Last month I participated in a VOA program to talk about Africa’s economic prospects in 2016. I discovered two things from the program: first, my French continues to deteriorate, and, second, I have strong and positive views on economic and commercial activities on the Continent.
In fact, when my fellow guest, a successful Guinean businessman, insisted that Africa’s future was bright, I disagreed and said the future was now; that Africa’s moment had already arrived. Yes, the oil and gas producing countries have been rocked by falling energy prices, but this bust is having a positive effect on the majority of African states who import oil and gas. For instance, Ethiopia continues to have growth rates of 6%, and if Nigeria’s rate falls to about 3% or less, it is yet another indication in favor of diversifying the economy. The Nigerian Board of Statistics says that the petroleum industry makes up only 10% of the economy, but we know that the oil and gas industry has outsized effects on other sectors.
South Africa is the African country likely to benefit the most as energy prices remain low. As the price of gold stabilizes, cheap oil means lower costs in nearly all sectors of the economy. Still, the upcoming chicken trade row with the United States is worrisome (More on that soon).
But as much as I think Nigeria needs to diversify its economy to balance out the energy sector, those African countries that are net oil importers, they must use this windfall to invest in alternative energy sources, like solar, wind, and hydro. Expanding and improving infrastructure — roads, ports, telecommunications — would also be a good investment.
Africa’s time is now, regardless of herky-jerky energy prices and the desperate need for all Sub-Saharan African countries to diversify their economies.