Africa Digest : Trends and issues in macro environment Vol. 5

• Main Author: Burger, Johan
• Other Authors: Nanyang Business School
• Format: Newsletter
• Language: English
• Published: 2020
• Subjects: Business; Business::General; Africa; Macro Environment
• Online Access: https://hdl.handle.net/10356/142761
• Institution: Nanyang Technological University

The Africa Digest is a fortnightly e-newsletter scanning the key trends in the macro-environment and industry to promote knowledge and raise understanding of business in Africa. This issue explores 1. Trends in agriculture - Agriculture in Africa is a dominant sector, involving more than 60% of its population. Yet it contributes less than 30% to Africa’s GDP. Low productivity and archaic production methods continue to characterise agriculture in Africa. The average age of a smallholder farmer is 60 years, and youth are leaving the sector for the cities. Africa imports food, to the tune of between US$35 and US$41 billion annually. Governments, realising the precarious position in which agriculture finds itself, have organised initiatives to address the situation. This compilation addresses recent trends and events in this important sector. 2. Infrastructure Trends - Africa’s infrastructure situation remains a major source of concern, despite being identified as a challenge for a considerable period. Infrastructure requirements increase annually, accompanied by growing needs for financing. Factors such as growing populations, increasing disposable income, and urbanisation, impact the African infrastructure situation. Housing, transport (road, rail, ports), energy and water all experience shortfalls. While the continent does face infrastructure challenges, these same challenges paradoxically provide investment opportunities for those willing to accept the risks of investing in Africa. 3. Manufacturing in Africa - Commentators worry that many African countries are pre-maturely de-industrialising, pointing to the decreasing contribution to GDP from their manufacturing sectors. This situation has a negative effect on investment, job creation and technology development. Several African countries have launched various initiatives to boost their manufacturing sectors. 4. Mining Trends and Events - Africa’s mining sector is undergoing transformation, with significant activities in regions that are new to serious mining activity. When new players attract large investments from abroad, some companies and regions that once led the industry will inevitably lose out. A number of investment opportunities up and down the industry value chain present attractive returns. 5. Regional Integration and Politics - Regional integration presents potential solutions to many of Africa’s economic and political problems. Its implementation will significantly improve the level of intra-regional trade, and facilitate the free flow of capital, goods, services and people. However, despite the benefits promised by regional integration, it seems many African countries are unable to rise above squabbles with neighbours to embrace regionalism.