodities mark out a coda to the past decade of high growth and political self-confidence. Economists argue about how much rising national incomes could be attributed to better macro-economic management and the role of Asia’s gargantuan appetite for oil, metals and soft commodities. Although deficits, inflation and debt all fell as economies grew and currencies strengthened, some old ailments are returning. Alarm bells are ringing louder as so many countries issue sovereign bonds just as interest rates rise again.
A new chapter has opened with China's
economic rebalancing and reduced
demand for Africa's resources. A strengthening United States' economy
and some consolidation in Europe are prompting renewed interest in
African economies, at least outside the mining and oil industries.
Of necessity, tough economic changes are on the agenda: governments
will have to boost tax collection and cut illicit financial outflows.
And more ambitious structural changes will need finance for local
production: to process local crops and more manufacturing, as well as
the region’s fast- growing service sector. Money and technology from
both China and the West could foster these changes but these will
require some hard bargaining by African governments. So far, only a few
governments seem set to navigate the choppier economic waters.