Africa’s recovery likely to be faster than expected

“As a region, Africa is diverse. Many of its key markets are oil importers and almost all import food. African countries stand to benefit from commodity price weakness” argues Razia Khan, Standard Chartered Bank’s regional head of research for Africa.

Ms Khan surmises that while commodities have been a contributing factor to the continent’s recent growth, the commodity boom that overheated last year was not the most important factor.

The fact that the continent’s resource rich and non-resource rich countries all recorded growth in the same period points to the fact that there were other drivers to the growth in African economies.

Even then, one fact remains certain, that while commodities are unlikely to regain frothy peaks recorded in the first half of this year, the normal recovery pattern makes it quite conceivable they will regain the relatively high levels reported in 2006 and 2007 — crude oil prices of $60-100 per barrel — in the next four years.

As the world turns towards domestic demand in both China and India — the world’s two most populous countries — a rise in commodity prices is expected as the two countries rush to satiate the appetites of their local industries.