Friday, June 6, 2014

Africa : The surprises have been on the upside rather than on the downside

This was your first trip to Nigeria. What were your impressions?

I had low expectations because usually what you read in the US press about Nigeria is only bad news, violence, terrorism, lots of other bad stuff. I was actually positively surprised. You have a country that has one tenth of the power capacity of South Africa, one quarter or one fifth of the infrastructure of South Africa, and while South Africa is growing barely at 2%-2.5%, Nigeria is growing at around 7% or so.

Of course it’s an unfair comparison because South Africa is a middle-income country while Nigeria has a low per capita income, so usually low per capita income countries grow faster because there is a catch-up of growth. Nigeria has oil and gas and a lot of energy that helps its growth. Since they are doing so well with such little power and infrastructure, some people say that Nigeria could grow by 10% by making the right investment in infrastructure.

What was the highlight of your trip so far, other than the nightlife?

These are societies which are becoming urbanised. These are thriving urban environments where you have good restaurants, good clubs, music venues. You go to a club and hear the same kind of electronic dance music, top 40, that you hear in Ibiza.

And any surprises?

The surprises have been on the upside rather than on the downside. Of course there are tons of challenges in each of these countries but there’s an element of vibrancy that you see both in economies that are wealthier like South Africa or Nigeria but even in a place like Congo.

There is a long list of things that have to be improved in each one of these economies and you cannot take economic success in the future for granted.

I think sometimes there is a little bit of an excess of saying Africa is rising, everything is going well, but that depends on having good sound institutions, good policies, good leaders in the private and public sectors to make them work.

There’s always a risk of slippages and things turning wrong, so I would say one should not take the current success for granted, but overall the surprises have been on the positive. - via africanbusibnessmagazine

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics
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