McKinsey on Africa | Checking Africa's vital signs

More McKinsey Articles:

» Sizing Africa's business opportunities
Strong prospects await global companies that invest in the continent’s consumer, agricultural, natural-resource, and infrastructure sectors.

Africa’s economic growth is creating substantial new business opportunities that multinational companies often overlook. New projections from the McKinsey Global Institute (MGI) show at least four categories that together could be worth $2.6 trillion in annual revenues by 2020 (exhibit). In Lions on the move: The progress and potential of African economies, MGI reviews the prospects of the continent’s consumer-facing sectors (retailing, telecommunications, and banking, among others), agriculture, natural resources, and infrastructure.

» Can Africa continue to grow?
A panel of regional business leaders discusses its prospects.

» What’s driving Africa’s growth
The rate of return on foreign investment is higher in Africa than in any other developing region. Global executives and investors must pay heed.

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A familiarity with Africa’s demographics, economics, and business climate is essential to considering future trajectories of growth.

Africa’s 50-plus economies are growing at a remarkable pace: across the region, real GDP increased by an average of 4.9 percent a year between 2000 and 2008, compared with just 2.4 percent a year during the 1990s. Moreover, a number of African governments have undertaken structural reforms in recent years that are making their economies more attractive to investors. Indeed, the annual flow of foreign direct investment (FDI) into Africa in 2008 increased to $62 billion, from $9 billion in 2000. Relative to GDP, that is almost as large as the flow into China. This increased FDI accounted for the bulk of new African capital inflows, which grew rapidly from 2000 to 2008.

Nonetheless, quickening economic growth cannot obscure the continent’s significant problems—among them, high levels of poverty, political instability, poor education, excessive government bureaucracy, and corruption. In addition, Africans must improve both the quality and accessibility of health care and address the sustainability of resources.

To put these opportunities and challenges into context, we offer this interactive snapshot of selected data highlighting the region’s demographics, economics, and business climate.

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Checking Africa’s vital signs

Checking Africa’s vital signs