January 2014: African capitalism

OMFIF starts its fifth year with a focus on Africa, following the concentration last year on the twin subjects of China and the renminbi and the Lusophone economies of the world – abiding preoccupations that will accompany us this year too. Ultimately all of these facets of the international political economy are interlinked. We give pride of place to a book by Kingsley Chiedu Moghalu, deputy governor of the Central Bank of Nigeria. In Emerging Africa, Moghalu extols a particular brand of African entrepreneurial capitalism that he believes has the ability to build a world-beating business model. During the year we will be exploring in different ways how this model can be developed. David Kihangire, former Executive Director for Research at the Bank of Uganda who has recently taken up an assignment at the East African Community, argues in favour of African states establishing sovereign funds that are independent of state budgets. He makes this proposal in a review of the different ways that African nations can deal with windfall profits from oil and gas – an issue that was aired, too, at the OMFIF Main Meeting in Qatar in November, where we publish an extract from the summary of proceedings.

In Africa’s biggest oil-driven economy, Nigeria, Razia Khan looks at the difficult combination of political and economic circumstances confronting President Goodluck Jonathan. Ulrich Otto and Minesh Mashru survey the need for better conditions for financing African infrastructure. Elsewhere in emerging markets, Juzhong Zhuang and Changyong Rhee describe rising inequality in Asia. Anthony Robinson investigates the implications of the Euroasian rail link financed by China and other state-owned interests in Asia and the Middle East. Winston Moore outlines ambitious plans by the four-nation Pacific Alliance to extend Mexico’s trade and investment horizon southwards in partenership with resource-rich Andean nations. Steve Hanke comments that Venezuela seems to be descending into a Marxist economy, an experiment that only a precipitous decline in the oil price would end. Zeph Nhleko examines the economics of sovereign wealth funds in sub-Saharan Africa.

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