The World Economic Forum on Africa has is being held at the Cape Town International Convention Centre from June 10th to 12th 2009. The Sessions are a global talk shop designed to plot the way forward for the African economies. The Forum is co-chaired by the Industrial and Commercial Bank of China (ICBC), the World Bank and the UAE's Dubai Group. With a global forum like this the major stakeholders are apparent. Kofi Annan was there co-chairing for the World Economic Forum itself. The conference posited that in the global downturn Africa was well placed to thrive. There were a few reasons for this.
- Partial decoupling
- In South Africa the NCA
- Africa still growing
Jiang Jianqing Chairman of the board of the ICBC explained in his opening remarks that his bank has more than 60 projects in Africa and that the money is available. He dismissed notions of neo-colonialism saying that China and Africa had a shared history of being colonised and that as over the last thirty years China the sleeping dragon has stirred and become strong again, so Africa over the next 30 years will awake and also become strong again. This sentiment was continued at the forum with the idea that Africa will awake and become the engine of growth for the world as it pulls itself out of the derived financial crisis.
The financial crisis was in a large part caused by risk being diversified through rather than across asset classes. In other words bundling homeloans together was an inherently risky practise, and it doesn't matter if it was five different types of eggs if they were all in the same basket. With risk allegedly diversified risky lending practises were rife. In South Africa the National Credit Act was introduced to put the brakes on risky lending, and has contributed to us being in less of a risky position come credit crunch time. Africa as a whole was less exposed to derivative financial products and as such is now in a position to bounce back and lead the world's economic recovery.