africa

Yale Center for the Study of Globalization
to an even greater extent, with other developing countries accounting for more than
half of SSA’s trade in 2008, and Asia and Western Europe accounting for equal
shares (McKinsey Global Institute, 2010). It is projected that by 2060, the United
States and European Union will receive only 27 percent of Africa’s exports, with
China alone receiving almost 25 percent (AfDB, 2011: 20).
In recent years, trade connections have helped synchronize Africa’s business cycle
with that in the global economy. The convergence is particularly noticeable between
African countries and the BRICS, and Africa’s trade with BRICS has four times as
much impact on the convergence as does Africa’s trade with the G7 (Diallo and
Tapsoba, 2014). Emerging markets offer African countries a unique combination
of financing, including FDI, official development assistance, loans, and grants, as
well as deals regarding trade, infrastructure, investment, and aid (AfDB and others,
2011). In this regard, Africa is better able to build up its industrial capabilities through
innovative development cooperation.
Much interest from emerging markets focuses on African land and natural resources,
but nonetheless provides opportunities for Africa to enhance its productivity through
deals involving both resources and industry. In countries such as Ethiopia, Chinese
investment is pouring into non-commodity sectors—construction and light manufacturing.
Indeed, Africa has slowly started taking advantage of the offshoring of
manufacturing jobs from East Asia and elsewhere, generating employment and
helping the continent link in to higher segments of global value chains. South African
investments in the rest of the continent have also been growing rapidly, accounting
for many industrial inputs across the continent and providing a large market for other
African countries’ commodity exports.
These new and more diverse sources of sustained growth for Africa have aroused
enthusiasm that the continent is not on a temporary and purely commodity-dependent
path, but rather will emerge as a significant pole of global growth (ECA and AUC,
2012).
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