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Africa Goes Boom

Is this Africa’s golden age? An age when dusty streets and tin-roofed houses are replaced by office blocks and beach resorts? Or is it just the next stage in the exploitation and corrupt mismanagement of African riches?

Perhaps it’s both. Canada’s Globe and Mail takes a fascinating in-depth look at “Africa next”—an analysis of the continent’s economic boom and where the continent might be headed.

Every week, another bank or investment fund is touting it as the next big thing, an emerging lion to follow the Asian tigers. Resource exports are soaring, and growth is climbing to unprecedented heights—second only to Asia, and fast catching up. And for the first time in generations, Africa is receiving more investment than foreign aid. […]

Many factors have made this possible. After decades of stagnation, in recent years most African countries began to reform their economies. Wars, coups, political instability and disease have declined since the late 1990s. And rising commodity prices have lured investment in African resources.

Mobile technology is leapfrogging ahead (Africa has become one of the fastest-growing markets for Canadian firm Research in Motion’s BlackBerry) and a new consumer class has been born. Multinational retailers are leaping in, and even Wal-Mart recently acquired a chain with nearly 300 stores in 14 African countries.

The boom doesn’t benefit everyone, however.

As foreign investment mounts, it often brings with it traumatic social dislocation and a distorted economy. The money often disappears into the pockets of a corrupt elite, while ordinary Africans see fewer benefits. Oil-rich countries such as Nigeria and Angola are the most extreme examples, where billions of dollars in oil revenue have gone into the foreign bank accounts of top officials, leaving most of their citizens poorer than ever.

There’s no denying that Africa has huge potential. In general, the security situation across the continent has improved: wars and coups are less common than in past generations. Across the continent, growth rates have skyrocketed. That’s more an indication of how poor most African countries were to begin with (like Sierra Leone, 2012 projected growth rate: 34 percent). But between natural resources and the growth of vast new markets, Africa is booming. In fact, the boom is picking up such pace that “migration flows are beginning to reverse, with thousands of construction workers from Europe flocking to Africa to find jobs in the boom.” Europeans are coming to Africa for jobs! About 100,000 Portuguese live now live in Angola (formerly a Portuguese colony), more than three times the number of Angolans living in Portugal. (h/t Marginal Revolution)

The obvious question is how will African governments handle the boom? By and large, most African governments unfairly distribute natural resource wealth and foreign investment. Dutch disease looms darkly on the horizon. Friction between local communities and foreign farms and mines is a constant problem. It’s possible that all this good news is just another false dawn.

We shall see; optimists have been hailing a bright new day for Africa ever since the European powers began to retreat in the 1950s. They’ve been more wrong than right for a long time. But other parts of the world have managed to overcome long term stagnation and decline. And it’s also worth noting that hundreds of millions of Africans have embraced Christianity in the last fifty years. The rise of Christianity has been linked with social and economic progress in many places around the world; it may well be that Africa will be the latest place to flourish under the Cross.

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