Columbia International Affairs Online: Working Papers

CIAO DATE: 03/2012

Africa: open for business The potential, challenges and risks

February 2012

Economist Intelligence Unit


In 2001 The Economist described the continent, perhaps with undue harshness, as the “hopeless continent”. But Africa, one way or another, has managed to survive the steepest contraction in global economic activity since the 1930s, and has been rebounding quickly since the last decade. African GDP has outpaced world growth since the start of the last commodity boom in 2001, reaching 6% in mid-decade. Despite slowing sharply in 2009, as global growth and trade retreated, African growth stayed positive at about 2%, and the downturn has clearly been “V-shaped”. In 2011-12 Africa is expected to grow faster than any other region or country in the world, apart from China and India— and this is more than a just a commodity story. Although Africa is not immune to global conditions—as seen in 2009—the continent is fairly resilient. For instance, a downturn a decade ago would have resulted in negative growth of 6-10%, and it would have taken another decade for growth to return to positive territory.