In a feature for African Business magazine, the regional head of Africa at Commerzbank, Christian Toben, offers his perspective on the challenges facing Sub-Saharan African economies.
After a “decade of considerable economic progress” countries across the region have been hit hard by weak commodity prices. Revenues from a host of key resources – from oil, coal and gas to copper, cobalt and coffee – have diminished substantially over the past two years.
Drawing on Commerzbank’s in-depth regional report, ‘Tackling the headwinds after the economic turnaround’ Toben notes that, faced with slack demand from consumers abroad – particularly China, responsible for buying 40% of all the region’s produce – dependence on raw material exports has effectively “turned from a blessing to a curse”. The wider economic impact has been significant: growth rates are falling, fiscal pressures are mounting, and debts are looming.
Toben argues that increasing the chances of recovery will depend on those global banks able to facilitate international commerce, help attract new international trading partners, and build a bridge to local financial institutions in Africa. In this way, the region’s economies might have the means to fund their diversification into higher-value manufacturing and service sectors, and prove more resilient to future shocks.
The article can be found in the latest edition of the magazine here (a subscription is required).