The price of oil rose from $20 a barrel in 1999 to $145 in 2008. Africa, which has plenty of the black gold, saw its economy grow by leaps and bounds during the same period. Six of the ten fastest growing countries in the world between 2000 and 2010 were African. The fastest of them all was oil and diamond rich Angola. So a reasonable question to ask would be how much of this growth is a result of a cyclical rise in global demand for primary commodities. Is talk of this being 'Africa's turn' a red herring?
McKinsey Global Institute estimates that natural resources accounted for only 24 percent of Africa's GDP growth between 2000 and 2008. Countries with significant resource exports did not grow faster than countries without. Perhaps the most persuasive statistic that indicates a secular change in Africa's fortunes is its growth in labor productivity. After declining by 0.5 and 0.2 percentage points in the 1980s and 1990s respectively, the continent's labor productivity grew by 2.7% between 2000 and 2008.
I recently had the pleasure of getting insights into the issues from some of the most thoughtful people in this field. In the words of Kwesi Botchwey, Ghana's former Minister of Finance and keynote speaker for our Africa's Turn? conference at The Fletcher School, "this time there really is reason to believe that Africa's time has come." Joseph Kitamirike, CEO of the Ugandan Securities Exchange, who also spoke at the conference listed three important drivers of this phenomenon -- the winding down of most armed conflicts in the region, democratic elections becoming the norm rather than the exception, and finally, macroeconomic stability that has created the foundation for microeconomic growth. Mr. Kitamirike made the astute observation that the Arab Spring ought to more accurately be called an African Spring as the countries in which democracy has been successfully established are all African nations. This, he opined, is a reflection of a continent-wide social transformation that has accompanied rising economic expectations.
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