“It was the best of times, it was the worst of times,” reads the familiar opener of English author Charles Dickens’ A Tale of Two Cities. A reflection on the somber state of affairs in Victorian-era London, Dickens’ legendary adage has taken on an almost eerie significance in the current global political economy, where a worldwide free-fall in demand for major commodities, namely crude oil, has left many of the world’s most promising emerging economies reeling in its wake.
The recent slowdown in China’s $9 trillion economic machine has brought with it a host of consequences for several of the Asian giant’s key trading partners. Africa’s twin titans of energy, Nigeria and South Africa, have found themselves especially disrupted, with South Africa’s rand having become the poster child for currency manipulation on the part of wily investors fed up with President Zuma’s complete disregard for fiscal responsibility (Late last year, President Zuma pulled off the impressive feat of cycling through three finance ministers in less than a week.)
In Nigeria, China’s slowdown equals not just a critical shortcoming for its most prized export, yet also a slew of delays on more than 40 critical infrastructure projects believed to be backed by the Chinese government.
Geopolitical developments have not been kind to West Africa’s champion either. Typically buttressed by Saudi Arabia’s willingness to forgo cutthroat oil prices in favor of preserving its influence over the Organization of Petroleum Exporting Countries, essentially the high-roller table for oil-exporting states, Nigeria has found itself one of several unwitting victims of a nasty trade conflict between Riyadh and Tehran, a proxy war between two nations which increasingly see themselves as sole religious arbiter of the Islamic world.
And despite the collapse of its crude oil trading floor, currently trading in the neighborhood of $45 a barrel, Nigeria’s Central Bank moved to restrict supply of naira on international forex markets, triggering a mass selloff of Nigerian assets late last year.
Despite months of financial misfortune, however, hard times seemed to have sparked collective reflection amongst Africa’s economic elite.
Over the past few months, an aggressive marketing campaign on the part of South Africa’s Finance Ministry has yielded a record skyrocketing in the price of South African corn futures, both strengthening the rand and signaling a potential new avenue down which Johannesburg might venture in the coming months. (A future is a financial agreement which compels a potential buyer to purchase an asset at a fixed, predetermined price -- essentially a betting mechanism for maverick investors.)
Economic stagnation in the United States and other mature economies has led major government agencies such as the U.S. Department of State to extend their arms to talented African entrepreneurs in critical sectors.
In less than three weeks, State’s Bureau of African Affairs plans to present its “Lions,” a group of award-winning African innovators, to some of the most powerful names in Silicon Valley and beyond. The City of New York has also moved into the market for top African business talent, having launched its ambitious IN2NYC initiative, which aims to bring upwards of 20 African entrepreneurs to the Big Apple to help cement the city as a hotbed for entrepreneurial talent rivaling Silicon Valley itself. Might innovation be the way?