(Editor’s note: This post originally appeared on the website of Ashoka Changemakers.)
Africa’s lions are on the prowl, hails McKinsey Global Institute (MGI). They’re not referring to our fuzzy feline friends, but to the progress and potential of African economies based on productivity, competitiveness, consumer demand, and demographics.
“Today, while Asia’s tiger economies continue to expand rapidly, we foresee the potential rise of economic lions in Africa’s future.”
Among the key findings in the MGI report are that Africa’s growth acceleration has been widespread, with nearly every one of its largest economies having rapidly expanded since 2000. Africa has gained greater access to international capital which dictates that its future economic growth will be supported by increasing ties to the global economy, as well as creating new, substantial business opportunities in overlooked sectors — like retailing, banking, telecommunications, and agriculture. Another huge boost for The Lions is that the current return on foreign investment in Africa is higher than in any other developing region. This has been driving investment in these budding economies. Investors are creating markets, building brands, and establishing long-term relationships with African businesses, particularly in urban settings.
How do the numbers break down? Well…
- $1.6 trillion – Africa’s collective GDP in 2008, roughly equal to Brazil’s or Russia’s
- $860 billion – Africa’s combined consumer spending in 2008
- 316 million – the number of new mobile phone subscribers signed up in Africa since 2000
- 60% – Africa’s share of the world’s total amount of uncultivated, arable land
- 52 – the number of African cities with more than 1 million people each
- 20 – the number of African companies with revenues of at least $3 billion
- $2.6 trillion – Africa’s collective GDP in 2020
- $1.4 trillion – Africa’s consumer spending in 2020
- 1.1 billion – the number of African households with discretionary income in 2020
- 50% – the portion of Africans living in cities by 2030
While Africa’s lion economies have begun to fly out of the savanna and into mainstream global markets, just one country has taken full advantage of early entry.
China gets it. Over the past two years, China has given more loans to developing countries than the World Bank. A significant percentage (14%) of this outward investment is directed at sub-Saharan Africa. In 2010, the value of China’s import and export trade with Africa totaled over $120 billion.This growing influx of Chinese businesses has not only lead to economic opportunity, but also corruption, leaving many Africans wondering whether China is making their lunch or eating it. But in spite of a few unstable business relationships, Africa’s economies have staying power, offering both compelling investment opportunities and eager consumers.
Africa is ready to build vibrant global economies and it’s about time we opened our eyes and realized it. Africa and Asia–carried by its robust dragon and tiger economies–are the only continents to grow during the recent global recession. Telling … and all the more surprising given the widespread poverty, disease, famine, and suspect infrastructure that Africa is better known for.
“Africa?!” you object. I insist, “Why not?”
“Competition is less intense and few foreign companies have a presence there, and pent-up consumer demand is strong,” argue Mutsa Chironga, Acha Leke, Susan Lund, and Arend van Wamelen of the Harvard Business Review. “Companies that desire revenues and profits, we believe, can no longer ignore Africa
And what better way to see that transformation, than by sharing several sharp infographics just released by the HBR?
On the ease of doing business:
(click through for interactive graphics on mobile growth, safety, and literacy)