Africa faces windfall gains, competition from Asia: OECD

(Kyodo) _ Africa has been enjoying windfall gains from surging commodity prices partly caused by growing demand in China, while facing increased competition from Asian economies in exporting such items as textiles and coffee, an Organization for Economic Cooperation and Development economist said Wednesday.
Kiichiro Fukasaku, counselor at the OECD Development Center, told reporters in Tokyo that Africa is currently experiencing the best economic performance in eight years, with aggregate 5.1 percent growth estimated for 2004, due partly to soaring oil and metals prices and the discovery of new oil fields.

China's demand for African exports of oil and metals, including copper and aluminum, benefited such countries as Mozambique, Ghana, Zambia and Cameroon, while the new oil fields in Angola, Chad and Equatorial Guinea gave a boost to oil exporters, he noted.

The growth of African economies is expected to continue at a lower rate of 4.7 percent in 2005 and 2006 as the effects of new oil fields end, but countries in the continent are confronted with risks such as a possible slowdown of the global economy triggered by U.S. trade and fiscal deficits and China's red-hot economy, he said.

"China has contributed to African economic growth as a major buyer of crude oil and minerals, but it is also an African rival in terms of textile exports," Fukasaku said.

The senior OECD official said coffee producers could also face severe competition from Asian countries such as Vietnam.

Fukasaku made the remarks in line with the OECD's latest report on Africa. The fourth annual African Economic Outlook compiled by the Paris-based organization and the African Development Bank covered 29 countries, which account for 85 percent of Africa's population and 90 percent of its combined gross domestic product.

A summary of the report said textile exporters such as Mauritius, Madagascar and Lesotho will face intensified competition from Asian countries, especially China, following the removal of quota restrictions on trade in textiles and clothing from the beginning of 2005 under the World Trade Organization.

"African exports are specifically vulnerable since they are concentrated in the U.S. and EU markets," the summary said.

Fukasaku appreciated Japan's proposal to help enhance African competitiveness through such measures as improving market access and strengthening local small businesses in the private sector and sought further assistance from the country.

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