Years before it became popular to equate Africa with being “open for business,” the “final frontier for investment” and “one of the world’s fastest-growing regions”; amid the widely reported, very real concerns about social and economic hindrances to progress, political instability and a cohort of near-septuagenarians, septuagenarians and octogenarians stubbornly holding on to power, this column began to show small but significant steps in what clearly is Africa’s steady march to prosperity. Today, in a world that places great store in numbers and trends — a world where numbers and trends determine how much monetary investment and positive or negative media attention is paid to a country, region, industry, group of people or institution — Africa stands out.
Here’s the pretty picture: 60 percent of Africa’s current population of 1 billion is less than 25 years old. To some, this is a huge reserve for young development energy; to others, it’s a consumer-marketing heaven. In its report “The Middle of the Pyramid: Dynamics of the Middle Class in Africa,” the African Development Bank says the number of middle-class Africans has tripled over the past 30 years to 313 million people, more than 34 percent of the continent’s population. From 2000 to 2010 alone, the number surged 60 percent from 196 million. About 100,000 Africans had a net worth of $800 billion in 2008, or about 60 percent of Africa’s GDP, or 80 percent of sub-Saharan Africa’s, the report says.
In AfDB terms, “middle-class” individuals are those with a higher annual income relative to the average. True, that average is lower in Africa than in the West, hence Africa’s “middle class” comprises individuals whose annual income exceeds U.S. $3,900 in purchasing power parity terms. Again, it’s the trend that counts. Small wonder that hundreds of African-Americans have relocated to Ghana over the past few years, as reported in AARP The Magazine.
We feared that the global economic crisis would peel away the gains of the past two decades and set the continent back several years, only to learn that its recovery from the crisis has been faster than in many other parts of the world. The zealots of numbers and trends are talking about an “economic resurgence” in Africa between 2001 and 2010, when gross domestic product growth on the continent averaged 5.2 percent annually — a rate also expected in 2011, and higher than the global average of 4.2 percent.
Earlier in the year, The Economist pointed out that, in the decade to 2010, six of the world’s 10 fastest-growing economies (counting only countries with a population of more than 10 million) were in Africa, south of the Sahara Desert, when, in the two decades to 2000, only Uganda made the Top 10. The other nine were in Asia. The six on the 2001–2010 list were Angola (11 percent annual average GDP growth), Nigeria (8.9 percent), Ethiopia (8.4 percent), Chad (7.9 percent), Mozambique (7.9 percent) and Rwanda (7.6 percent). Angola topped the list, followed — yes, followed — by China, with annual average GDP growth of 10.5 percent. Rounding out the 10 were Myanmar (10.3 percent), Kazakhstan (8.2 percent) and Cambodia (7.7 percent).
The International Monetary Fund, dispenser, along with the World Bank, of grim structural adjustment for economies at risk, places seven African countries among the 10 fastest-growing economies over the next five years through 2015: Ethiopia (8.1 percent, third on the list after China at 9.5 percent and India at 8.1 percent), Mozambique (7.7 percent), Tanzania (7.2 percent), Congo (7.0 percent), Ghana (7.0 percent), Zambia (6.9 percent) and Nigeria (6.8 percent). The Economist has dubbed these fast-growing African economies “lion kings.” And, speaking of China, London’s Standard Chartered Bank forecasts that Africa’s economy as a whole will roar at an average annual rate of 7 percent over the next 20 years, slightly faster than China’s.
There are four areas that Africa must focus on in order to sustain this strong growth and withstand external shocks that could topple the “floating” segment of the middle class into poverty, according to the 2011 Africa Competitiveness Report, produced jointly by the African Development Bank, World Economic Forum and World Bank. These focus areas are diversifying export products and expanding regional trade; upgrading managerial skills and higher education, especially in the fields of science, engineering, technology and business; enhancing women’s entrepreneurship so that they can move out of informal, micro, low-growth and low-profit areas where they are concentrated, into higher value-added activities; and reaping the full benefits of tourism by improving safety and security, upgrading health and hygiene levels, developing infrastructure and access to African sites, and fostering human capital.
Business and investment strategists, take note.