Europe is on course to become ‘the largest open air museum’, whilst Africa’s growth has been ‘stellar’ – just two of the points made to around 40 guests at the recent Standard Bank breakfast seminar held by Chief Economist and Head of Research, Goolam Ballim.
The seminar entitled: Global and Africa Trends took account of the research Goolam and his team of 72 analysts perform for Standard Bank. There was positive news on the global economic outlook, assuming the USA is able to sort out its current financial impasse and raise its debt ceiling, with Europe and the UK seeing modest growth which should continue. Goolam warned that the coming months are likely to be difficult as the US Federal reserve tapers its quantative easing and backs away from supporting the economy.
In Europe, whilst there are currently signs of optimism with modest growth, Goolam warned that there are several factors which mean the region is storing up trouble. There is the steep debt the region has built up, its declining working population, set to fall 14% or 30 million people over the next 20 years, and its high unit labour costs which all make Europe uncompetitive. Goolam said that Africa’s population on the other hand is young and it is growing, Nigeria alone will grow from 180 million people to 230 million by the end of the decade. The median age in Africa is also 20 compared to Europe’s 40, and by 2050 it’s estimated 25% of the world’s population will be African.
Ian Hamilton, Head of Corporate & Business Banking, Standard Bank IoM said the seminar had highlighted the potential as well as the risks for our global economy: ‘The intra regional trade is only around 10% compared with Asia’s intra region trade, but that is now growing faster in Africa than it is with the rest of the world. The continent is heavily under-urbanised, and its consumer markets are only just starting to develop. Whilst there are as many fixed telephone lines in Africa as there were 13 years ago, back then there were only 20 million cellular phones, now there are 750 million – that is the kind of growth figures we are talking about, and so the potential becomes very clear.’
Goolam has been recognised as producing leading economic research on Africa. He is a past winner of South Africa’s top economist award and adviser to the country’s Minister of Economic Development and other public sector officials.
The seminar was held on Tuesday 1st October at the Standard Bank offices.