DIVERSIFYING
AFRICA
A TIME OF CHANGES, CHALLENGES, AND OPPORTUNITIES OPPORTUNITIES. BY MIGUEL SPĂNOLA
T
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he world has changed a lot in the last few years, with the international financial crisis, and more recently, with the commodities crisis. Africa is no exception. Countries like Nigeria and Angola, once two of the fastest growing economies in Africa, have been struggling since the price of oil came down to record lows. Although the commodity crisis affected most countries, the context and reasons for the current difficulties across the continent are quite varied. Countries and regions in Africa are at different stages of maturity and therefore facing diverse challenges. There is a common lack of diversification in economies that have been heavily dependent on the oil and gas industry. For some of these countries, including Angola, the need to
diversify shifted from being necessary to becoming crucial. A recent International Monetary Fund (IMF) loan might be a good catalyst for reforms in several sectors of the Angolan economy, such as taxation and public procurement, and for transparency and other structural reforms and measures in order to boost the private sector and reduce the countryâs dependence on oil (which currently represents 95 percent of government revenues). For Mozambique, the oil and gas industry is just starting up, with recent discoveries of massive natural gas reserves in the north of the country, such as Pemba in the Rovuma basin. Although Mozambique traditionally has a more diversified economy, and as of yet does not suffer from the âDutch Disease,â or the apparent causal relationship between the increase in the economic development of a specific sector (for example, natural resources) and a decline in other sectors (like the manufacturing sector or agriculture). It is also lacking major structural reforms in several sectors.
THERE IS A COMMON LACK OF DIVERSIFICATION IN ECONOMIES THAT HAVE BEEN HEAVILY DEPENDENT ON THE OIL AND GAS INDUSTRY. w w w . b e s t l a w y e r s . c o m | 25