“Very positive” the southern Africa economic outlook

“The outlook for southern Africa is very positive indeed but it is also very skewed”, Daniel Steinmann, editor of Namibia Economist, said via email to Africanews.it.

“The Southern African Development Community (SADC) consists of 14 member states. South Africa generates roughly 84% of the total combined GDP so you immediately see how small all the rest together is”, he added. Other topics of this interview were the Chinese investments in Africa and the deal between Italy and Libya.

After specifying that Africa nowadays is divided between 4 main regions due to historical, geographical and economical reasons, North, South, West and East, he said “linkages and synergies between the four are almost non-existent, even between Eastern and Southern Africa. The size of the continent as well as the natural barriers prevent effective integration of these four regions”.

The Africa economic outlook seems to draw a good image of the Continent. What do you think about it? What are your impressions as an African?

I can only speak for southern Africa. The outlook for southern Africa is very positive indeed but it is also very skewed. The Southern African Development Community (SADC) consists of 14 member states i.e. South Africa, Lesotho, Swaziland, Botswana, Namibia, Zimbabwe, Mozambique, Malawi, Zambia, Angola, DRC, Madagaskar, Seychelles and Mauritius.

South Africa generates roughly 84% of the total combined GDP so you immediately see how small all the rest together is. For instance, Namibia’s GDP is only about 4% of South Africa’s although our Income per Capita is comparable to theirs.

For purposes of economic analysis, Mauritius, Seychelles, the DRC and Angola can be left out of the equation.

Mauritius is tied much closer to India than to Africa and the Seychelles are historically and financially tied to Eastern Africa.

The DRC is isolated because it is so vast and underdeveloped. Except for the mining in Katanga provice (Lumumbashi), economic output is minimal.

Angola is a unique case. Although it is our northern neighbour, it is only recently that trading of some significance started between Namibia and Angola. Angola’s economy is built on oil and this goes directly to the US companies that control the oil fields, escpecially Cabinda. Angola’s diamond production is mostly informal and all diamonds are marketed through Endiama to De Beers.

It is also noteworthy that in the most recent negotiations (since December 2007), Angola, the DRC, Mauritius and Seychelles are not included. This indicates to some degree where the natural synergies already exist.

Madagaskar is sort of on the fringe of SACU (southern African Customs Union) talks, but the trade between Madagaskar and South Africa is significant so I assume it will eventually be included in the SACU agreement.

South Africa
‘s economy has grown steadily at around 5% per annum for the past five years. Namibia stands at about 4% while Botswana is outperforming everybody else with about 7% to 8%. Zimbabwe, as I am sure you know, is basically destroyed and will have to start from scratch.

South Africa, Lesotho, Swaziland, Botswana, Namibia and Mozambique form a natural trade block. These economies are already fairly well linked and inter-dependent. Growth prospects for this sub-region remains in the order of 5% or more per annum. Zimbabwe is also part of this natural block but until there is clearer political direction, it is futile to try and make an economic forecast.

 

China is investing more and more on Africa and its resources. Is it really a win-win scenario? 

There is certainly substantial Chinese investment in Mozambique, Botswana, and Namibia. One sees their construction sites everywhere. In Windhoek alone there are currently four major sites. Chinese importers operate five very large warehouses in Windhoek’s industrial area. Relatively large volumes of goods are exported by Chinese traders from Namibia to Angola but these goods are all of the Fast Moving Consumables type. I am not aware of any capital equipment going to Angola from any of the other SADC member countries. Investment in that country is driven by the oil industry and controlled by the American oil companies.

I am in two minds over Chinese investments. One sees very few local people on their construction sites and working in their companies. Almost all employees are Chinese nationals and if the popular press is to be believed, North Korean prisoners.

 

Can the recent Italy-Libya agreement open new relations between African states and old colonial powers as some have written in the worldwide press? How do you see this new relationship and this agreement? Is it good for Africa?

The agreement between Italy and Libya has absolutely zero influence on economic conditions in West, Eastern and Southern Africa.

Southern Africa in particular is a region driven by its own inherent development capacity and potential. It is not dependent on any of the three other African regions. It is much closer to Europe, the USA, India, China and Brazil, than to any other African region.

Obviously there is a significant amount of “old” colonial influence in southern Africa, particularly from Britain and Germany but there are no attempts at influencing us in any way, except to provide trade partners and to some extent, development capital.

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