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here are discernible shifts in the global economy. We are now living in an economic world that analysts are describing as multipolar and increasingly driven by emerging markets. With favorable demographics, it is likely that emerging economies will continue to fuel future growth.

While we have long heard the economic success stories from emerging markets, including the rise of the BRIC countries (Brazil, Russia, India and China), we don’t hear much about changes taking place in Africa.

Africa is changing and changing fast. In recent times, several African states have seen their economies expand rapidly. The Economist reported that from 2000 to 2010 six out of the 10 fastest-growing economies in the world were, in fact, from Sub-Saharan Africa.

And, importantly this rapid growth is happening amid greater political stability and democratization. Endowed with rich natural resources, investments in Africa have focused mainly on the extraction of minerals. But even that is changing as a small but growing middle class with disposable income emerges. As a result, demand for consumer goods and services has increased.

Businesses used to talk about the high costs, onerous regulations, and lack of infrastructure that deterred them from investing in Africa. That is also beginning to change. We even have champion reformers such as Rwanda, a country that wants to become the Singapore of Africa.

There are still many obstacles businesses are likely to face, but there are also huge opportunities and returns on investments are much higher.

It is not unusual these days to see Indonesian products in the supermarkets and department stores of Tanzania, South Africa, Kenya and elsewhere. Export products from Indonesia include food and beverages, garments and footwear, to name a few. Although it is on the rise, the volume of trade between Indonesia and Africa is still relatively small.

On the whole, the share of trade between Africa and developing countries is increasing rapidly and this trend is likely to continue. For example, according to McKinsey — a global consulting firm — from 1990 to 2008, Asia’s share of African trade doubled to 28 percent. On the other hand, Western Europe’s portion shrank from 51 percent to 28 percent.

According to China’s Xinhua news agency, bilateral trade between China and Africa increased from US$10.6 billion in 2000 to $160 billion in 2010. With 2,000 Chinese enterprises already operating in Africa, the cumulative Chinese investment in Africa currently amounts to over $40 billion.

Trade will continue to be an important source for fueling growth, but direct investments can get companies a good foothold and contribute to even larger trade volumes between Africa and its trading partners.

Traditionally, Indonesian companies have been more inward looking. With a large domestic market, perhaps there is very little incentive for them to invest abroad. There are few large global companies in Indonesia that see their operations transcending national boundaries.

For smaller companies, though, I believe it has more to do with a smaller diaspora of Indonesians living abroad. Diasporas can form networks and serve as informal business exchanges between their adopted homes and country of origin.

For example, ethnic Indians living in eastern Africa and the business links they have in India is a case in point. Proximity can be an issue as well, but with lower transportation costs and better technology, this is no longer a barrier these days.

The question, therefore, is whether now is the time for Indonesian firms to establish a bigger footprint in Africa?

First, businesses can expect higher returns and the market size in Africa is also growing. According to a World Bank estimate in 2010, Africa’s middle class had already grown to 313 million people. This equals
34 percent of the total population and it is expected that this percentage will increase.

Second, in our globalized world, firms need to have geographically diversified markets. The financial meltdown of 2008 amply demonstrated the vulnerability of export-driven growth that primarily targets industrialized countries.

Third, businesses from Asia bring experience from developing markets. This enables them to respond better to local market needs and establish a stronger presence.

Looking at this from a broader development perspective, I think everyone benefits. Africa needs such investment. Firms will bring the technologies and management practices that are more appropriate for Africa.

For example, Indonesian companies have learned to work in a market where many of their customers come from low-income households but are sophisticated consumers and demand value for money.

Indonesian companies can also bring experience in agro-processing and low-end manufacturing, which are two niche areas for African economies at this stage of their development.

Development in these key sectors can steer structural transformation in Africa. The experience of firms serving in Indonesia that also went through similar structural changes in the 1980s and 1990s would be very useful.

South-South Cooperation — a term increasingly being used to describe cooperation among developing countries — will be a key factor in determining the decoupling of emerging economies and their over-dependence on industrialized countries. In the immediate aftermath of the “Great Recession”, we saw the risks of over-reliance on a few export destinations in the West.

Many emerging markets are now trying to spur domestic demand and searching for new markets. It is in this regard that public policy in Indonesia can play a crucial role in educating and encouraging local business to explore potential investments in Africa.

It will be good for the balance sheets of firms, good for the economy, and surely yield good development dividends for both Indonesia and Africa.

The writer is a development economist who has worked in Asia and Africa. The views expressed here are personal.