This is a guest post by Allen Grane, research associate for the Council on Foreign Relations Africa Studies program.
Bloomberg Markets’ Michael Cohen and Helen Nyambura-Mwaura have analyzed the current state of Africa’s economies in a very interesting article. They point out that despite the current poor performance of Africa’s larger economies (particularly Nigeria and South Africa), some of the continent’s smaller economies, especially in East Africa, are doing well and will likely continue to do so.
Unlike Nigeria and South Africa, such East African countries as Kenya and Tanzania have avoided a reliance on commodities. Focusing on agriculture and manufacturing, these economies are poised to continue growing at over 5 percent this year. These countries have also continued to work together toward greater regional regulation and cooperation, as well as committing significant investment in transportation links and telecommunications.
The article highlights a home truth about how the continent is treated by international business: Africa is too often painted with a broad brush. They quote economist John Ashbourne, “The narrative of 6 percent growth as far as the eye can see and Africa as a new China is dead, or at least dying, but it was always a bit overblown… At the end of the day Africa is still huge, has a growing population, and massive natural resources. There will always be opportunities.”
Unfortunately, it is unlikely that many businesses will stop viewing Africa in a homogenous light anytime soon. As the authors points out, the current disinterest in Nigeria and South Africa is likely to negatively affect investor and business interest in other African economies still showing promise. Those countries can continue to grow their own economies by practicing sound business practices, limiting corruption, and continuing to build regional economic ties.