This week we celebrated Africa Day. Africa has come a long way since the founding of the Organisation of African Unity in 1963, currently known as the Africa Union (AU). The African Union, comprises of 54 member states, brought together to collectively address the challenges Africa has faced, namely, armed conflict, climate change, and poverty.
Africa has certainly transformed itself as is widely considered to be the last frontier. Over the last decade, Africa has been the second fastest growing region in the world after Asia. With over a billion people (50% below the age of 24) Africa will boast the highest proportion of working age population by 2040.
That’s more than China and India. Africa has the largest untapped natural resources in the world and over 60% of the world’s arable land. Africa’s time has come.
There is an old African proverb that says “Unless the lion has his own storyteller, the hunter will always have the best part of the story”.
Africa needs to tell its own story and it is about time that Africans tell their own story of Africa Rising.
“Africa is a place replete with possibilities”, stated Kgalema Motlanthe the vice-president of the Republic of South Africa.
It is no more a secret that Africa is fast becoming more significant in the global landscape. Even the highly-regarded Economist magazine had to acknowledge its folly when it initially referred to Africa as “The hopeless continent” on the 13th May 2000. On the 3rd March 2013, that same magazine referred to “Africa Rising: The hopeful continent” on it’s front cover.
Africa has enjoyed over two decades on uninterrupted growth. Since 1992, Sub-Saharan Africa (SSA), has grown steadily and even as the world went into recession post the financial crisis in 2008, Africa continued to grow.
The growth in Africa has been driven partly by commodity prices and a host of other factors. According to the world’s leading consultants Mckinsey and Company, “natural resources, and the related government spending they financed, generated just 32% of Africa’s GDP growth from 2000 through 2008. The remaining two-thirds came from other sectors, including wholesale and retail, transportation, telecommunications, and manufacturing.
Economic growth accelerated across the continent, in 27 of its 30 largest economies. Indeed, countries with and without significant resource exports had similar GDP growth rates.”
Sadly, Zimbabwe has not participated in the African growth story over the last 15 years.
In what’s been coined the “lost decade”, Zimbabwe’s GDP contracted by over 50%. Since dollarisation in 2009, growth recovered somewhat but since 2014 growth has once again stagnated.
So what does Africa look like today? According to Mckinsey and Company, Africa’s collective GDP is over US$1,6 trillion, that’s similar in size to Russia, India and Brazil. I often refer to Africa as the forgotten Bric. Consumer spending exceeds US$860 billion and is one of the fastest growing consumer markets in the world. It’s little wonder why global consumer companies like Nestle have started to take Africa more seriously.
Africa has the fastest growing mobile market in the world with over 316 million subscribers since 2000.
In 2000, there were no more than 20 000 fixed line phones in Nigeria and a 10 year waiting list. Today there are over 134 million mobile phone subscribers in Nigeria. This has completely transformed the way people do business in Africa. According to leading research, a 10% increase in mobile penetration increases total Factor Productivity by 4,2% in the long run and contributes over 0,25% to per capita GDP per annum in Africa.
Africa has 60% of the world’s uncultivated land suited for crop production, but has 30% of the world’s malnourished and only 3% of global agricultural exports. Africa needs to cultivate a strategy to develop agriculture.
Smallholder farmers will be key to African efforts not only to feed itself, but also to become a major food supplier for the rest of the world. Africa’s agricultural potential is clear. Productivity can also be boosted through the use better farming methods, fertiliser and irrigation.
African cereal yields are just over one-third of the developing world average, for example, linked to the fact that as much as 80% of Africa’s agriculture still depends on rain not irrigation.
Some African governments see the efficiencies of large-scale commercial farming as a means to fulfil this potential. But Africa cannot increase its food production, create jobs, and reduce poverty on the scale required without unlocking the potential of smallholder agriculture.
Nearly two out of three Africans depend on agriculture for their livelihoods. Indeed, Africa’s rapidly growing youth population makes job creation an urgent matter for many of the continent’s governments.
So what will Africa look like tomorrow?
GDP is projected to grow to US$2,6 trillion while consumer spending is expected to exceed US$1,4 trillion by 2020. Africa will have the highest proportion of working age population in the world by 2040, far exceeding China and India.
That certainly poses a challenge for many governments across Africa. Over the next three decades Africa needs to create over one billion jobs. That’s no easy task.
This transformation has not gone unnoticed and is reflected by the significant increase in FDI flows to Africa. Over the last decade FDI flows to Africa have increased over seven fold from less than US$10 billion in 2000 to over US$80 billion in 2013.
This trend is expected to continue as long as Africa’s growth story remains intact.
The recent fall in commodity prices especially oil has negatively impacted growth in a number of African countries including Nigeria and Angola.
Despite this the IMF projects SSA to grow by 4,5% in 2015, and 5,1% in 2016, making it the second fastest growing region in the world after emerging and developing Asia. Against this backdrop Zimbabwe is expected to grow by 2,8% in 2015 and 2,7% in 2016.
As we look back at the last 52 years it will be interesting to see what the next fifty years looks like. Africa has enjoyed tremendous success over the last 50 years and especially the last two decades.
Unfortunately, Zimbabwe has not participated in the African renaissance and risks being left behind as the rest of Africa continues to march ahead. Let’s hope we can get our act together and turn this economy around. Let’s hope that Zimbabwe can catch up and partake in the African renaissance.