African business, politics and lifestyle
Africa: Not just about commodities
High commodity prices have certainly helped African producers both because it means they get paid more for their exports and it encourages investment to increase production.
But almost all the speakers at the Reuters Africa Investment Summit have agreed that the change in Africa is driven by more than just digging minerals out of the ground, pumping oil or growing crops for foreigners to consume.
“The Africa growth story is much bigger than a pure commodity story,” said J. Kofi Bucknor, Managing Partner of private equity firm Kingdom Zephyr Africa Management.
“It’s about disposable income growing, improving government, improving economic environments that have allowed investments to generate growth. I think that trend will be sustained irrespective of commodity price volatility.”
Like many other investors, Kingdom Zephyr is seeking to benefit from what it sees as Africa’s growing middle class.
For African countries that don’t produce oil, high commodity prices also bring the pain of higher import costs.
Zambian President Rupiah Banda, whose country relies heavily on copper exports for income, pointed out that even when copper prices tumbled in 2008, it didn’t stop growth.
Perhaps some comfort for those looking at opportunities in Africa as surging commodity prices again raise questions over how long they can stay at such levels.