Africa's Global Political Economy (Essay Sample)

Africa’s Global Political Economy
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African’s Global political economy
Africa is known for its abundance of opportunity being that it is the world second largest continent which is richly endowed with variety of resources, it only needs to set aside its intra- continental differences in order to help it maximise the opportunities from growing foreign interest. The history of Africa is dynamic and is shaped by great migrations, wars, slavery, colonialism and the cold war, but currently Africa is known to be reclaiming its place on the world stage both socially, politically and economically hence increased development. Consequently, I totally agree with the argument that “what Africa needs in order to achieve growth and poverty reduction is not more foreign but more trade and investment” due to fact that as per now concerning the global economy, Africa has the advantage; it only needs to win the game.
With much innovation and initiative, Africa is currently grabbing the world’s attention, with more international companies already setting up offices in the continent. For example increased banking interest and increased stock market performances. This has finally led to a point where major regions have recently experienced strong economic growth globally which is driven in part by the continents wealth and natural resources. For instance, According to “Sustainable Development Report on Africa Managing Land-Based Resources for Sustainable Development” article2008 marked the decade that Africa’s energy and mining industry came to life by bringing unprecedented oil export boom (UNCSD, 2012).
Again it is no secret that Africa has infrastructural deficiencies that includes poor transport networks and low electrification levels within the continent. However, the investment from within the continent and abroad is the solution to this. The foreign countries is now scrambling for Africa’s natural resources and oil imports is now a priority for Africa. The investors are ready to build the necessary where with all that goes along with the tapping into the African continent riches.
Another important issue is the wealth of metals and minerals which currently has a strong demand in the global economy. The global now needs raw materials from Africa to feed its voracious appetite especially in China and India which are seen to be insatiable. The continent is believed to have vast resources i.e. producing about 13% of the world’s oil, 21% of gold, 46% of diamond, 57% of cobalt and 50% of platinum group metals (Pedro, 2004).
A growing world population also offers Africa some incredible opportunities. It is believed that by 2030 the world population will rise to 8.3 billion thus the demand for resources on the world will increase to unprecedented levels. Such type of crisis should therefore be seen as an opportunity for Africa for it to uplift itself through investing in innovations and research as this brings much potential for the continent. Africa itself can play a key role in meeting the consumer’s need of people of up to billions in the current fast growing younger markets. With this future focussing, there are great opportunities for this continent Africa.
Even though foreign investment is also welcomed in Africa, it is considered unique. Its main theme is that it is non- colonialist with equal partnerships. It is known that foreign investment must always promote and preserve democracy across the African continent. Democracy which is one of the developments is spreading and there is increased number of democratically elected leaders. This trend must be allowed to continue and it should not be jeopardised by foreign investors. Even if there is global downturn in terms of Africa’s economy, it is obvious that the interest of multinational companies in this continent Africa has never waned. These companies are still looking to the continent for fertile opportunities and astute investment possibilities in Africa; this has really improved the African development. These investments also play responsibility of contribution to poverty eradication through creation of employment opportunities to local African people.
Another important aspect that Africa needs to embrace is the issue of foreign direct investment that will directly develop Africa. According to “World Investment Conference Report” (WAIPA, 2005) China has shown an exceptional interest in recent gross domestic product numbers in Africa with South Africa being the biggest foreign direct investor among other African countries; this has been some of the strategies for the fast growth of South Africa in terms of economy and political stability. Africa is also being perceived as less risky politically, in terms of currency, governance and trade; therefore, it is believed that it offers rates of return far more appealing as compared to what can be achieved in the developed countries. Africans is the marginal player in global trade because it is responsible for less than 2% of world exports and the imports. For Africa to ensure increased development and sustainability, it must have outstanding investors (Power, 2002). This means that there should be long foreign direct investment into new productive capacity that eventually leads to job opportunity creations. Africa has therefore been seen as a substantial surge in foreign capital inflows the past years into Africa.
It has been realised that any curtailment in foreign capital inflows into the continent could seriously affect the growth and poverty reduction in the continent. The reversal /slowdown in the flows of these foreign investors are the last thing Africa needs for it to develop. Most of African countries usually use foreign inflows to finance the much needed infrastructure investment but if the cutback spreads to the official development assistance, then the lives of millions of Africans may be threatened due to increased poverty (Goodland, 2002).
A good number of challenges have to be addressed for this continent Africa has to develop since these are the pillars for eradication of poverty and sustainable living standards. These aspects to be addressed include transportation cost whereby it has been noted that Africa’s transportation cost are the highest as compared to any region in the world (MINECOFIN, 2005). The landlocked countries end up paying about 75% of the value of their export good. Poor infrastructure and inadequate infrastructure especially roads, ports and airports are the major factors that hinder Africa’s development. It is known that more than 20% of African exports usually reach United States by air and it is estimated the cost of transport on these export is up to 50% of the values of total export (UNCSD, 2012). However, international air transport costs across Africa are up to four times the cost of getting the same goods over the Atlantic Ocean to oversee countries. Consequently, there is need to increase connectedness between the countries of Africa to enhance the trade.
The world’s economic axis is now found to be shifting and for any country to compete in this league of focussed and ambitious players. In the same way, continent Africa has to scale up its efforts to be one of the successful global participants. Africans may not believe that they are this different but the statistics has it that Africa has more English language speakers as compared to United Kingdom, more French speakers than France and more Portuguese speaking people as compared to Portugal (Stanley, 2010). With all these, it may be deduced that African is not that separate from these people who have led to the massive development of their respective countries.
Another way of solving Africa’s problem is through regional integration. Integration is an imperative idea that helps to overcome the limitations of the continents having many small and fragmented economies. For instance the regional t...