As attendees looked at whether the increasingly robust economic growth in Africa is sustainable, Roubini talked about growth determinants, stressing the progress that the region has made and problems that remain:
“I would say that the point that Larry Summers made this morning about what are the determinants of long-term economic growth are important and valid. He spoke about the need for peace and no civil war; the need for education; the need for a fair use of natural resources; about having good governance; about using technology… And I would add as a sixth factor that determines long-term economic growth the demographic dividend; high population growth may be also beneficial. Now in all of these dimensions there 54 countries of Africa, probably now 55 with South Sudan, have made significant improvement compared to what was the situation two or three decades ago. So if you look at it in relative terms historically, certainly everything has improved. And that is why economic growth is stronger. But if you are thinking about it absolutely, what is happening across these dimensions thing are not that simple.”
In the panel discussion on black swans, Roubini confessed optimism over the region and recent changes, but said downside risks remain, noting a key risk scenario:
“A potentially a toxic nexus between on one side global climate change effects on Africa, and unfair use of natural resources that is occurring in this part of the world; and the interaction between these two things leading to social and political instability.”
Watch Roubini’s address and panel discussion below.