Africa’s New Economic Opportunities

Abstract

This article explores Africa’s new economic opportunities, paying particular attention to two economic prospects that are better than at any time since Africa gained independence. More specifically, it considers the exploitation of recent resource discoveries as a major source of revenues for Africa and the continent’s realistic chance at industrialization as China shifts its more labor-intensive manufacturing offshore. The article first assesses the implications of China’s economic growth both for middle-income countries globally and for low-income Africa, especially in terms of demand. It then looks at Africa’s distinctive geography and its important consequences, citing how resource endowment and location generate a simple but useful two-by-two categorization of Africa’s countries: coastal resource-scarce countries; landlocked resource-scarce countries; landlocked resource-rich countries; and coastal resource-rich countries. Finally, the article examines how Africa’s resource-rich and ethnically fragmented societies have influenced political allegiance.