African Economies Capture World Attention
Tag: African Economies, African Economies Attention
Summary: Young men and women chat along the glittering corridors of the sprawling shopping complex. With state-of-the-art mobile communication gadgets in hand, they go in and out of the mall's 65 shops, fill…
Young men and women chat along the glittering corridors of the sprawling shopping complex. With state-of-the-art mobile communication gadgets in hand, they go in and out of the mall's 65 shops, filling shopping bags with expensive items.
There is a large and well-equipped children's playground at the back. Fully air-conditioned, the mall has 20,000 square metres of retail space, a theatre, restaurants, bars and parking for 900 cars. Welcome to the Accra Mall in Ghana, one of West Africa's best - and comparable to any mall in the world.
In Ghana, as in many other African countries, young people are living out the continent's economic growth. They are educated and relatively well-off, as seen in their cars, dress and homes.
Ghana's economy grew by an impressive 14.4 per cent in 2011, while many African economies are expected to be among the world's fastest-growing in 2012, according to the World Bank. Ghana, Liberia, Nigeria, Ethiopia, the Democratic Republic of the Congo and others will lead the charge.
Undoubtedly Africa is still bedevilled by poverty, with half of its people living on less than $2 a day. However, its economic growth over the past decade has been striking.
Several factors make Africa an investor's dreamland. McKinsey Global Institute, a think tank, writes, "The rate of return on foreign investment is higher in Africa than in any other developing region."
Africa's economic growth is driven by a number of factors, including an end to many armed conflicts, abundant natural resources and economic reforms that have promoted a better business climate.
More political stability is lubricating the continent's economic engine. The UN Economic Commission for Africa (ECA) in 2005 linked democracy to economic growth. "Good governance is central to improving economic performance and promoting economic progress in Africa," argued Abdoulie Janneh, the ECA executive secretary at the time.
Another important factor is accelerating urbanization. While it may strain social services in the cities, it has also led to an increase in urban consumers. More than 40 per cent of Africa's population now lives in cities, and by 2030 "Africa's top 18 cities will have a combined spending power of $1.3 trillion," McKinsey projects.
The Wall Street Journal reports that Africa's middle class, currently numbering 60 million, will reach 100 million by 2015.
Africa's overall economic indicators have been remarkable. Over the past decade, Africa's trade with the rest of the world has increased by more than 200 per cent, annual inflation has averaged only 8 per cent and foreign debt has decreased by 25 per cent. Foreign direct investment (FDI) grew by 27 per cent in 2011 alone.
Even though projections for overall growth in 2012 have been revised downward due to the political crisis in North Africa, Africa's economy will still grow by 4.2 per cent, according to a UN report in June.