It is often quoted that in 2000, the Economist magazine ‘wrote off’ the entire continent of Africa with the headline ‘The Hopeless Continent’. And commentators will also tell you about ‘Africa Rising’, the 2011 headline from the same source. What would they say today? If the last two years are anything to go by, I would propose ‘Africa, the Rollercoaster Continent’ or ‘Africa, Unpredictable’.
Two years ago, we were full of optimism that, despite all the usual problems (which we had just learned to live with, like a sore tooth), Africa’s time had come. High prices for oil, iron ore, copper and other commodities were fuelling strong economic growth. There were more democratic elections taking place than ever before. Airlines, both international and African, were expanding their routes.
And then we were hit by wave after wave of problems. In Nigeria, Boko Haram threatened the safety and security of locals and tourists, a situation which extended to neighbouring Chad, Cameroon and Niger. There were election uncertainties, and a lack of activity after the much-lauded (and unexpected) result. At the time of writing, the Nigerian government still has no Ministers appointed.
Ebola devastated parts of West Africa, severely affected the travel and tourism industry elsewhere in the region, and reached its poisoned fingers out to the entire continent. The oil price crash and the devaluation of currencies in several countries have also played their parts in destabilising the continent.
China is importing less of what Africa produces, and exporting less to Africa because of the slowdown and currency devaluations, with a downward spiral seemingly inevitable.
But there’s a basic rule in physics that says that for every force, there is an equal opposing force. Translating that into what we are experiencing currently in Africa, it seems that for every negative event there is an accompanying positive. I say that as an ‘African optimist’, but others may reverse the maxim. And consider this – a recent McKinsey survey reported that those who have already invested in Africa are more positive about the continent’s prospects than are those looking in, who have yet to invest.
Surely the China-effect must improve. China’s economy has been managed closely by the government, and surely they will manage to raise it back to where it was before?
Ebola appears to be under control. Although there are, sadly, still a few new cases being reported in Sierra Leone, they seem to be in areas where the management of the disease was less effective from the get-go. Nigeria no longer has health screens for travellers at its airports.
Also in Nigeria, the power situation has improved immensely, from an estimated 1,300 megawatts generation a few months ago, to 4,500 megawatts in August. But, and here’s a good example of the positive and negative working simultaneously, I understand that the power transmission infrastructure can only cope with a maximum of 5,000 megawatts, still far below the level required to stop the noise of the generators, and revive the country’s manufacturing sector. So, there’s certainly more frustration is in sight.
We are still seeing new hotels open in West Africa – the latest in Lagos is Mantis’ The George, a high-end boutique property in Ikoyi. The Radisson Blu has reopened after six months’ closure, and the Renaissance in Ikeja looks to be making progress. The Kempinski in Accra is expected to open in the fourth quarter of 2015, and the Radisson Blu is underway in Abidjan – the same developer has started work on the Sheraton in Bamako. And the global chains are still actively prospecting for deals.
On the aviation front, Brussels airline recently announced an increase of flights to Monrovia from two to four per week. This wasn’t just a commercial decision, but also an extremely important political statement. On the downside, though, the latest IATA figures show that Africa is the only region experiencing a downturn in passenger traffic.
Some analysts reckon that Nigeria’s economic growth could be as low as 2.5% this year, one third of what it was in 2013. Hardly ‘Africa Rising’, but at least we are is still in positive territory. South Africa’s economy is stagnant or declining, and two of the other BRICS nations, Brazil and Russia, are in recession. MINTs appear to be faring better than BRICS.
And we must believe that once we have a government in place, once the China situation is resolved, and once the global economy as a whole returns to robust growth, Nigeria and the rest of West Africa will benefit.
CEO: W Hospitality