African business, politics and lifestyle
South Africa overshadowed by growth of the rest
South Africa’s place as the sole economic giant in Africa is set to decline in coming decades as its growth is outstripped by countries to the north that have emerged as some of the fastest growing in the world.
As part of a package of Reuters reports on Frontier Markets, my colleague Ed Cropley takes a look at the importance for South Africa’s future of positioning itself as a springboard to the rest of the continent.
Although South Africa has been one of the best long term investments in the world over the past century, the next century looks less promising.
South Africa accounted for nearly 40 percent of all economic output in the sub-Saharan region in 2000, according to International Monetary Fund figures.
That share will drop to 28 percent this year, in part because South Africa’s economy was caught in the global recession. It will shrink further as countries such as Nigeria, Ghana and Uganda notch up growth of 7 percent or more compared to the 2.3 percent expansion forecast for South Africa in 2010.
Some South African companies are leaping on the opportunities – MTN, Standard Bank and Shoprite are obvious examples – but others may be slower to catch on.
“South African companies need to wake up. A lot of opportunities are already being stolen from under our noses, and not just by the Chinese — it’s the Indians, the Brazilians, the Russians, the Canadians, Australians,” said Duncan Bonnett, of consultancy Whitehouse and Associates.
For more on the big changes – and risks – in the new Africa, there are interesting reads here on Ghana’s prospects as it becomes an oil producer “Ghana bids to break Africa’s oil curse” and the cautionary tale for investors in Nigerian banks “Nigeria: a lottery you might just win”.