Africa was for so long seen by some as a dark continent or a hopeless continent as the Economist once put it.
However, in the last two decades, the image of Africa has been improving with experts and economists predicting the continent is on verge of take-off which has made the continent the great hope of the world with the world bank arguing that; “Africa could be on the brink of an economic-take off, much like China was 30 years ago.”
Analysts argues that in recent years, Africa’s growth has been impressive despite economic hardships in some different parts of the world. Indeed, Economist later updated Africa’s status from “the hopeless continent” to “Africa rising .”
Analysis predict that African countries will continue with better economic performance than most of other regions – with the continent maintaining 7 of the world’s ten fastest growing economies in 2020.
In their five years foresight report for Africa (2020-2025), Brookings Institution predictions indicate greater performance for African countries with Senegal topping the list at 8.3%, Rwanda 7.9%, and Niger at 7.3%. Uganda is listed in 4th position with its economy expected to grow by 7.2% while Mozambique is in 5th position with its economy projected to grow by 6.9%.
For the year 2020 alone, International Monitory Fund projections indicate that African small economies will perform higher than the continents giants with South Sudan’s economy projected to grow by 8.2%, Rwanda 8.1%, Côte d’Ivoire at 7.3%, Ethiopia 7.2% while Senegal will grow at 6.8%. Benin will see its economy in 2020 grow by 67%, Uganda 6.2% while Kenya, Mozambique, Niger and Burkina Faso are all expected to perform at 6%.
Whereas these countries projection present a promising story and contribute total average economic growth rate projection to about 3.8%, (which is about 3.6% for sub-Saharan Africa) it is important to note that these averages are weighed down closer to the global average which is 3.4% by two of Africa’s largest economies; Nigeria and South Africa at 2.5% and 1.1% respectively.
As population stagnate or decrease in Europe, China, Japan and other western countries, Africa’s population of 1.2 billion is projected to double by 2050. More people mean more consumption, more production and consequently more growth. Some African countries economies grew on average at about 6% in the year 2019. That is almost times three of United States of America’s rate and of course higher than many other countries.
Such figures only paint a bright future for Africa. Many of African countries are becoming more liberal in terms of economy while many are registering positive other aspects such as democracy. That notwithstanding, there are some challenges ahead the continent must address.
In 2019, the world bank indicated that Africa may become home to more than 90% of the world’s poor by 2030 citing African governments little fiscal space to invest in poverty-reduction programs as one of the reasons.
This means that African countries are faced with a challenge of low productivity. True, African countries maybe growing now, but the question is for how long. Many are dependent on commodities that more than a half of Africa’s export falls in minerals. Arguably, this makes the continent’s economy very much vulnerable according to fluctuations in global demand. In addition to that, more than two thirds of Africa’s labour force is employed in agriculture – which is predominantly substance farming. It is also important to note that manufacturing which is key for developed economies has not improved well that its total GDP is not different from that of 1970s.
World Bank, IMF and indeed African Development Bank argue that; a one percent point fall in GDP of OECD member countries to Africa’s export rate earnings decline dropping by 10%. Indeed, at height of U.S-China trade war, in June last year, the World Bank revised Africa’s economic growth projection from 3.3% to 2.8%. With China’s official announcement on 17th January 2020 that second largest economy expanded by 6.1% in 2019 from the year before – the worst figure in 29 years , an argument can be made that since China is Africa’s largest trading partner and Foreign Exchange source, the continent may face some shortfalls in their projections.
Such challenges with growing corruption cases in some African countries with a weak private sector which is more in bed with governments for favours, projections for Africa’s bright future may remain unrealised. Unemployment amongst youth is so high – a recipe for future crisis. The recent xenophobic attacks in South Africa offer a good example that unemployment can drive people crazy. There is no doubt Africa has a great potential for economic take off, but this to be translated into something tangible for their people there is need for political willingness to come up with bold reforms, like trade, governance and ensure transparency and fight corruption. It can be argued that the biggest issue we should watch is how the continent will deal with its most valuable resource; not minerals, not oil but people.
It is projected that Africa’s share of the world’s population will rise from 1/7th to about 1/5th by the middle of this century. Arguably, if African governments ensure that their people have access to good education, good health care, good governance, and employment opportunities, there will be no one to stop the continent from becoming a power house. Short of this, African governments better worry of their population increase, it will not be a blessing but a created curse.
Yes, African external assistance is important for the continent but what is more important is not aide but important African generated or internal reforms.