2010-05-26 Rising Africa puts South Africa on the spot

[Micke]

Rising Africa puts South Africa on the spot

(Reuters) - Even by the extended outlook of emerging market investors, a century is a very long time. By that measurement, though, South Africa, the continent's biggest economy, has been a staggering success.

A punter who took a slice of the then British colony 100 years ago would have enjoyed annual returns of 7.6 percent, easily surpassing the United States, Germany and Japan and behind only Sweden and Australia, according to Credit Suisse research.

The 21st century looks less enticing. Stagnating population growth and dwindling deposits of the gold and other minerals that fueled such dramatic expansion are likely to crimp South Africa's growth.

The rest of the region is likely to fare much better.

"Frontier Africa", loosely defined as anywhere south of the Sahara excluding South Africa, remains a mish-mash of impoverished small and medium-sized states with shoddy infrastructure and erratic governments.

But beneath its soil and seas lie huge deposits of oil, gas and other minerals coveted in particular by Asia's booming economies.

Over the past decade, that demand has spurred growth of 5 percent a year, and with the continued benefits of debt relief, market liberalization and the spread of new technologies such as mobile phones, the trend looks set to continue.

By the middle of this century, South Africa is unlikely to be a sole economic giant among dwarves. To stay competitive it needs to profit from the new "Scramble for Africa" by positioning itself as a springboard into the rest of the continent, analysts say.

"We are playing on a big stage now," said Paul Runge, Johannesburg-based head of Africa Project Access, a consultancy helping South African firms invest in other sub-Saharan African countries.

"Africa is becoming an increasingly international arena. If we as South Africans are going to play on this stage, we had better get very worldly very quickly."

HEADING SOUTH?

Nearly all the indicators point to a long-term decline in South Africa's status and clout relative to the rest of Africa.

In 2000, the "Rainbow Nation" that had emerged from decades of white-minority rule and isolation accounted for nearly 40 percent of all economic output in the sub-Saharan region, according to International Monetary Fund figures.

That share will drop to 28 percent this year, in part because South Africa's economy was caught in the global recession, and will shrink further as countries such as Nigeria, Ghana and Uganda notch up growth of 7 percent or more compared to the 2.3 percent expansion forecast for South Africa in 2010.

With a heavy HIV/AIDS burden and high levels of urbanization by African standards, its population will grow by only 7 million people to 57 million by 2050, according to the United Nations Population Fund.

By contrast, Nigeria and Ethiopia's populations will double to nearly 300 million people and 175 million people respectively, while Democratic Republic of Congo, currently home to 68 million people, will boast 150 million.

If African policy makers play their cards right, those booming populations should help drive economic growth by creating vast pools of young labor in economies increasingly geared toward manufacturing for export -- similar to China 30 years ago.

LOOKING NORTH, SLOWLY

It is gold mining that most starkly illustrates South Africa's waning fortunes.

Annual production of the precious metal in 1990, the year Nelson Mandela was released after nearly three decades in an apartheid jail, stood at 600 tonnes.

By 2009, it had fallen to just 160 tonnes, making the country the world's fourth biggest gold producer behind the United States, China and Australia.

Such statistics are not lost on policy makers and politicians in Pretoria, who constantly talk of the need to restructure the economy away from mining and raw material exports toward higher value manufacturing and service industries such as specialist engineering, banking and media.

That's slowly beginning to happen. Mobile firm MTN, supermarket operator Shoprite and Standard Bank are cited as the main success stories, having expanded aggressively into Africa to become its biggest operators in their respective fields.

A KPMG survey in February of South African private equity managers showed the investment industry slowly shifting its sights, with 46 percent of respondents saying Frontier Africa was the "next meaningful opportunity".

"If you had asked that question five years ago you would have got 90-10," said Warren Watkins, the accountancy firm's South African head.

Exports of manufactured goods to the rest of Africa also increased nearly four-fold from 2000-8 to $16 billion, helped by the likes of Johannesburg-based packaging firm Nampak, which makes everything from beer-bottle tops to plastic milk cartons in 10 African countries beyond its core domestic market.

Nampak is about to add an 11th export market, Angola, where revenues from offshore oil are beginning to build a big-spending middle class in an economy less than a decade out of civil war.

"Demand for packaging is closely allied to demand for packaged consumer goods such as food and beverages and if these grow then Nampak will clearly benefit," Nampak spokesman Graham Hayward said.

However, many South African companies have yet to realize where the future lies.

"Too many companies are sitting with decision-makers that view Africa through the prism of the 1980s and the early 1990s, where it was considered to be ludicrously risky," said Duncan Bonnett, of consultancy Whitehouse and Associates.

In the copper mines of central Zambia, just 1,200 km (750 miles) north of Johannesburg, South Africa is visible only in the form of Johannesburg-registered trucks carrying engineering kit.

The mines themselves are run by Indian, Chinese and Canadian companies, a telling example of the stiff international competition South Africa faces for contracts and concessions in what should be its back yard.

"South African companies need to wake up. A lot of opportunities are already being stolen from under our noses, and not just by the Chinese -- it's the Indians, the Brazilians, the Russians, the Canadians, Australians," Bonnett said.
(Editing by Simon Robinson)

Melko "positiivinen" artikkeli tästä tilanteesta. Jos katsoo noita väestönkasvu numeroita niin on selvää että Afrikkalaiset tulevat tuplaantumaan alle 40 vuodessa.

Mitä tämä nyt sitten tarkoittaa Afrikan ja Euroopan kannalta? Talous Afrikassa ei varmastikaan tule kasvamaan semmosella vauhdilla että kaikille riittäisi resursseja, ei edes tällä hetkellä ja miten saattaisi sitten käydä kuin nämä hyvin koulutetut ja kulttuurillisesti modernit kansat eivät löydä töitä eikä rahaa omasta maanosasta?
Arvaan että sitten ne suhteellisen nopeasti muuttuvat Euroopan ongelmiksi...