help with growing fiscal crises caused in part
by unsustainable debt levels. Angola recently
raised $1.5bn in international markets and
analysts predict that debt will make up nearly
40% of gross domestic product by the end of
next year.
Sovereign bond sales in Africa doubled between
2012 and last year to a record $11bn. Fitch
says that by the end of next year, sub-Saharan
Africa’s sovereign external debt burden is likely
to have increased 38% from 2013.
Continental growth rates are also falling from
highs of more than 5% for a decade to below
4% this year.
The IMF predicts that this may inch above 4%
next year, but will remain off previous highs for
some time.
This is a testing time for Africa.
With the tide going out, long-term structural
problems and embedded dysfunction that exist
in almost every African economy are being
exposed.
22
FARMERS GAZETTE
November 2015
Security issues in some countries present specific
challenges, and third-term bids by presidents
presage possible political destabilisation next
year and in 2017.
In the patchwork of countries that make up
Africa, there are also positive stories.
Growth rates remain strong in Kenya, Ethiopia
and Mozambique, for example. Nigeria is
decisively tackling some of its deep-seated
challenges, such as corruption, while Tanzania’s
new leadership is cutting back wasteful state
expenditure.
This challenging environment is an opportunity
for real structural change. However, this
requires strong leadership — not heads of state
driven by self-interest and political expedience.
It is not up to China to rescue Africa; it is the
job of Africans themselves. But it is going to be
a rocky ride. Time to hold on to your hats.
•
Games is CEO of business advisory
Africa @ Work