Africa’s Economic Future: Investment Trends and Strategic Alliances

More than a century after the Berlin Conference when Africa was carved up by major European powers, it appears a new scramble for the continent is underway-this time for a share of the continent’s enticing economic opportunities. Investment interest in Africa is at an all time high, global business leaders are discussing how the continent can benefit from new financial ventures.

In the last decade, China has pumped billions of dollars into trade with Africa, joining other multinational corporations from Western countries. Countries such as Brazil, Russia, India and China have intensified their efforts to forge close alliances with Africa in hope of gaining access to the continent’s vast and rich resources. Brazil’s top investment bank BTG Pactual has planned to raise $1 billion to create the world’s biggest investment fund for Africa, focusing on critical areas such as infrastructure, energy and agriculture.

Although Brazil and Africa are separated by the Atlantic Ocean, they have long historical and cultural ties, dating back to the days of the slave trade in the 16th century, when scores of people on the continent were shipped to the former Portuguese colony to be exploited as slaves on the sugar cane plantations.

Today, Brazil is using this unique cultural affinity with Africa as an advantage in its competition with the other powers acting on the continent. An impressive decade of economic growth and political stability in many parts of Africa, coupled with a series of structural and institutional reforms has attracted emerging global powers into the continent, seeking to gain a stronger foothold on the continent in their bid to reach more markets and forge new political alliances. Is this new found engagement in Africa’s best economic and political interest?

Would Africa be better off with these new business opportunities or would the continent be devoid of its vast and rich resources? It is imperative that African political and economic actors put in place sustainable measures and policies to optimize these business ventures. Visionary leadership is also needed to put the continent on the right trajectory.