Africa in 2010

by Margot Bokanga

One important question the business and development sectors and policymakers in Africa and the international community may be asking is “How will Africa perform this year and this decade?” Despite last year’s global recession, Africa remained the most profitable emerging market to invest in, and this year it offers strong business opportunities to many investors. Looking through the Top 9 Business Stories of 2009 that I posted last week, I found three trends.

First, in 2009 we saw an increase in South-South trade and investment, which has enabled certain countries in Africa to reap the benefits of their comparative advantage with other Southern partners. This trend is anticipated to continue due to low labor cost, high investment return, and availability of resources on the African continent.

Second, as noted in the World Bank Report on Infrastructure in Africa, basic infrastructure services are at the root of the recent economic growth on the continent. The challenge of this decade will be to continue investing and maintaining existing and future infrastructural systems that have the potential to lift the continent out of poverty.

Third, the momentum created by the Copenhagen climate change negotiations demonstrated Africa’s political leverage in the international arena. African representatives were able to advance a common agenda, achieve political gains and acquire some economic commitments. Although those commitments were not as large as hoped for, they will enable many governments to begin meeting the challenges caused by climate change.

For all the gains and achievements accomplished last year, a lot remains to be done to secure the current wave of development on the continent. Africa in 2010 needs better financial management and prioritization in investment opportunities, particularly if African markets continue to be affected by the financial crisis.  Furthermore, natural resources such as oil and minerals are not the only source of energy or drivers of development on the continent. Communication and information technology, regional integration, improved trade relations, and initiatives seeking to integrate small and medium businesses into the global supply chain were major drivers of African economic growth in 2009 and will continue to be in 2010.