Akinwumi Adesina
It is not the global economy that has caused the struggles of African countries today, says the African Development Bank’s president, Akinwumi Adesina. These struggles exist because the continent’s economic growth over the last decade has been mostly based on commodity-based exports.
Africa’s economies have been hit hard by current global realities. China’s declining commodity consumption has meant that its imports from Africa fell almost 40% last year. The low oil price – down around 70% since mid-2014 – has left oil-dependent export nations like Angola with considerably less revenue, while the slump in other commodity prices has been felt from Zambia to South Africa to Liberia. Furthermore, a strong US dollar has meant much of the continent’s imports (which are typically higher up the value chain) cost more. The result has placed pressure on current accounts, and weakened local currencies.
“We have all these economic headwinds, but they exist because of the nature of [Africa’s] growth process,” said Adesina during a panel discussion titled ‘Africa’s Next Challenge’ at the 2016 World Economic Forum.
“Our growth process has been commodity-based. But when you export raw commodities you are subject to those low prices, the volatilities of it.”
He highlights four ways that African economies can reduce their exposure to global volatility.
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