Recent economic reforms in Africa along with deals given to China over resource rights have allowed the continent to experience gradual growth despite the global decline. The current North American drought however has caused food prices around the world to skyrocket and this trend poses a threat to all of the development Africa has made. Reuters reports on Africa’s current economic situation and the effects of a possible food shortage:
Rising food prices could hit commodity producers in Africa with a dangerous “double whammy” when combined with an economic slowdown in Europe and China reducing African exports of oil and raw materials, a leading African economist said on Tuesday.
Mthuli Ncube, Chief Economist and Vice President of the African Development Bank (AfDB), saw the threat of a food price spike casting a shadow over an otherwise positive growth outlook for Africa that will outpace much of the rest of the world.
The 2012 African Economic Outlook produced by the AfDB with other international institutions foresees Africa’s growth accelerating to 4.5 percent in 2012 from 3.4 percent in 2011 in a display of healthy resilience in tough global conditions.
But the World Bank warned on Monday that a worrying broad-based rise in grain prices fuelled by a severe drought in the U.S. Midwest would hurt the world’s poor, including those in the world’s least developed continent, Africa.
“It is a threat … if they (the food prices) keep rising, again we will have social upheaval that will threaten economic growth in Africa,” Ncube said in an interview on the sidelines of a youth employment promotion event in Johannesburg.