Africa: Yesterday, today and tomorrow

Mood swings have become the norm when it comes to the potential of the African continent. Pre 1990’s was described as the dark days of Africa.

Post-1990 into the early decades of this 21st century saw an uproar and cheers all over the world for the continent as the next big thing to happen.

After all these years of growing optimism, based partly on sustained GDP growth rates, sentiment regarding Africa’s prospects seems to have turned negative.

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Well, I am still and will continue to remain positive and so should you. I am going to show why I am even more optimistic about Africa’s prospects now than ever before. There is no fire on the mountain. Africa is still, and will continue to be the future of the world.

I love numbers and you know why…because numbers don’t lie and they are clear to everyone like an open book.

I will try my best to make these numbers meaningful to you as possible. Don’t worry if you are the type scared of numbers because these numbers are self-explanatory and it’s going to be fun.

Lets’ start with Africa yesterday and today:

  • 7% rise in FDI projects in Africa in 2015. Did you know that Africa is the fastest growing region for foreign direct investments in the world? In 2015, Africa was among the only two global regions to witness growth in FDI projects. In a year when the global FDI market grew at just 1%, Africa enjoyed a 65% increase in capital investment in 2014 over the previous year, to an estimated $87bn.
  • $1.754 trillion was Africa’s collective GDP in 2014, roughly equal to that of India. Does this really matter? Yes it does. Because it shows the growth momentum and the increase in economic activities across the continent. We can have another discussion on the impact of this growth in the life of the common African.
  • $1.3 trillion was Africa’s aggregate household consumption expenditure between 2000 and 2012 and this was growing at a rate of 10.7 each year. Africa’s growing middle class is more optimistic, connected and brand conscious. In 2013, there were over 375 million middle class people living in Africa.
  • 60% is Africa’s share of the world’s total amount of uncultivated, arable land. This shows clearly the continent’s agriculture potential and the space it has to lift productivity.
  • 35 is the number of African companies with revenues of at least $3 billion in 2013. I told you…you are missing out on the party. Companies which are bold and strategic are investing hugely in Africa and all they have seen is returns unmatched.

Africa tomorrow is even more exciting. And here is why:

  • By 2025, half of Africa will have internet access and 360 million will be via smartphones. The internet and mobile phone revolution happening across the continent will offer the fastest companies operating in Africa unrivalled opportunities.
  • $2.6 trillion will be Africa’s collective GDP in 2020. Where will this growth emanate from? Who will be leading in creating this growth? And why should you not miss out on this party? This momentum will undoubtedly present unprecedented opportunities to all economic active players on the continent.
  •  $1.4 trillion will be Africa’s consumer spending in 2020. This is how much Africans will spend in 2020 alone. Ever heard of the ever rising middle class and the increasing purchasing power people living in Africa? I am sure you have.
  • 1.1 billion will be the number of Africans of working age in 2040. The demographic trend of Africa in the coming years cannot be emphasized enough. By the year 2050, annual increase in population will exceed 42 million people per year. After 2050, Africa is projected to be the only major area that has a continually growing population, and it will house 39% of the global population in 2100.   
  • 50% will be the proportion of Africans living in cities by 2030 and over 60% will be living in cities by 2050. The world as we see it now is more about cities than countries. Imagine the size of African cities and the opportunities that this will present to active economic players on the continent.

Are you missing the party?

Re-read the facts above and calculate your position in Africa. Are you already missing out on the party? As the saying goes, it’s better to be late than never.

The African continent will provide safe haven for global investors and business leaders who are looking into the future.

The returns on investments in Africa is compared to none in the world. This is not stopping as the continent embraces more innovation and governments commit themselves to easing the process of doing business.

You have been absent from the party for far too long…now is the time to wear your shoes, join the party and enjoy awesome returns.

WRITER

Paul Frimpong Ch.E., is an investor analyst-Sub-Sahara Africa at Naseba based in Dubai He can be reached via paulf@naseba.com

Source: Facts referenced here were sourced from McKinsey Middle East & Africa, World Bank and FDI Intelligence

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