Projections show that by 2050, Africa’s population will double.
By 2100, one in three people on Earth will be African.
This means that, by the end of the century, sub-Saharan Africa—which already has an extraordinarily young population—will be home to almost half of the young people in the world.
With a steadily growing population heading towards 2bn, Africa’s 1.1bn workforce will be the world’s largest by 2040. Equally, with a collective GDP of $2.6 trillion by 2020 and $1.4 trillion of consumer spending, many see the impact of around 500m new middle class consumers. Africa as a continent has, on average, grown its economy by at 5% per annum over the last decade. It is already as urbanized as China and has as many cities of over 1m populations as Europe.
However clearly there are many ‘Africas’, with varied economies: from the oil exporters of Nigeria, Angola, Libya and Algeria to the already more diversified economies found in Egypt, South Africa and Morocco, there is a host of nations already with GDP per capita well over $2000. Elsewhere there are many countries such as Kenya, Tanzania, Ghana and Cameroon in transition from agricultural to manufacturing and service economies.
For years, Africa’s growth has been shaped by commodity prices – the continent has a third of the planet’s mineral resources, 10% of the world’s oil reserves and produces nearly 70% of the global diamond trade. While this has clearly been good for growth in the past, the dependency on a few key commodities, and hence their global price, has led to high levels of market uncertainty – especially around many of Africa’s currencies: at least ten African currencies, for example, lost more than 10% of their value in 2014. Although oil prices are volatile, oil and gas will however continue to be an important factor in the future of Africa – Africa will remain an important producer of oil and natural gas, accounting for 10% of global oil and 9% of natural gas production in 2035.
In a bid to diversify away from resources, several nations have been pushing hard to grow other sectors of the economy. To date, manufacturing, services and tourism in particular have all shown growth (although, whether from ebola, localized terrorism or national political change, growth from the latter source is evidently volatile). For example, while Nigeria is still very much an oil exporting economy, its service sector now accounts for 60% of its GDP – and ‘Nollywood’, its $3 billion film industry, is now the second largest in the world – bigger than Hollywood and just behind Bollywood in Mumbai. Likewise in Angola, Africa’s second largest oil exporter, where fishing, agriculture and manufacturing growth now means that a third of government revenue comes from non-oil sources. On the back of the success of m-pesa mobile payments that kicked off in Kenya in 2007, many African states, from Nigeria to the DRC, are seen as world leaders in adapting mobile technology and social networks to deliver potentially life-changing new financial platforms – many of which operate across borders and so engender greater transparency and cooperation. Older, protected, and often niche, monopolies are being superseded by collaborative, mass-market platforms from IT-enabled and, most importantly, more trusted, challengers.
Presented by Romano Pisciotti