Africa to buck recessionary trend

While visiting East Africa last week I had the opportunity to meet with both President Museveni of Uganda and President Kagame of Rwanda to discuss the global financial crisis. It is apparent that there is a lot of innovative thinking going on in Africa right now, around how to resist the severe impact of the Global crisis and maintain the flow of FDI.

A Recent article in Time Magazine ‘Africa a Business Destination’ demonstrated this, reporting that while ‘Africa, usually the poorest performing region in the world economy, is now likely to be among the best-performing’. A consequence of not venturing into the derivatives markets or subprime lending as the west did has left the continent relatively immune to the Global Crisis. While recent the latest estimates for global growth this year look bleak, the same article reports that Africa will ‘buck the recessionary trend’ and grow over 3% this year.

New ideas are emerging regarding investment in Africa in sectors such as Agriculture, Infrastructure and ICT. It is a new reliance on business as cash rich countries such as China and the Middle East look for new markets in which to invest, that will fuel this growth. Even the Investment funds in the UK, Europe and the US are beginning to take serious notice of Africa as an investment destination, practically the agriculture sector.

The Caribbean and the Financial Crisis

I was in the Caribbean last week preparing for our Business Forum to be held in Trinidad alongside CHOGM later this year, so was meeting with government and business leaders, 2 main concerns seem to be affecting the islands’ leadership.

Firstly that the financial crisis is having a direct impact on the islands economy as the level of tourism drops off as potential visitors in the US and UK chose not to travel or to stay closer to home for their holidays. I hope that the various stimulus packages proposed around the world shorten the duration of the Recession and allow growth and prosperity to resume as soon as possible as a drop in the level of tourism is a serious threat to smaller states.

Secondly, there is an indirect consequence that may potential have a bigger impact on some of the island states. The current trend of viewing tax heavens as separate from the rest of the globalised economy and as singularly bad, the focus should be inclusive and on the greater involvement of small states as part of global competition and as useful elements of the global economy.