Africa is the world’s richest continent and may soon be the next superpower. It has been home to some of the world’s oldest civilisations and today has some of the fastest growing economies in the world. Africa’s Economic Growth is predicted to increase as from 2017, 2018, 2019 up to the year 2050.
This vibrant, vast continent that is home to very diverse economies has growth potential that is unimaginable. This article covers 23 current facts about Africa’s Economic Growth that will change your perception of the world’s richest continent.
23 Positive Facts about Africa’s Economic Growth:
Here are 23 positive and current facts about Africa’s Economic Growth. These will possibly change your perception of the world’s richest continent and give you a reason to invest in one of her countries.
- Over 25% of the world’s languages are spoken only in Africa
- Africa is Possibly the world’s Next Superpower:
- Africa needs ‘connectors’
- World’s largest free trade area
- Africa is investing less in the outside world
- Africa has an Educated Workforce
- Young African Population
- Intra-African trade holds enormous potential
- Nigeria and South Africa make up almost half of Africa’s GDP
- Accelerated Job Creation
- Largest labour force in the world
- East Africa is the continent’s fastest-growing region
- Potential to become the world’s bread basket
- Customers are changing
- Morocco is the top intra-African investor
- Mobile Phone Connectivity
- A Continental Digital transformation is Happening
- Africa has around 30% of the earth’s remaining mineral resources
- Africa is diversifying
- Rapid Economic Growth
- Africa can lead in sustainable development
- Highest proportion of entrepreneurs in world
- Africa is becoming safer and more democratic
Kings of Africa’s Economy | Eric Osiakwan | TEDxBerkeleyTo dispel the notion that all Africa has to offer the world is natural resources, #EricOsiakwan has helped set up high-tech infrastructure and businesses in 32 countries across Africa over last 15 years. Click To Tweet
Eric Osiakwan is trying to dispel the notion that all Africa has to offer the world is natural resources. To that end, he has helped set up high-tech infrastructure and businesses in 32 countries across Africa over last decade and a half.
He believes that the continent is poised to be the epicenter of a new tech business boom, with mobile devices at the forefront. Eric Osiakwan, Managing Partner of Chanzo Capital is an Entrepreneur and Investor with 15 years of ICT industry leadership across Africa and the world.
This talk was given at a TEDx event using the TED conference format but independently organized by a local community.
COVID-19 May Greatly Reduce Africa’s GDP Growth
As of March 31, more than 720,000 cases of COVID-19 had been recorded worldwide, with nearly 40,000 deaths. The number of cases, and deaths, has been growing exponentially.
Compared to other regions, the number of recorded cases in Africa is still relatively small, totaling about 5,300 cases across 47 African countries as of March 31.
?? Can South Africa’s health system cope with coronavirus?
Against the backdrop of this worrying public-health situation, African countries will have to address three major economic challenges in the coming weeks and months:
- The impact of the global pandemic on African economies. This includes disruption in global supply chains exposed to inputs from Asia, Europe, and the Middle East, as well as lower demand in global markets for a wide range of African exports. Moreover, Africa is likely to experience delayed or reduced foreign direct investment (FDI) as partners from other continents redirect capital locally.
- The economic impact of the spread of the virus within Africa, and of the measures that governments are taking to stem the pandemic. Travel bans and lockdowns are not only limiting the movement of people across borders and within countries, but also disrupting ways of working for many individuals, businesses, and government agencies.
- The collapse of the oil price, driven by geopolitics as well as reduced demand in light of the pandemic. In the month of March 2020, oil prices fell by approximately 50 percent. For net oil-exporting countries, this will result in increased liquidity issues, lost tax revenues, and currency pressure. (We should note, however, that lower oil prices will potentially have a positive economic impact for oil-importing countries and consumers.)
Breakdown and Reference to each Fact about Africa’s Economic Growth:Agriculture is 11 times more effective at reducing poverty. Investment in Agriculture can lift 85 million people out of extreme poverty by 2024, provide jobs and boost the continent’s economy. Click To Tweet
25% + of the world’s languages:
Over 25% of the world’s languages are spoken in Africa. There are thought to be around 2,000 languages in use on the continent.
All are considered official languages of the African Union. Nigeria alone has over 500 living languages.Over 25% of the world’s languages are spoken in Africa. There are thought to be around 2,000 languages in use on the continent. Nigeria alone has over 500 living languages. Click To Tweet
Africa’s steadily improving situation with regard to governance.
However, there are still many problems, but steadily less war, steadily more free elections, and so on.
Steadily, the technological landscape and future that will allow Africa to leapfrog many aspects of the rich life that the rich world takes for granted is improving.
National resources are just icing on the cake.
Africa needs ‘connectors’:
Missing across much of sub-Saharan Africa are the roads, rails, ports, airports, power grids and IT backbone needed to lift African economies.
This lack of infrastructure hinders the growth of imports, exports, and regional business. CHINA’S BELT AND ROAD INITIATIVE: Will it have a positive impact on African countries?
Africa could soon be home to the world’s largest free trade area:
In 2015 negotiations were launched between African Union heads of state regarding establishing the CFTA. Also called the Continental Free Trade Area (CFTA) – it consists of all 54 African countries.
The plan is for it to be implemented beginning October 2017. If successful, it will become the world’s largest free trade area by number of countries.African Union heads of state plan to establish a Continental Free Trade Area, consists of all 54 African countries. If successful, it will be the world’s largest free trade area by number of countries. Click To Tweet
Lesser Investments in the outside world:
Africa’s foreign direct investment (FDI) flows to the rest of the world declined in 2016, reversing a trend seen over the last few years.
The continent’s largest investor abroad, South Africa, saw its outflows drop by a whopping 30% and 58% in 2015 and 2016 respectively.
Nigeria’s investment outside of the continent has also been in decline since 2015.Africa’s foreign direct investment (FDI) flows to the rest of the world declined in 2016, reversing a trend seen over the last few years. Click To Tweet
Africa has an Educated Workforce:
Today 40 per cent of Africans have some secondary or tertiary education. By 2020, it will be nearly half.
But African countries still need further progress to remain economically competitive.
Young African Population:
Over 50% of Africans are under the age of 20, compared to a global median age of 30.
Africa has the world’s highest child-dependency ratio – with 73 children under the age of 15 for every 100 people of working age.
That’s nearly double the global average.Africa has the world's highest child-dependency ratio – with 73 children under the age of 15 for every 100 people of working age. That's nearly double the global average. Click To Tweet
Intra-African trade holds enormous potential for Africa’s Economic Growth:
With the 54-nation Continental Free Trade Area – Africa’s own mega-trade deal – even the smallest African economies could see a lift.With a possible 54-nation Continental Free Trade Area, Intra-African trade holds enormous potential for Africa’s Economic Growth. Click To Tweet
Nigeria and South Africa make up almost half of Africa’s GDP:
Estimates place Africa’s growth at 2.2% in 2016, which is down from 3.4% the previous year.
As a result, this slowdown can, in part, be attributed to the poor performance of two heavyweight countries.
According to the report, Nigeria and South Africa account for nearly 50% of the continent’s GDP (at 29.3% and 19.1% respectively).
Africa’s Economic Growth Accelerates Job Creation:
With a few reforms, massive job growth is within Africa’s reach.
The experience of other emerging economies shows that Africa could accelerate its creation of stable jobs dramatically.
When they were at a similar stage of development as Africa today, Thailand, South Korea and Brazil generated jobs at double or triple the rate of Africa’s.
Largest labour force in the world:
Africa’s population growth comes along with Human Resource.
By 2035, Africa’s labour force will be bigger than that of any individual country in the world and will more than double to 2.3 billion people by 2050.
As expected, Nigeria’s population is expected to rise from 174 million to 440 million people. 40% of the global population will be African by the year 2100, up from 9% back in 1950.
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East Africa is the continent’s fastest-growing region:
East Africa’s economy expanded by 5.3% last year.
Although this is slower than the previous year’s 6.5%, it is still by far the fastest-growing region in Africa.
Ethiopia, which grew by 8%, was the leading country in the region, while Kenya, Rwanda, Tanzania and Djibouti all managed growth rates above 6% in 2016.
Potential to become the world’s bread basket:
Africa has about 60 per cent of the world’s unused cropland.
This provides it with a golden opportunity to simultaneously develop its agricultural sector and reduce unemployment.
On current trends, African agriculture is on course to create 8 million wage-paying jobs between now and 2020.70% of Africans make a living from agriculture but it accounts for just 33% of the continents GDP. Click To Tweet
Customers are changing:
Nevertheless, with the growth of Africa’s middle class, we’re seeing development of new expectations.
Educated, urban professionals are young, brand-aware and sophisticated in terms of their consumption.If African governments invested in Agriculture, they could help lift 85 million people out of extreme poverty by 2024, provide jobs and boost the continent’s economy. Click To Tweet
Morocco is the top intra-African investor:
Morocco leads cross-border capital investment in the continent, with about $8bn announced for 2015-2016.
Additionally, Ethiopia was a major recipient of this, which the report notes is due to an agreement between a Moroccan phosphate producer, Office Chérifien des Phosphates Group, and the Ethiopian government to invest over $3bn in a fertiliser factory.
Mobile Phone Connectivity:
More than half of the world’s mobile money accounts are in Africa.
12% of African adults have access to one, compared to just 2% worldwide. In Kenya the figure stands at 58%.
More that 80% of Africans currently access the internet through mobile phones. At first, most websites were not optimised for phones and were relatively slow.
Right now, almost every website is responsive and website hosting companies like siteground are currently offering custom made mobile hosting.
Across the continent only a third of adults have access to a traditional bank account.
Africa leads the world in mobile adoption, which continues to offer the biggest cross-sectoral economic opportunities.
Mobile payment networks, like mpesa pioneered in East Africa, opened the wired, global economy to poor, unbanked city and rural dwellers.
Natural Resources – Africa has around 30% of the earth’s remaining mineral resources:
This includes over 40% of gold reserves and 90% of platinum reserves.
Nigeria is the world’s fifth largest exporter of oil, ahead of Iraq and Kuwait, according to the CIA World Factbook.
Africa is diversifying:
African economies are finally beginning to diversify beyond commodities, though this is still in the early stages.
Africa is seeing a returning diaspora that recognises the potential and opportunities in their own countries.
Rapid Economic Growth:
Africa’s Economic Growth has been the second-fastest-growing in the world.
Happening over the past 10 years, with average annual growth of 5.1 per cent over the past decade, driven by greater political stability and economic reforms that have unleashed the private sector in many countries.
Africa can lead in sustainable development:
In energy, technology, supply chain design and other areas, Africa has the ability to look at what works elsewhere then fashion its own answers.
It can openly embrace new technology and ideas, with no historical imprint from which to break free.
Highest proportion of entrepreneurs in world:
Polls suggest that 80% of Africans view entrepreneurship as a “good career opportunity”, and the continent has the highest proportion of adults who are starting or running new businesses.
However, the report noted that these entrepreneurs tend to operate in sectors where productivity remains low.Polls suggest that 80% of Africans view entrepreneurship as a good career opportunity, and the continent has the highest proportion of adults who are starting or running new businesses. Click To Tweet
Africa is becoming safer and more democratic:
Africa is actually safer than ever. We live in a much more peaceful and inclusive state than we did just 50 years ago during colonialism.
To really understand how Africa is changing, you have to look at the big picture.
People are speaking up more, literacy levels are increasing and people are more aware about their rights.
Africa’s Economic Growth is a global Priority:
Africa’s sustainable economic and social transformation is a global priority.
By 2035, Africa’s labour force will be bigger than that of any individual country in the world.
Africa has about 60 per cent of the world’s unused cropland, which means it has potential to feed everyone on earth.
The economy of Africa consists of the trade, industry, agriculture, and human resource.
As of 2012, approximately 1.3 billion people were living in 54 different countries in Africa.
Predictions on Africa’s Economic Growth:
The World Bank predicts slightly higher growth in Africa’s economy, in spite of an a slow growth prediction in 2016 as the rest of the world’s for the first time in 16 years.
Non-resource-intensive economies such as Kenya, Rwanda, Uganda, and several in the West African Economic and Monetary Union, including Benin and Côte d’Ivoire recorded solid economic growth in 2018.
The greater economies such as Nigeria and South Africa will play a huge role in Africa’s Economic Growth.
“These large economies are at risk of a lost decade unless policymakers implement significant reforms to shift the growth model away from excessive reliance on oil in Angola and Nigeria and, in the case of South Africa, to overcome structural problems—many inherited from the apartheid era.”
The African economy in 2019
Africa’s economic growth in 2018 will continue in 2019 in sub-Saharan Africa, averaging 3.6% over the next two years, according to World Bank estimates.
An economic upturn, despite uneven variations between different countries on the continent.
This is reflected in the findings of the 2018 study conducted by the World Bank. The institution forecasts economic growth of 3.6% over the next two years.
Challenges Facing Africa’s Economic Growth:
However, many challenges remain. Public debt levels and debt risk are rising, which might jeopardize debt sustainability in some countries.
In other words, the availability of good jobs has not kept pace with the number of entrants in the labor force; fragility is costing the subcontinent a half of a percentage point of growth per year; and poverty is widespread.
Most importantly, It will remain insufficient to reduce poverty significantly. All the while, increase in growth is expected to through 2019.
Also, a marginal decline of total poverty headcount at the international poverty line ($1.90/day in 2011 PPP) is projected.
Africa’s Economic Growth may be threatened:
Africa’s Economic Growth may be threatened —regardless of size or growth rate— as warned by both the World Bank and Brookings. Leaders should pay more attention to debt management.Most Africans make their living from agriculture – but not in a way that helps economies grow because not enough African governments are investing in agriculture programs. Click To Tweet
Above all, tighter monetary policies introduced in advanced economies over the coming months, like Lagarde, Brookings believes. This will have an impact on African economies with both unfavourable foreign exchange rates and existing and future debt becoming more expensive.
While the OECD average tax revenue to GDP ratio is 24%, Africa’s at 15%. Domination of the region’s economies by the informal sector, explains the low rate—and it also means there’s still plenty of room to grow.If African governments invested in Agriculture, they could help lift 85 million people out of extreme poverty by 2024, provide jobs and boost the continent’s economy. Click To Tweet
Statistics and Data supporting Africa’s Economic Growth:
Subsequently, most of 2018’s top performers are non-commodity intensive economies.
Ghana (8.3%) leads this list. Which we should point out is boosted by oil & gas expansion. Next, Ethiopia follows at (8.2%). Then Côte d’Ivoire (7.2%), Djibouti (7%), Senegal (6.9%) and lastly, Tanzania (6.8%).
Furthermore, Africa has six of the world’s ten fastest growing economies. That data is from this year, according to the World Bank. These all add on to Africa’s Economic Growth.
Ultimately, as Brookings points out (pdf) in its Foresight Africa 2018 report, half of sub Saharan Africa’s economies will grow at a rate similar to or higher than during the heyday of the “Africa rising” narrative, which was in the run-up to the commodity price crash of 2014.
For instance, the region’s growth is higher, at 5%, if you exclude the big three economies of Nigeria, Angola, and South Africa.
In conclusion, Africa’s Economic Growth is definitely increasing and it is time to invest.
Africa COVID-19 | Economic impact of coronavirus outbreak
We take a look at the regions in Africa where tech innovation is thriving:
Recommended Reading on Africa’s Economic Growth:
- PDF Fast Facts: Sub-Saharan Africa: Data and Facts – Berlin Institute for Population and Development
- VIDEO: COVID-19 Will Greatly Reduce Africa’s GDP Growth
- PDF Download: African Economic Outlook 2020 – Developing Africa’s workforce for the future- Africa Development Bank Group
- 3 Facts that reveal Africa’s huge agriculture potential – MALAKA GHARIB – One.org
- Ethiopia is now Africa’s fastest growing economy
- African economies will outperform global growth in 2020 despite a lag from its biggest countries
- The state of African economies: Insights from the IMF and World Bank Spring Meetings
- Department of Economic and Social Affairs – World Economic Situation and Prospects
- What’s driving Africa’s growth – McKinsey & Company
- How Africa can secure its long-term economic growth
- Growth in Sub-Saharan Africa is projected to rise – World Bank Africa