The global economy is suffering from a collective crisis of confidence. Worries over the sovereign debt crisis in the Eurozone and greater uncertainty over the economic health of the US, combined with high energy prices and policy indecision in the major G7 economies have led to fears of a 'double-dip' recession. The IMF in its latest World Economic Outlook (October 2011) warned: "The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently and downside risks are growing"
Encouragingly, sub-Saharan Africa (SSA) has rebounded fastest than from any previous external shocks to become the world's second-fastest growing region (after Developing Asia). The International Monetary Fund forecasts real GDP growth of 5.2% in 2011, rising to almost 6% in 2012 - just shy of the pre-crisis average growth level.
"Africa has taught the world a lesson in macroeconomic reform and stability," said Obiageli Ezekwesili, World Bank Vice-President for the Africa Region. She urged strategic investors seeking the right market amid the financial storm in advanced countries to "rediscover Africa", where several decades of robust growth appear a likely scenario for this resource-rich region.
The resilience of the majority of the African countries to the 2009 global downturn reflected their structural reform efforts and improving macro-fundamentals. Throughout the continent, fiscal soundness and monetary discipline are increasing. Debt as a share of exports has fallen dramatically, to levels comparable to those of other developing re gions, and sovereign credit ratings in most African countries enjoy a stable to positive outlook. Analysts, investors and the media are increasingly able to single out countries in SSA with good track records and prospects that inspire investor confidence.
Africa's sustained growth has been supported by rising external inflows (capital and investment, particularly in recent years from Asian sources), strong commodity prices, political stability, an improving business environment and higher investment in infrastructure and education. There is a shared consensus that wealth creation will come only from the private sector and increased integration with the global economy.
Renaissance Capital, the Russian-owned investment bank, argues, "Africa can there fore no longer be written off as a backwater in the global economy. It predicts Africa's GDP...