With much of the world weighed down by anaemic growth, high debt and painful austerity programmes, Africa has been a bright spot, producing some of the world’s fastest growing economies.
But after riding the wave of the commodities cycle, many African policymakers, particularly in resource-rich nations, face stern tests amid the headwinds of global turbulence. This year’s collapse in oil and metals prices has already hit Africa’s largest economies, including Nigeria and Angola, the continent’s top two crude exports respectively, and South Africa, the continent’s top mining destination. Now dollar strength and concerns over the health of China’s economy have triggered a wider weakening of African currencies.
Indeed, China’s economy is likely to be a major factor in the fortunes of many African nations. China, which overtook the US as Africa’s largest single trade partner in 2009, has been a key destination for Africa’s mineral exports, a major investor and constructor of infrastructure projects as well as a vital source of cheap government financing.