Global crisis will affect SA more than its neighbours

Although there are distinct
signs of another global
crisis developing, the
impact is likely to be on the
developed nations, and with
only a limited effect on sub-
Saharan Africa, according
to Duncan Bonnett of trade
consultants, Whitehouse &
Associates.
With the eurozone
teetering under a debt crisis
in Greece, and other nations
like Spain, Portugal, Italy
and Ireland edging towards
a similar state – and the
mighty US economy just
having forestalled its own
debt crisis – the developed
world is in a shaky state.
“We are obviously
looking at a similar
situation to 2008 – even
worse,” Bonnett told FTW.
But he suggested that
the African countries are
likely to keep growing at
their current rate, with their
economies unattached to the
global situation.
“So I still see a 5%
growth rate for most
African economies
continuing,” Bonnett added.
He sees gold being looked
upon as a safe haven, and
prices surging ahead as a
result of the financial crisis.
But other commodities, like
minerals, are not seen in the
same light, and prices could
slip a bit.
“In 2008, what we
saw was a lot of the
mineral exploration and
development being driven
by mid-tier independents,
which are reliant on
borrowed cash,” Bonnett
said. “And if investors are
suddenly gun-shy, these
outfits will not be able
to keep developing their
projects.
“I expect we’ll look at a
similar situation this time.
But commodities have much
stronger prices than before,
so the effect will be less
severe.
“Also, although a slowdown
in the developed
countries would see an
accompanying slow-down
in China – a major buyer
of African commodities
– it would only be a small
bit slower, so African
economies won’t collapse.
And they are much more
robust economies than they
have been in the past.”
Bonnett also noted
that the oil price hadn’t
dropped as much as it
used to when there was an
international crisis.
“Even under the present
situation, the price is still
in a comfort level, and the
African oil suppliers won’t
suffer,” he said.
But he is less optimistic
about chances for this
country.
“SA is much more linked
into the US and European
economies,” he said. “The
luxury goods we export,
like wines and fruit, will
be impacted. So we’ll
suffer more than the likes
of Zambia, Angola and
Zimbabwe would.”