Australia has been urged to rapidly take up investment opportunities in Africa beyond mining as trade war impacts see China snaring the lion’s share of growth across the dark continent at the expense of the United States particularly.
The plea was issued today by one of Australia’s most respected miners, Resolute Mining’s MD John Welborn, whose company has been operating for more than 20 years in Africa and has gold mining operations and/or projects in Mali, Ghana, and Senegal.
Speaking on the first day of the three day Africa Downunder mining conference in Perth, Welborn said Australia understood current economic stimulus initiatives in the US, China, South East Asia and Europe.
“However, we often do not recognise just how big Africa is and therefore have failed to recognise the growth and partnership opportunities there – opportunities now being snapped up by China,” Welborn said.
“The fundamentals tell the forward picture. The population demographics in Africa will be the largest in any area in the world between now and 2050. This is on the back of being a continent that has seen enormous change in recent years. Since 2000, half of the countries in the world with the highest annual growth rates have been in Africa.
“We are potentially missing what is happening around us. The Australian economy is focused on China and South East Asia and so is worried about China’s trade tensions with the US and emerging Pacific presence.
“Yet during the first 20 years of my life, Australia, both government and business, missed what was going on in Asia – and faces making the same mistake with Africa currently.
“The reality is that while we have historically been a partner to Africa, the Australian economy is not focused on what is happening and is going to happen in Africa’s population growth and economic stimulus yet.
“By 2050, one in every four humans in the world will be African and more than half of that African population by then will be middle and upper class.
“The explosion of middle class wealth in China is a key driver of the current Australian economy and we are facing a similar opportunity from the future explosion of middle class wealth in Africa.”
Welborn warned such growth dynamics needed to be considered against the current backdrop of global trade tensions.
“Ten years ago, China and the United States had equal levels of investment in Africa,” Welborn said.
“Now China is three times that of the US and it has moved the majority of that investment from mining to infrastructure, construction and finished goods – and that is the lesson for Australia.
“Mining is often a great opportunity to establish infrastructure links and that is exactly the opportunity China is grasping in Africa – at the expense of Australia and the US.
“This opportunity is not just being seized by the Chinese government, but increasingly by Chinese private enterprise and small business.
“Australian businesses and investors, supported by the Australian government, need to recognise this opportunity and join the African economic growth story – and do it now.”