To describe the mood of the global economy these days is gloomy. The pessimism is closely tied to the loss of faith in free markets and free trade, the two forces that propelled the world economy for the past seven decades. The United States, long the staunchest supporter of these ideas, has moved into full-scale mercantilist mode. Britain, the original free trade superpower, is pulling out of the European Union, its largest free-trade relationship. China is striving to become less reliant on foreign firms and global supply chains. Everywhere the trend seems the same. Except in Africa.
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Last month, unnoticed by much of the media, Africa’s leaders announced the creation of a continent-wide free-trade area that will potentially bring together 1.3 billion people in a $3.4 trillion economic zone. The success of this project hinges on whether nations actually do reduce tariffs and other trade barriers, but if they do, trade could rise by as much as 50 percent in the next few decades, according to the International Monetary Fund. As the IMF put it, “This could be an economic game changer for the continent.”
Africa has six of the world’s 10 fastest-growing economies. By 2050, a new African middle and upper class of 250 million people could stimulate a five-fold rise in demand for goods and services. The World Bank found that a third of all business-regulation reforms from 2017-2018 took place in sub-saharan Africa, and the continent boasted five of the 10 most-improved economies in the institution’s annual Doing Business Index. More than 400 African companies already take in at least $1 billion in annual revenue. These data points come from a recent Brookings Institution op-ed, “The high growth promise of an integrated Africa,” by Landry Signé and Ameenah Gurib-fakim.
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One country that has bet big on Africa is China. In 2000, trade between China and the entire African continent was $10 billion. Today it’s $200 billion, making China its largest trading partner. Beijing has invested heavily in
aid and loans for the region. President Xi Jinping hosted an African summit in Beijing last year and announced that China planned to spend $60 billion in credit, investment and development projects for the continent for the next three years.
China remains Africa’s largest trading partner for 9 consecutive years ..
China has remained Africa’s largest trading partner for 9 consecutive years as major cooperation
Of course, there are many caveats to the rosy picture of Africa. It’s easier to announce the intention to reduce trade barriers than to actually enact such laws. Africa continues to face massive problems in the form of corruption and mismanagement, not to mention conflict. Some of the continent’s promising growth statistics reflect the simple fact that Africa is rich in natural resources, and a growing world economy has created high demand for these products…
