Africa’s economies are being transformed by a surplus of workers, more stabilization, and technological advancements, making it less reliant on extractive sectors. Foreign direct investment (FDI) in Africa has been almost entirely concentrated on the extraction and export of natural resources for more than a century. The momentum has moved since the millennium, and the trend has ultimately flipped in the last several years. Global investors are increasingly interested in Africa’s people rather than its physical assets.
Africa developed rapidly between 2000 and 2014, strengthening conviction in the idea of an “Africa rising.” However, development in Sub-Saharan Africa has slowed since 2015, and the gloomy forecast for commodity prices has put doubt on the continent’s economic potential, prompting many to question the “What is africapitalism” and “Africa rising” narrative.
Four key shifts are taking place at the sector level across Africa. To begin with, African agriculture is expanding at a higher rate than agriculture in other parts of the world. Second, growth appears to be bypassing Africa’s manufacturing sector, which now accounts for only 7 to 8% of GDP and is performing at a level comparable to that of other emerging countries. Third, the natural resources industry in Africa has increased its contribution to economic growth by threefold. Fourth, given the recent rebasing of the Nigerian economy, the increase in Africa’s services sector has been significant and is sure to be far bigger than currently anticipated.
What Is Africapitalism
Africapitalism is a rallying cry for businesses to make decisions that would generate economic and social prosperity while also promoting sustainable development in the communities and countries where they operate. Enterprises will become more successful when the communities they serve become wealthier consumers, healthier and better-educated employees, and even entrepreneurs who move on to become suppliers and service providers as a result of such a decision.
Africapitalism means that we cannot rely solely on our governments, donor countries, and philanthropic groups to carry out development work. The private industry must participate in the development process. The Edinburgh Project is one of the Africapitalism Institute’s supported projects. Among other things, the Edinburgh Project intends to redefine capitalism in Africa by concentrating on the role of business leaders, investors, and entrepreneurs in the continent’s growth.
Africapitalism, on the other hand, has significant drawbacks. Prioritization of Africa will be given when it comes to economic and corporate decisions, even if that prioritization does not particularly adhere to strict precepts of the international economic world order. For example, putting Africa first should not always be based solely on cost and profitability considerations. Africa could be prioritized over other economic geographies in some circumstances, especially where the trade-offs are minor and insignificant.
Capitalism has a lot of cultural overtones and impacts. The European version of capitalism differs from that of the Anglo-Saxons. The former is more socially focused, whilst the latter is more economically oriented. Different socio-cultural theories inform these variants. Given the importance of the state in promoting economic progress, the emergence of capitalism in China, for example, is unusual.