The risk of under- and overestimating difficulties in Africa.
JOHANNESBURG, SOUTH AFRICA – The African extractive sector is back in the global spotlight. With 12% of global oil reserves, 40% of the world’s gold and up to 90% of chromium and platinum group metals (as estimated by the United Nations Economic Commission for Africa), it is not hard to understand why. The continent’s vast wealth in mineral resources coupled with impressive growth figures averaging at 5% annually over the last two years has given rise to great expectations in foreign investment flows. However, each of Africa’s 50 plus economies face challenges, both unique and general, raising the questions about the permanency of its new title of being the world’s second fastest growing economy.