You are on page 1of 10

Vision Statement: Seven Reasons Why Africas Time Is Now

Africas economy is growing faster than the economies of all other continents. About a third of the 54 African countries are seeing annual GDP growth of more than 6%. But this isnt just about diamonds and oil: Only 24% of the growth from 2000 to 2008 was attributable to natural resources. Whats making this diverse and complex continent boom? Here are some surprising facts about Africas $2 trillion economy. by Jonathan Berman. 1 IT'S A HUGE MARKET OPPORTUNITY. The to-scale map at right shows just how massive Africa is. It has 52 cities with populations of one million or morethe same number western Europe has. The percentage of people living in cities is higher than in India and will reach 50% by 2030. Africas middle class is also bigger than Indias, and by 2020 half of African households will have discretionary spending power. Africa needs everythinginfrastructure, education, health care, consumer goods, and retail and can pay for it.


Debt and inflation have decreased significantly over the past decade, because governments across Africa are now widely aligned with market economics. The number of political coups has declined precipitously since 1990. Though moving at different paces across the continent, political reform is under way, as shown by the Polity IV Index (a 21-point democracy rating in which hereditary monarchies score a -10 and consolidated democracies a +10).


3 INTRA-AFRICAN TRADE IS IN ITS INFANCY. Just 11% of Africas trade takes place within its own borders, the lowest of any region. Politics and resource constraints in Africa have kept the continent fractured, but a new crop of competitive pan-African companies and leaders are changing that equation. Increasingly skilled trade ministers and corporate executives are promoting free trade across and within Africas five major trade blocs.

4 IT WILL SOON HAVE THE WORLD'S LARGEST WORKFORCE. The African workforce will swell by 163 million in this decade; by 2035 it will be bigger than Chinas. By 2050, Africans will account for 25% of the worlds workers. Whats more, those workers will be supporting fewer dependents than their peers elsewhere in the world will. However, deep investments in productivity improvements will be needed to ensure broadbased growth in the region.

20% OF GOVERNMENT SPENDING GOES TO EDUCATION Thats nearly twice what OECD governments spend (11%), on average. Primary school enrollment reached 76% in 2008, up 14 points in a decade. Secondary school enrollment is still low, 35%, but it, too, grew, by 10 points. Achievement levels have not yet caught up to spending, though there are some success storiesmath and science students in Ghana and Tunisia were among the worlds most improved in the 2000s. Education is the crucial factor that will determine whether the rapidly expanding workforce is a boon or a bane.


MOBILE PENETRATION The mobile industry employed 3.6 million full-time workers directly and indirectly in Africa in 2010, according to GSMA. Mobile penetration, which was 2% in 2000, is 78% today and will reach 84% by 2015. Operators across the continent reduced prices by 18%, on average, in 2011. Mobile internet traffic in sub-Saharan Africa will grow 25-fold in the next four years. Companies will need to meet the African consumer on her feature (nonsmart) phone. Smartphones are only 3% of the African market today and will be just 15% in 2015.


7 IT CONTAINS MOST OF THE WORLD'S UNCULTIVATED CROPLAND Natural resources arent the whole story, but theyre a catalyst. With 60% of the worlds potential farmland, Africa could become an agricultural powerhouse. It is also rich in oil and gas; finds in Mozambique, Tanzania, and Uganda alone are expected to attract more than $40 billion in foreign investment. But companies that pursue pure extraction cant sustain support in Africa. Those that build local supply chains, hire local people, and produce for the local market are more likely to win the day.