So much bad news makes many recall Carlyle's view of economics as 'the dismal science'. But there is some good news out there.
Africa has really had the worst deal in the second half of the last century. Real incomes actually fell in some parts of Africa from the 1980's to the early 2000's. But now Africa is growing and there are several reasons for hope.
China's demand for raw materials has pushed up the price of commodities, improving Africa's terms of trade considerably. This has already raised the real incomes of countries which export these minerals, rising living standards. Africa has large reserves of these commodities and is benefiting from international investment to expand capacity, especially from China, which sees the chance of both influence and cheaper supplies.
Now there is news of an ambitious plan to expand the production of renewable energy from North Africa. The energy produced will be used locally and exported to Europe. Northern Europe isn't a great place to produce solar power efficiently, but North Africa is.
One problem that particularly holds Africa back is the lack of domestic saving due to the very low real incomes of the population. Saving is needed to provide the investment funds required for growth. With the funds coming from Europe, a process known as Foreign Direct Investment (FDI), Africa can grow more quickly.
The benefit to Africa comes in two ways.
1. They get a better energy infrastructure which will allow them to build other industries and provide power to their own population raising the standard of living.
2. There will also be the multiplier effects on local economies as the investment in the infrastructure takes place. Local incomes will rise improving employment and so reducing poverty.
For Europe this also helps to reduce the use of damaging fossil fuels in energy production and so aids the efforts to mitigate climate change.
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