by John Brian Shannon
“Nowadays, Africa’s economic potential – and the business opportunities that go with it – is widely acknowledged. Poverty and unemployment are still more widespread than in other emerging markets, but accelerating growth since 2000 has made Africa the world’s second-fastest-growing region (after emerging Asia and equal to the Middle East).”
The above chart is from the IMF which is noted for it’s careful and qualified assessments of developing nations and regions. Here is a small excerpt from their authoritative October report:
”Economic conditions in sub-Saharan Africa have remained generally robust despite a sluggish global economy. The near-term outlook for the region remains broadly positive, and growth is projected at 5¼ percent a year in 2012–13. Most low-income countries are projected to continue to grow strongly, supported by domestic demand, including from investment. The outlook is less favorable for many of the middle-income countries, especially South Africa, that are more closely linked to European markets and thus experience a more noticeable drag from the external environment. The main risks to the outlook are an intensification of financial stresses in the euro zone and a sharp fiscal adjustment in the US–the so called fiscal cliff.”
Mind you, not everything is trending upwards — some things are going downhill there too. Way down. Here is a nice chart to underscore that trend.
In its wide-ranging analysis of new developments in Africa, the new report notes that after ten years of high growth, an increasing number of countries are moving into ‘middle- income’ status, defined by the World Bank as those countries achieving more than $1,000 per capita income.
Of Africa’s 48 countries, 22 states with a combined population of 400 million people have officially achieved middle-income status; while another 10 countries representing another 200 million people today would reach middle-income status by 2025 if current growth trends continue or with some modest growth and stabilization.
“Africa is undergoing a period of unprecedented economic growth. According to The Economist, six of the ten fastest-growing countries in 2011 were in Africa. Average external debt on the continent has fallen from 63% of GDP in 2000 to 22.2% this year, while average inflation now stands at 8%, down from 15% in 2000. This positive trend is likely to persist, given that it is based on structural geographic and demographic factors, such as rising exports, improved trade conditions, and steadily increasing domestic consumption.”
The continent we call Africa, once an economic backwater is rapidly-transforming into an important partner of the world’s major economies, by providing much-needed raw resources and increasingly, agriculture is playing an important role there.
A major UN paper dated June 2011 remarked on the recent optimism felt by many world leaders, “The African Moment: On the Brink of a Development Breakthrough”
In the words of UN Secretary General Ban ki-Moon (2011:1) at the Summit of the African Union in January 2011: ‘Africa is on the move. The new narrative for Africa is a story of growth.’ And as Donald Kaberuka (2010:4), President of the African Development Bank, noted at the opening of the 2010 African Economic Conference, there is now ‘broad agreement that an unusually strong momentum has built up in the African economies over the last decade’. This change in perception does not mean that the immense challenges faced by the continent are being glossed over, but the Afro-pessimism of the 1990’s has clearly been replaced by a much more realistic and confident outlook. African people seem to share this view.
The answer to the question What’s up with Africa? Everything you want in a growing continent.
Please take the time to read the seminal articles that I have cited in this post. They will enrich your understanding of this coming-of-age continent.
- Africa’s Big Boom Jean-Michel Severino & Emilie Debled in Project Syndicate
- Inside Africa’s Consumer Revolution David Fine in Project Syndicate
- Sub-Saharan Africa Maintains Growth in an Uncertain World — International Monetary Fund (read the article here OR download the entire PDF report here)
- Despite Global Slowdown, African Economies Growing Strongly― New Oil, Gas, and Mineral Wealth an Opportunity for Inclusive Development — The World Bank
The African Moment: On the Brink of a Development Breakthrough – United Nations Development Programme – Regional Bureau for Africa (download the entire PDF report here)
- FDI flows into Africa to hit $31b in 2012 – World Bank (ghanabusinessnews.com)
- Ghana’s economy to be 5th fastest growing in sub-Saharan Africa in 2012 – World Bank (ghanabusinessnews.com)
- Western Companies See Big Money-Making Opportunities in Africa (atlantablackstar.com)
- Africa Continues Growth Despite Global Economic Woes (atlantablackstar.com)
- Africa’s economic growth miracle: ‘It’s the real thing’ (dailymaverick.co.za)
- Africa may be rising, but not as much as Walmart (guardian.co.uk)
- IMF Sees Continued Growth for China, Sub-Saharan Africa (voanews.com)
- Africa’s population challenge (globalpublicsquare.blogs.cnn.com)
JOHN BRIAN SHANNON
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