Political Tensions Could Slow Africa’s Growth

Political dimensions could affect Africa’s growth if the region does not pay much attention into this area.  In the past Africa has been plagued by coups and collapsing governments due to corruption.  Abel Sithole, futurist and financial sector expert from Stellenbosch University’s said drawing from past examples it was easy to see how bad politics could hamper growth prospects.

He made these remarks as Africa celebrated 51 years after the formation of the Organization of African Unity now known as Africa Union.  Sithole said countries like Nigeria, South Sudan among others gave pointers on threats to the regional growth going forward.  He stated, “Looking at Egypt for example things have not stabilized since the Arab Spring, there are still challenges that the country is experiencing compared to other countries.”

A number of African countries have been experiencing differing levels of instability that has adverse effects on investor perceptions.  Some of the countries that have been experiencing political and social instability include Central Africa Republic, Kenya, Somalia, Nigeria and South Sudan.

Sithole said as Africa was celebrating Africa Day it was difficult to have a global view of Africa as a whole because as you Africa comprised of 54 countries with different dynamics.  He added, “China still needs to develop significantly going forward and that means the need for resources from the continent will continue into the future.”   Sithole then stated, “There are resources that China will always need for instance oil making it more convenient for energy focused countries to keep experiencing the steady demand.”

However, Sithole warned that slowing of growth in countries trading with Africa could affect the continent’s future prospects.  He went on to warn, “Stagnating of China and other countries trading with Africa due to the continuation of effects of global recession.” The continent has benefited from the resources boom and that analysts believe likely to continue into the future.  According to the recently published Multi-Asset report of HSBC, China is a key destination for sub-Saharan Africa’s oil exports, which have grown at an annual rate of 35 per cent since 1995.

Source: CNBC Africa