Africa is a critical continent to watch in 2015. The year ahead
holds incredible opportunity – as well as considerable risk.
Africa is poised to receive the global attention it deserves at top-
level international meetings on financing for development, new
global development goals and climate change.
But alongside such opportunities, the world’s fast-changing
economic environment brings risk. Oil and commodity prices,
which plummeted in 2014, are likely to remain unstable. And the
banking system will be challenged by new regulatory and
compliance frameworks. These macro changes have so far been
greatly underestimated.
Here are some of the scenarios we see unfolding in Africa in
2015:
Power generation leaps ahead: Africa’s energy needs are huge –
but so is the scope for energy-poor nations to leapfrog straight
to clean energy. For now, fossil fuels are still vital to power
homes, factories, schools, hospitals and overall economic
growth.
But in spite of the oil price drop, renewable energy sources are
poised to claim a huge and growing share of Africa’s energy
mix.
Changing the climate narrative: Global climate negotiations have
so far yielded little for Africa. In 2015, African nations will
become more forthright, seizing the chance to shift the climate
narrative from one of dependence to one of opportunity and
transformation. Controversially, that will mean defending Africa’s
continuing need to exploit fossil fuels, and showing the rich
world that climate justice means investing more in clean energy
and protecting African forests and farmers.
Breaking the finance barriers: A troubled global banking system,
increased U.S. interest rates, tense climate finance negotiations
and less international aid: for all these reasons, a lack of
available finance is likely to be a key constraint for Africa in
2015. But in response, African investors and governments will
innovate more.
Peer-to-peer banking and mobile banking will thrive. More and
more Africans will embrace the power of domestic savings – and
insurance markets will emerge as an exciting and effective
means to invest those savings. As a result, African banks will
finally face a much-needed shake-up.
Africa accelerates its transformation: The pace of investment
into Africa will slow, as oil and gas exploration money drops off
and higher US interest rates attract foreign investment to the
United States. But many investors will see the long-term
potential of a whole array of African industries, such as
renewable energy, farming, fisheries and fashion.
African leaders and their partners will recognise that they need to
seize the chance now to attract foreign investment while this
brief opportunity exists.
Oil’s silver lining: Low oil prices will pose problems for many
economies, including Algeria, Angola, Nigeria and Ghana, but will
also offer opportunities for many to cut subsidies for fuel that
have exacerbated inequality.
Nigeria in the spotlight: Africa’s most populous country and
largest economy will remain tense ahead of its February
elections, which will show the world both its incredible strength
and fragility. Nigeria has a chance to set a course that will
harness its brilliance and energy to be a positive global force.
Secrecy’s last stand: Africa will benefit from the continuing
global push for greater transparency, including in the extractive
industries. In the United States, resistance from the American
Petroleum Institute to increased revenue transparency will be
seen for what it is – a tiresome, reactionary trend to the global
transparency revolution.
The US will push ahead with implementing the Dodd-Frank Act
and plans to join the Extractive Industries Transparency Initiative
(EITI). More Swiss-based commodity companies will sign up to
the EITI Standard, following Trafigura, which announced its new
policy in November 2014.
The Swiss commodity-trading sector has long been viewed as
the last bastion of secrecy, standing firm against a global
revolution that elsewhere is bringing transparency to the oil, gas,
and mining industries and their operations in Africa.
Making profits public: The crackdown on corporate secrecy in
Europe, including anonymous company ownership, will continue.
And the United States will be forced to follow suit. Countries will
feel increased pressure to make public registers of who owns
companies – denying shelter to those who have been hiding
illicit gains from Africa.
A global alignment of interests will see business leaders,
the banking industry and law enforcement authorities
increasingly raise their voices in favour of this level of
transparency.
Defending coastal economies: Closer to home, some African
nations will support the Port State Measures Agreement, which
needs 25 national ratifications before it enters into force. Africa
has 35 coastal nations (38 counting island states) and has some
of the world’s regions worst hit by illegal fishing. Africa’s role will
therefore be critical in pushing forward this important global
agreement.
Global influence grows: And as always, the continent will
continue to build its pan-African identity and cultural influence
around the world. Watch out for Africa fashion and films going
global, the rise of pan-African banking, pan-African food
markets, and new pan-African social media platforms (such as
Mara Online) emerging to challenge the global giants of Twitter,
Facebook and LinkedIn.
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