African economic vigorous development five trends
Tag: African economic, African economic trends
Summary: One of the unfortunate consequences of the well-advertised “bad news” out of Africa concerning some very real conflicts and the lingering authoritarian tendencies on the part of a few regimes is t…
One of the unfortunate consequences of the well-advertised “bad news” out of Africa concerning some very real conflicts and the lingering authoritarian tendencies on the part of a few regimes is that most of the continent’s “good news” tends to get eclipsed.
As a result, it comes as a surprise to many that what The Economist described just a decade ago as the “hopeless continent” is home to six of the world’s fastest-growing economies over the past decade and that, as a whole, Africa is expected to grow faster this year than any other region or country, apart from China and India.
Having rebounded quickly from the recent global contraction, Africa is on track to see a total gross domestic product of $2.6 trillion by the end of this decade.
Far from being a fluke, these positive indicators are the result of significant forces which have been at work transforming Africa’s economic prospects and, ultimately, its social and political landscape.
First, demographics mean that Africa is not only one of the most populous regions on the planet, but one of the youngest.
Since 2000, the continent’s population has increased by 200 million to over 1 billion. Future growth projections indicate that the growth will be even more pronounced in the coming years, averaging 2.2 percent annually for the next decade, compared to just 0.9 percent in Asia. At these rates, by 2050, Africa’s population of 2 billion will have overtaken both India (estimated to be 1.6 billion then) and China (1.4 billion); in fact, one in five of people in the world will be African.
Moreover, this rapid population growth means that Africa’s population will be younger than that of every other region in the world.
Already, Africa’s median age of 19.7 years (18.6 in Sub-Saharan Africa) is considerably younger than the 29.2 years in Asia, 36.8 years in the United States, and 40.1 years in Europe. One result of this is that the size of the African workforce is growing more rapidly than its counterparts elsewhere; by 2050, one in four workers on the planet will be African.
These demographic trends, when coupled with robust economic growth, will lead to the emergence of a solid consumer base, especially in countries that invest in a skilled workforce.
Gabon, for example, spends its oil income on scholarships, which last year sent 4,287 of its young people—a large number when one considers the country’s small population of just over 1.4 million—to institutions overseas to get training not available in the three major universities at home.
Overall, the African Development Bank estimates that around 150 million Africans joined the ranks of the middle class since 1990 and another 40 million will join them by 2015. This, will in turn, create additional economic opportunities.
Second, Africa’s population is rapidly urbanizing, thus adding further impetus to positive economic growth.
Around 40 percent of Africans currently live in urban areas, but given current rates of urbanization—the fastest-growing in the world—that number will be slightly more than half by 2030 and well over 60 percent by 2050.
Already, Africa has 49 cities with a population over 1 million. More importantly, there is a clear and mutually reinforcing relationship between urbanization and economic growth.
Because of the benefits of agglomeration and economies of scale, urban-based enterprises are generally more productive, contributing more to GDP than their rural equivalents.
Because of better access to basic infrastructure, urban dwellers can more easily engage in business. Because urban centers provide concentrated markets for agricultural products, rural areas benefit from the growth of cities.
Because cities with their population densities facilitate mobilization for economically supportive political and social change, the increased urbanization will also enhance the development of civil society.
Moreover, urbanization is also spurring increased investments in roads, buildings, water systems, and other infrastructure—creating additional stimulus for African economies as well as opportunities for the private sector.