Manufacturing in Africa

In the Daily Bell interview I did a few weeks ago, in response to the question of whether Africa is being prepped by the West as a China or Japan style manufacturing hub, I said I disagree because investment flowing into the continent is going mostly into resources and infrastructure, and that the investment in these sectors are sustaining the consumer boom on the continent.

Manufacturing and true productive economic activity is needed to maintain the consumer boom over time, and without that, Africa is being set up to be a big bubble economy that will burst once the western money printing presses stop running. The savings must come from within Africa to sustain the Africa economic boom over time.

The following graphic is of the fastest growing manufactured goods trade routes in the world from 2005-11. Barely any manufactured goods trade growth was being seen in Africa over that period. In fact, Africa lags well below other continents when it comes to manufactured goods trade growth over the period, and doesn’t feature in the top 30 fastest growing manufactured trade links. This indicates Africa really is the next big vendor financed play for the Chinese, Japanese, and Indians.

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About Chris Becker

Chris Becker is Market Strategist and Economist at ETM Analytics. Becker is Co-Founder of the Mises Institute South Africa. Visit his personal blog chrislbecker.com. Follow him on twitter @chrislbecker.
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