Afrimambo

World Economic Forum on Africa
Africa’s economic development and investment potential are to come under the spotlight at the World Economic Forum (wef) on Africa 2007 in Cape Town this month (June). The wef is perhaps best known for its annual meeting of world political and business leaders in the Swiss town of Davos, but it also holds similar regional conferences and the Cape Town event will be the latest in the series of African meetings. Delegates at the three day conference will discuss a range of issues, including job creation, good governance and improving the competitiveness of African states and economies.

Two themes seem to permeate much of the World Economic Forum’s deliberations: the increasing integration of African countries into the world economy; and the need to build capacity.

In the past, many economies have been so isolated from the international political economy that they have been relatively unaffected by global recessions or booms. Economic interaction with neighbouring states has often been very limited while trade with the rest of the world has usually been reliant upon the export of a handful of commodities and the import of refined petroleum products and consumer goods by the more prosperous countries. Yet it has now become clear that many African economies are feeling both the benefits and disadvantages of globalisation more than ever before. The Ghanaian IT sector, for example, is growing on the back of the outsourcing of services from North America and Western Europe.

Despite the negative impact of trade barriers – particularly in the agricultural sector where African producers are restricted from exporting to many industrialised nations – global tariffs and duties are gradually falling while new technology makes it easier to transfer the operations of some companies to parts of the world where salaries and other costs are much lower, such as most of Africa.