It is too soon to celebrate Africa's economic growth, which is expected to surpass the 5% mark this year. The reason for this is the expected lull in the Chinese economy, according to Martyn Davies, CEO of Frontier Advisory.
“The set of drivers of Africa's economic growth does not comprise better internal economic planning or other internal factors. The major driver of the progress has been the Chinese economic growth and the country's demand for mineral resources and other commodities,” said Davies on Friday morning on the last day of the 21st World Economic Forum on Africa, held in Cape Town.
“I therefore think we should not get too drunk on the growth patterns we have seen in Africa over the past year or two, simply because the enabler of this trend - the decisions that are made in Beijing to invest in Africa - will not last forever. The economy in China is expected to flatten out and this will have an impact on Africa,” Davies added.
Experts claim that China's economy is overheating, with the main culprits being skyrocketing inflation, which has hit a 32-month record, and problems within the real estate sector. - I-Net Bridge