The moment commodity prices fell
Still, the sudden change in direction the moment
commodity prices fell demonstrates the continued fragility
of many of Africa’s economies – and the wariness of jumpy
investors when confronted by changing tides in frontier
markets.
Governance still has some ways to go and has
taken backward steps of late in places such as South Africa,
Egypt, Zambia, Ethiopia and DRC. Stronger institutions and
legal structures guaranteed to last through more than one
administration would go a long way to calming many.
Harder times have a silver lining.
They have a way of
tempering hyperbole and chasing out those looking to make
a quick buck. While this can lead to some temporary pain,
the investors who stay the course are more likely to be of the
type whose interests are aligned with the region’s sustainable
development needs. Long-term, patient capital may be less
fashy, but it is required to build roads, power grids
and factories.
If governments can provide stability, the fight of hot money
may leave African economies with a base of investors who are
more hardy and less prone to chasing the cycles of volatility.
EU Forecast
euf:ba.18.l:7/nws-01