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Feature
POWERLIST 2008
Africa’s
Century
AFRICAN ECONOMIES ARE RESURGENT, FOR THE
PAST FIVE YEARS RECORDING QUICKER AND
STEADIER GROWTH THAN THEIR COUNTERPARTS
IN THE DEVELOPED WORLD. BUT IS THIS GROWTH
SUSTAINABLE IN THE FACE OF GLOBAL SLOWDOWN?
STEPHEN WILLIAMS EXAMINES THE EVIDENCE
S
ix months to a year ago, it all seemed Simultaneously, rapid improvements in grew by 50%, Kenya’s NSE 20 was up 42%, and
so certain. Africa’s economic growth, terms of governance, the bearing down on Namibia’s NSX local recorded a 27% upswing.
riding on a commodities boom, was corruption and the opening of economies From South Africa’s blue chips, such
at last beginning to reverse decades of post- to foreign direct investment all contributed as Sasol, SABMiller, MTN and Standard
colonial decline – from the economic collapse to the continent’s economic growth. Bank, to continental giants such as Nigerian
of 1975-1985 brought on by the oil price-rise African economies enjoyed something of a Breweries, Sonatel (the Senegalese telecom
shock, to the stagnation suffered in the ‘lost renaissance. group), Produce Buying Co (Ghana), Pretoria
decade’ (1985 to 1995) when the World Bank Between 1997 and 2007, average GDP Portland (Zimbabwe), Sechaba Breweries
and International Monetary Fund demanded growth across Africa rose from 3.5% to nearer (Botswana), Chilanga Cement (Zambia), East
hugely damaging ‘structural adjustment poli- 6%, and infl ation fell from 10.2% to 6.6%. In African Breweries (Kenya), New Mauritius
cies’ as conditionalities for overseas develop- 2005, Angola, Equatorial Guinea, Liberia, Hotels, Tanzania Breweries and DFCU (the
ment aid. DR Congo, Mozambique, Sierra Leone and Ugandan fi nancial group), canny investors
Growth had been kick-started by a surge of Nigeria were among the 50 countries with the realised they could generate huge returns.
investment following the end of the Cold War highest GDP growth in the world. But as welcome as these developments
and the defeat of apartheid in the mid-1990s. And Africa’s stock markets boomed, were, it was generally accepted that Africa
In the following decade, Africa recorded an even beyond South Africa’s JSE. The Nigeria needed to double GDP growth if the UN’s
average annual growth rate of more than 5%, Stock Exchange, for example, grew by 315% Millennium Development Goals were to be
while reforms served to reduce infl ation, wipe between 2000 and 2006 and, in 2006 alone, by met by 2015. These ambitious sets of targets
out budget defi cits, stabilise exchange rates 38%. In the same year, Botswana’s DCI market were designed to deal a deathblow to poverty
and help cut foreign debt repayments. posted a 74% growth, Mauritius’ SEMIDEX in the developing world. One of the principal
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