Africa: the next Eldorado or a troubled continent?

Abstract

Africa is a young and fast-growing continent. It is urbanizing at a very high pace and progressing in income per capita, trade liberalization, human development and doing-business indicators. African countries are, however, very different from each other, with many still having a large informal sector, unstable institutions and unsolved ethnic struggles. This means that some countries can offer huge investment and trading opportunities, but others represent a risk, linked to migration, fragility and conflicts. This note highlights some recent positive ‘patterns and trends’ in the continent as a whole and the main challenges, suggesting that with changes in the environment and in the narrative around Africa, domestic and EU policies need to change. African governments need a long-term perspective: rather than just reacting to emergencies, they must tackle new challenges: market liberalization in a world of trade wars, unplanned fast urbanization and the quality of education, health and social policies in a resource-scarce environment. To exploit the positive spillovers of geographical proximity and not to leave the ground to China, the EU should envisage an innovative policy, also with a long-term view. Aid as in the past is not enough nor what is needed. For an aging EU, Africa can become the main source of human capital, so the education of Africa’s young generations is important for the development of both Africa and Europe. Furthermore, the EU can share its expertise in urban planning, new technologies and education. Training may be worth more than money for the development of Africa.