Africa News blog
African business, politics and lifestyle
from MacroScope:
Building BRICs in Africa
Some eye-catching numbers from Standard Bank out today on the influence of BRICs countries -- Brazil, Russia, India and China -- on Africa.
First off, the bank says the global recession and its recovery have been nourishing these so-called South-South ties. But it is all now ready to take off. The bank estimates:
-- By 2015, BRIC-Africa trade will have incresed threefold, to $530 billion from $150 billion this year.
-- BRICs share of Africa's total trade will increase from one-fifth today to one-third in the next five years.
-- BRICS foreign direct investment stock in Africa will swell to more than $150 billion from around $60 billion today.
Standard Bank bases these assertions partly on estimates for BRICs growth over the next five years -- eg, domestic output, global output and a doubling of BRICs trade with the world in general. But it also sees Africa growing rapidly -- for example, a per capita real annual growth rate of 5.7 percent between now and 2015, and a doubling of private consumption in Africa's 10 largest economies. And it adds:
Crucially, a host of global-minded corporates is emerging from the BRICs. In 2010 231 (11.5 percent of the total) companies listed in the Forbes Global 2000 originated in the BRICs, up from only 83 companies (4 percent) in 2005. Recent trends are a harbinger of deeper potential.
Africa optimism rising
When some of the most influential figures in emerging markets finance spoke to a group of Reuters editors, they were asked about top picks for growth beyond the so-called BRIC countries of Brazil, Russia, India and China.
One continent came up again and again – Africa – and one country in particular – Nigeria. Goldman Sachs global head of economic research, Jim O’Neill, highlighted the improvement in the growth-environment index of Africa’s giant over the past decade.
“If it were to show the same increase in its growth-environment score over the next decade, many investors will look back and say why the hell didn’t I invest in Nigeria,” said O’Neill, who coined the term BRICs.
You can read the full story here.
Recent interest in Africa has been buoyed by the World Cup while a series of reports have highlighted its prospects beyond the global crisis. There was a recent McKinsey study and Fitch has come out with an improved outlook for sub-Saharan Africa.
There is certainly plenty of optimism outside the continent. Will it be fully realised this time around?
South Africa and Nigeria rank around 30 out of 158 on world GDP scale with immense probabilities.
Raw materials and crime for Africa with a fear of ‘white’ dominance reappearing creates a ‘beware’ signal of a loose-loose game to both sides.
Africa needs para-mount assistance to rid itself from the dark era of dictators and hunting aggression.
17 000 murders per annum makes this otherwise beautiful
South Africa a bit scary.
Raw materials and tourism has potential from those with impeccable credentials but wait till after next election for nationalization of mines could be implemented and land grab like Zimbabwe if the president of the ANC youth league comes into power.
from MacroScope:
Why the BRICS like Africa
There is little doubt that the BRICs -- Brazil, Russia, India and China -- have become big players in Africa. According to Standard Bank of South Africa, BRIC trade with the continent has snowballed from just $16 billion in 2000 to $157 billion last year. That is a 33 percent compounded annual growth rate.
What is behind this? At one level, the BRICs, as they grow, are clearly recognising commercial and strategic opportunities in Africa. But Standard Bank reckons other, more individual, drivers are also at play.
In a new report, the bank looks at what each of the individual BRIC countries is trying to do. To whit:
-- Brazil's immediate intererest in Africa is securing access to natural resources, particularly oil. But is also motivated by a desire to create a new "Southern Axis" with itself at the forefront.
-- Russia is also interested in Africa's natural resources. But it faces a problem because of the sullied reputation of the Soviet Union during the Cold War. So Moscow has also embarked on a rebranding programme within the continent by ramping up its aid programmes.
-- India is attracted to Africa in part because of long historic ties. Commercial engagement, however, is also motivated by a need to guarantee the natural resources it needs for its own growth. Furthermore Africa is seen politically as a key ally in the pursuit of a competitive advantage over its Asian competitor China.
-- For China, Africa provides a long-term partner in its ongoing bid to gain global economic ascendancy, providing it with the resources, markets, geopolitical support, and, eventually, food and social security in the form of a growing and engaging diaspora.
