Africa's future could lie with micro-finance

My seasoned and accomplished contact who operates in the highest echelons of the multinational world reports attending a number of gatherings of economists over the past few weeks.

He says they are all, without exception, pessimistic. He’s not entirely convinced they are right. And nor am I.

Last night I attended a session with a number of business leaders who operate on the African continent, where even the pessimistic economists predict 3 per cent growth.

The intriguing thing about Africa is that economically it faces an aid reduction catastrophe and an investment opportunity. Some talk of a reduction of $500bn in the coming year.

I spoke with a venture capitalist who says many people are re-reading Schumacher’s Small Is Beautiful, a theory that links people, land and community, developing the local economy.

Interestingly, this chimes with DFID’s (Britain’s aid department) pre-crunch shift from major aid bundles to targeted small business investment.

By chance yesterday morning I attended a breakfast to listen Dambisa Moyo talk about her book Dead Aid. Moyo argues aid is throttling Africa. It has had 60 years to develop the continent and has so far failed. She too thinks the future lies in micro-finance and micro-investment.

Strangely, I detect a whiff of confidence in the air, at least when it comes to Africa. As to the rest, all we can be certain of is that there is not an economist alive who knows.