What Leila Fourie's Davos comments reveal about Africa's unpreparedness
At the 2024 Davos World Economic Forum, Johannesburg Stock Exchange (JSE) Group Chief Executive Officer Leila Fourie discussed Africa’s growth potential as part of a talk held by Africa Collective.
Reports show that African markets now offer favourable returns in light of the current outlook for emerging markets across the world. In a matter-of-fact way, Fourie noted that,
“Argentina’s inflation is now over 200%. Turkey’s is much better now that it used to be at 68%. Russia is currently uninvestable. Half of the emerging market investors are disinvesting from China. We saw for the first time in Q4 that China’s inbound flows turned negative,” she said.”
This assessment could be taken as enlightening or quite sobering depending on where you see the continent of Africa headed in the coming decades. However, we can’t detract from the facts that these are facts. Perusing over the latest global inflation figures, provides added context to the quote. More than a few of the large population-high growth potential economies rich in resources and untapped potential simply pose as high-risk investments.
Is Africa the last frontier?
Some of the highs we’re witnessing across regions for inflation such as Latin America and the Caribbean, and parts of Asia and the Middle East are concerning to say the least. While in Africa, Sudan and the Congo (two countries currently experiencing massive civil war) topped inflation rankings with rates of 63 percent and 42 percent towards the end of 2023. Bunch this in with the makeup of our geopolitical chessboard in 2024, and more uncertainties creep in. How realistic is it for businesses and individuals around the world to travel, live, work and invest considerable sums into bulks of the Middle East right now?
War and conflict throughout all of Asia has walled off serious, smart money from oiling the wheels of productivity and growth in so many of the big emerging markets, like Turkey, Russia and a number of former Soviet Bloc countries, Pakistan, certainly Myanmar and Iran. At this point, I would argue that we really have nowhere else to look to but Africa: if we’re talking emerging markets. There really aren’t many places of a similar scale left to venture into.
The East African Federation regional bloc boasts a population of over 300 million, with a GDP of nearly $1 trillion that grew at 5 percent last year. Then there’s Southern Africa, where nations such as Mozambique, Zimbabwe, Zambia, South Africa and Namibia are being rushed with orders and tenders for anything ranging in oil and LNG, coal, cobalt, lithium and wheat. So add another 360 million people and a GDP of roughly $600 billion in 2021 with the SADC region. And yes, Zambia is technically bankrupt, but it also registered 5 percent growth in Q3 of 2023 and at 13 percent, inflation is enroute to returning to single digit territory. Companies listed on the Lusaka Securities Commission have seen their share valuations soar to all-time highs too.
All of the aforementioned are also fast growing and rapidly urbanizing when it comes to the population. Granted, they still have their work cut-out for them, but a lot of us might now consider them relatively stable and secure in terms of the political economy today.
In the land of the blind the one-eyed man is king
As our world fragments into multipolarity, lines are being drawn, but right now, Africa holds the enviable position of neutrality. Even when the continent openly flirts with major Western antagonist and rival Russia, by holding joint military exercises with Moscow, scoring visa and travel concessions with them, and agreeing to open up Russian language schools, not to mention everything surrounding China, nobody really does anything. This speaks to the West in particular, whose response has been decidedly mute and only to flush Africa with more cash.
With all of this said, now is when Opportunity is knocking on Africa’s door the loudest, but is the continent ready to answer it? Progress on the AfCFTA and a review of the role that regional brokers and institutions like the African Union, ECOWAS play in steering Africa’s future must be prioritized.