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The trouble with Africa is that ... Africa is no longer in trouble (well, not as bad as it used to be). The problem is that this news seems to have not reached a few people around the world. Jason Russell of KONY 2012 (in)fame recently had a rude awakening to the fact that Africa is no longer the
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The Economist: Africa rising
Page last updated at Tuesday, December 6, 2011 7:07 AM // Leave Your Comment
…After decades of slow growth, Africa has a real chance to follow in the footsteps of Asia
The shops are stacked six feet high with goods, the streets outside are jammed with customers and salespeople are sweating profusely under the onslaught. But this is not a high street during the Christmas-shopping season in the rich world. It is the Onitsha market in southern Nigeria, every day of the year. Many call it the world’s biggest. Up to 3 million people go there daily to buy rice and soap, computers and construction equipment. It is a hub for traders from the Gulf of Guinea, a region blighted by corruption, piracy, poverty and disease but also home to millions of highly motivated entrepreneurs and increasingly prosperous consumers.
Over the past decade six of the world’s ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including Japan. Even allowing for the knock-on effect of the northern hemisphere’s slowdown, the IMF expects Africa to grow by 6% this year and nearly 6% in 2012, about the same as Asia.
The commodities boom is partly responsible. In 2000-08 around a quarter of Africa’s growth came from higher revenues from natural resources. Favourable demography is another cause. With fertility rates crashing in Asia and Latin America, half of the increase in population over the next 40 years will be in Africa. But the growth also has a lot to do with the manufacturing and service economies that African countries are beginning to develop. The big question is whether Africa can keep that up if demand for commodities drops.
Copper, gold, oil—and a pinch of salt
Optimism about Africa needs to be taken in fairly small doses, for things are still exceedingly bleak in much of the continent. Most Africans live on less than two dollars a day. Food production per person has slumped since independence in the 1960s. The average lifespan in some countries is under 50. Drought and famine persist. The climate is worsening, with deforestation and desertification still on the march.
Some countries praised for their breakneck economic growth, such as Angola and Equatorial Guinea, are oil-sodden kleptocracies. Some that have begun to get economic development right, such as Rwanda and Ethiopia, have become politically noxious. Congo, now undergoing a shoddy election, still looks barely governable and hideously corrupt. Zimbabwe is a scar on the conscience of the rest of southern Africa. South Africa, which used to be a model for the continent, is tainted with corruption; and within the ruling African National Congress there is talk of nationalising land and mines (see article).
Yet against that depressingly familiar backdrop, some fundamental numbers are moving in the right direction (see article). Africa now has a fast-growing middle class: according to Standard Bank, around 60m Africans have an income of $3,000 a year, and 100m will in 2015. The rate of foreign investment has soared around tenfold in the past decade.
China’s arrival has improved Africa’s infrastructure and boosted its manufacturing sector. Other non-Western countries, from Brazil and Turkey to Malaysia and India, are following its lead. Africa could break into the global market for light manufacturing and services such as call centres. Cross-border commerce, long suppressed by political rivalry, is growing, as tariffs fall and barriers to trade are dismantled.
Africa’s enthusiasm for technology is boosting growth. It has more than 600m mobile-phone users—more than America or Europe. Since roads are generally dreadful, advances in communications, with mobile banking and telephonic agro-info, have been a huge boon. Around a tenth of Africa’s land mass is covered by mobile-internet services—a higher proportion than in India. The health of many millions of Africans has also improved, thanks in part to the wider distribution of mosquito nets and the gradual easing of the ravages of HIV/AIDS. Skills are improving: productivity is growing by nearly 3% a year, compared with 2.3% in America.
All this is happening partly because Africa is at last getting a taste of peace and decent government. For three decades after African countries threw off their colonial shackles, not a single one (bar the Indian Ocean island of Mauritius) peacefully ousted a government or president at the ballot box. But since Benin set the mainland trend in 1991, it has happened more than 30 times—far more often than in the Arab world.
Population trends could enhance these promising developments. A bulge of better-educated young people of working age is entering the job market and birth rates are beginning to decline. As the proportion of working-age people to dependents rises, growth should get a boost. Asia enjoyed such a “demographic dividend”, which began three decades ago and is now tailing off. In Africa it is just starting.
Having a lot of young adults is good for any country if its economy is thriving, but if jobs are in short supply it can lead to frustration and violence. Whether Africa’s demography brings a dividend or disaster is largely up to its governments.
More trade than aid
Africa still needs deep reform. Governments should make it easier to start businesses and cut some taxes and collect honestly the ones they impose. Land needs to be taken out of communal ownership and title handed over to individual farmers so that they can get credit and expand. And, most of all, politicians need to keep their noses out of the trough and to leave power when their voters tell them to.
Western governments should open up to trade rather than just dish out aid. America’s African Growth and Opportunity Act, which lowered tariff barriers for many goods, is a good start, but it needs to be widened and copied by other nations. Foreign investors should sign the Extractive Industries Transparency Initiative, which would let Africans see what foreign companies pay for licences to exploit natural resources. African governments should insist on total openness in the deals they strike with foreign companies and governments.
Autocracy, corruption and strife will not disappear overnight. But at a dark time for the world economy, Africa’s progress is a reminder of the transformative promise of growth.
Source: The Economist
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It has been described as the new scramble for Africa. The continent has awoken from the nightmare of its mid-90s civil wars. Coups and dictators appear to be going out of fashion. Now, with six of the world's 10 fastest-growing economies, there is a growing consensus that Africa's time has come.
Africa's GDP growth will average 5% in the coming decade, according to Ernst & Young, with Ghana, Ethiopia and Uganda set to top 7% a year. Foreign direct investment, which has risen six-fold in the past decade, is forecast to reach $150bn (£95bn) by 2015.
There is growing confidence in Africa as an investment destination, with the highest returns in the world. In the World Bank's most recent Ease of Doing Business rankings, 14 African countries ranked ahead of Russia, 16 ahead of Brazil and 17 ahead of India.
But with expectation comes the potential for disappointment. The question now is can Africa build on the opportunity and avoid the pitfalls of the past?
Some are in no doubt that the continent is better shape this time. This month, Tony Blair, who once described Africa as a "scar on the conscience of the world", told businessmen in London: "There is no doubt: Africa is changing for the better, the perceptions of Africa are also changing for the better. There is a new sense of hope and confidence, an optimism and an expectation that is based on evidence not dreams.
"Above all, I am noticing in my frequent visits there that there is a new generation of leaders in politics, business and civic society who don't simply have a new competence about how they approach their tasks but a new attitude, a new frame of thinking, a new way of looking at their own situation."
Whereas in the past these opportunities may have been squandered, or cancelled out by a global financial crisis, it now appears that Africa is better positioned to withstand shocks. During the meltdown of 2009, while developed western economies were shrinking at average of 2%, sub-Saharan Africa was still growing at about 3.5%.
Mthuli Ncube, chief economist at the African Development Bank, gave three reasons: "First, the growing domestic demand in Africa itself, the rise of a middle class, acted as a shock absorber. Second, there was improved macroeconomic management from a generation of managers who trained during the restructuring programmes of the early 90s.
"Third, African economies have diversified: Nigeria is now not only oil but also tourism and agriculture. Diversification is very helpful when there is a decline in commodity prices."
The bank estimates the middle class at 313 million people in 2010, 34% of the continent's population, and predicts it will grow to 1.1 billion (42%) by 2060. There are now more than 100,000 Africans with at least $1m to invest, according to the consultants Merrill Lynch and Capgemini. A mobile phone revolution is sweeping the continent.
Blair said the growing influence of China was another reason for optimism. Three years ago it overtook the United States as Africa's biggest trading partner. China, which has a thirst for Africa's natural resources, says bilateral trade grew from $10.6bn in 2000 to $160bn in 2011 and investment totalled $13bn.
Sceptics accuse China of a morally blind "resource colonialism". But in his speech in London, Blair said: "The fact is that China has both the capital and the capacity to get things done. This is especially true in infrastructure.
"How many times do you see in Africa a road promised for years, that finally is being built; and we, in the west, at the same time as we make legitimate points about the methods of investment sometimes used, have to face up to the uncomfortable fact that this didn't happen with us."
However, as the good times roll, there is a danger of Africa becoming too dependent on exporting mineral resources and not investing in manufacturing, Ncube added. "Most trade is between Africa and the rest of the world. It will take a while to fix."
Intra-Africa trade, punished by lack of regional integration and poor infrastructure, makes up a woeful 10% of total exports, compared with 60% for south-east Asian countries.
Such weakness led to a warning from the Africa Progress Panel, whose members include Blair, Kofi Annan and Bob Geldof. "The lack of economic diversification, in terms of both export products and destinations, explains the high volatility of African trade in recent years, and the strongly adverse impact of the global economic crisis through trade," said the panel in its 2011 report[pdf].
"It also explains why so little of the continent's high GDP growth translates into social development and tangible improvements to people's lives ... It is thus hardly surprising that, despite a decade of strong economic growth, poverty remains pervasive throughout the continent."
Africa remains the poorest continent, with only one in four people having access to electricity. The experience of Angola and others suggests that economic growth may deepen, rather than reduce, the gap between rich and poor.
There appears to be no causal relationship between growth and democracy and human rights. Corruption is still rife and agricultural productivity frustrating low. These issues could undermine the growth narrative.
The oil and gas finds have the potential to translate into riches. But Philip Walker, senior editor/economist for Africa at the Economist Intelligence Unit, warned that the projects were still at a very early stage.
"The common bottlenecks to doing business on the continent – excessive bureaucracy and government inefficiency – coupled with a lack of regulation in many countries mean that it will be a number of years before the potential is fully realised."
But despite the persistent caveats, Africa, where 70% of population is under the age of 30, is thinking big. Talks began last year on a planned Cape-to-Cairo free trade zone encompassing 26 countries, 525 million people and $1tn in output which, it is hoped, could be in place in three years.
As one Reuters commentary put it: "The penny has also dropped in most capitals that Africa needs to start making more goods and selling them internally rather than just digging up minerals, putting them on a ship to China and importing washing machines or shoes on the return run."
At the end of another of Kinshasa's potholed roads, lined with shacks and crumbling matchbox houses, comes a sudden clearing. It is a sandy patch of land surrounded by water in which bare-chested boys in dugout canoes paddle among the hyacinths. A giant pump is working day and night, reclaiming land from the sandbanks and river beds, expanding the city in defiance of nature.
Welcome to La Cité du Fleuve – River City, or "the new Manhattan" as this multibillion-pound development has been hopefully described by newspapers in the Democratic Republic of the Congo (DRC). Just 15 hectares (38 acres) now, but aiming for 380, it is perhaps the most ambitious statement yet about Africa's improving fortunes – and the promise of a growing African consumer class.
River City is backed by a British hedge fund that specialises in counter-trend betting and, says the developer Robert Choudury, "a bigger counter-trend is hard to find". Ravaged by war and disease, DRC ranks bottom of the UN's human development index. More than half the population is living on less than $1.25 a day and only 2% of roads are paved.
But change is happening all over Africa and it looks possible, even here. Sitting with an iPad on his desk in the only building completed so far, French-born Choudury likens the project to Sandton, the commercial heart of Johannesburg often described as the wealthiest square mile on the continent.
His plans include a 18,000-square metre shopping mall and 100-room hotel built by South African entrepreneur Richard Moloko, plus churches, condominiums, hospitals and restaurants, "everything you need" away from the mayhem of Kinshasa's overcrowded, overpriced real estate today.
It is hoped that hydro-power from the nearby Congo River will provide more than a third of the new district's energy needs. All this could take decades, but Choudury has already sold four apartments – to Congolese buyers – for $218-250,000 each.
When Choudury, 52, was first trying to drum up interest in the development, he took out an eight-page newspaper advert with the words, "The future is Africa". The claim seems more and more credible.
Africa's middle class is a reality and widening by the day. It is a trend marked by changing lifestyles, greater spending power, more recreational time, the harnessing of technology and a new political assertiveness and cultural self-confidence.
The African Development Bank (AfDB) says Africa's middle class had risen to 313 million people in 2010, 34% of the continent's population – compared with 111 million (26%) in 1980, 151 million (27%) in 1990 and 196 million (27%) in 2000.
The bank's report defined middle class as people who spend the equivalent of $2-$20 (£1.30-£13) a day, saying this is appropriate given the cost of living for Africa's near 1 billion people. It acknowledged that many living on $2-$4 a day are "floating" and could easily slip back into poverty. Taking these people out of the equation, it put the stable middle class at 123 million, 13% of the population. But AfDB is bullish about the future, predicting the African middle class will grow to 1.1 billion (42%) in 2060. By then, those living below the poverty line will be in the minority (33%). Mthuli Ncube, the bank's chief economist, describes the trajectory as "unstoppable".
Others, such as the OECD and World Bank are less confident, yet a body of research is starting to build an alternative narrative about Africa. The Economist magazine, which in 2000 ran a cover story headlined "The hopeless continent", has just performed a U-turn with "The hopeful continent".
While the headlines in 2011 were grabbed by revolution in north Africa and famine in Somalia, the underlying mantra of the past decade has been growth, growth, growth.
The International Monetary Fund (IMF) expects Africa to have grown by 6% this year and grow by nearly 6% in 2012, roughly the same as Asia and in stark contrast to the eurozone. Over the past decade, six of the world's 10 fastest-growing countries were African. And in eight of the past 10 years, the African lions have grown faster than the Asian tigers.
One of the most striking examples is Nigeria, where GDP rose five-fold from $46bn (£29bn) in 2000 to $24bn (£158bn) in 2011, according to the IMF. A survey by Renaissance Capital found that nearly half of the country's middle class (defined as an average monthly income of $500-$600) were planning to buy fridges, freezers and other white goods, "suggesting a consumer boom is under way".
Africa has a young, fast-growing, fast-urbanising population. Many countries have benefited from a commodities boom and a 10-fold rise in foreign investment in the past decade, notably from China. Africa's productivity is growing by nearly 3% a year, compared with 2.3% in the United States. Arguably, governance is improving, elections spreading and dictatorships and wars declining.
Perhaps the most tangible catalyst is technology. The mobile phone is fast becoming as much an African symbol as the leopard or baobab tree.
A Gallup poll this year found they are owned by 71% of adults in Nigeria, 62% in Botswana and more than half the populations of Ghana and Kenya. The continent is the world's fastest-growing mobile phone market, according to the industry group Groupe Spéciale Mobile Association – Africa's 600m users make it second only to Asia. Subscriber levels have grown by almost 20% for each of the past five years, and the total is expected to hit 735 million by 2013.
Around a 10th of Africa's land mass is covered by mobile-internet services – a higher proportion than in India. This has allowed Africans to leapfrog poor landline infrastructure, which had been a brake on progress. Many will get their first internet experience on a mobile rather than a desktop computer, using services that are revolutionising commerce, farming and healthcare. Almost 18 million Kenyans use their mobiles as a bank account to deposit or transfer money and pay their accounts – contributing 8% of GDP.
Technology startup companies are flourishing in hubs in Kenya, Nigeria, Rwanda and South Africa.Internet penetration is still relatively low at 120 million users, but catching up fast: the growth rate between 2000 and 2011 was 2,527%, compared with a world average of 480%. These include around 32 million Facebook users. In all, 27% of African internet users have Facebook profiles, compared with 18% of users in Asia.
The spread of wireless-equipped coffee shops and shopping malls such as the Accra Mall in Ghana, The Palms in Lagos, Nigeria, and Westgate in Nairobi, Kenya, reflects the rise of the African consumer. Their spending is projected by the McKinsey Global Institute to reach $1.4tn (£900bn) in 2020, up from about $860bn (£550bn) in 2008. Retail giants such as Walmart are coming for a piece of the action, as sales of fridges, TVs and mobile phones have surged in virtually every African country in recent years, AfDB says.
Possession of cars and motorcycles in Ghana, for example, has risen by 81% in the past five years.
The African middle classes are more likely to have smaller families, own their homes and have salaried jobs or small businesses. They tend to opt for private education and health services and send their children to overseas universities. Some are turning into conspicuous consumers, running up debts on credit cards like their counterparts in the west.
But it's not all about lifestyles. A web-literate generation, with preoccupations beyond where the next meal is coming from, can self-organise and take on autocratic leaders, as seen in Egypt, Libya and Tunisia this year. Mo Ibrahim, a Sudanese mobile phone entrepreneur and campaigner for improved Africa governance, believes the middle class will be an agent of change.
"I think they're going to play a crucial role, because it does tend to be the educated young sector of the population, and those guys are better educated than our generation and much much better informed," he told the Guardian in Tunis. "They're growing up in a society which has lots of media around them – satellites, TV – they watch everything that's going on around the world. You have so many newspapers, you have the internet, you have mobile phones, you have all these things. In our times we had only one newspaper published by the government, one TV channel run by the government."
However, Africa is still the world's poorest continent, with life expectancy in some countries stubbornly below 50. Economic growth does not necessarily mean shared growth: in some cases it means widening inequality, most vividly in South Africa. Nor does it necessarily bring about genuine democracy, as some of Africa's strongest performers – Angola, Ethiopia – are ruled by autocrats.
Climate change and the threats of deforestation and land-grabbing have not gone away.
Kofi Annan, a former UN secretary general, warned that the gap between the elites and the majority still has to be bridged. "We would want to see development that improves the lives of all," Annan, now chair of the Africa Progress Panel, told the Guardian. "That is one of the reasons why we have been stressing the achievement and implementation of the MDGs [millennium development goals] and the governments making sure that the deals they are making for the exploitation of mineral resources, and the benefits that accrue from that, affects the population.
"We are not out promoting the establishment of a consumer class. Of course that is part of it, and it creates markets which encourages companies to invest, but the objective is to improve the lot of the entire population."
However, there is once again a "wind of change blowing through this continent", albeit different from the one Harold Macmillan was describing in 1960. It can be felt in places such as Maputo in Mozambique, where last year African Medical Investments (AMI) opened a private boutique hospital offering the country's first cosmetic surgery, including liposculpture, skin lightening and scar removals.
"A lot of it is through political stability," said Dr Vivek Solanki, then AMI's chief executive. "If you look at the wars and famine, it's minimal. Africa has more than 50 nation states," said Dr Vivek Solanki, then AMI's chief executive "and at the moment as we speak there are perhaps three or four countries with warring factions going on.
Most of Africa has now stabilised," he adds"most of Africa is educated and affluent not only through foreign investment but through local entrepreneurship, local enterprise, local education.
"The combination means there has been this burgeoning middle class that's come up and they have demands just like you and me."
Tycoons and philanthropists
With an estimated fortune of $10.1bn (£6.5bn), the Nigerian cement tycoon Aliko Dangote is Africa's richest man and one of the continent's 16 billionaires. The South African diamond magnate Nicky Oppenheimer – who also owns the country's largest private game park, the Tswalu Kalahari reserve – comes second, with a $6.5bn fortune. According to Forbes, Patrice Motsepe, a 40-year-old mining magnate, is South Africa's first and only black billionaire, with $2.5bn.
In November the magazine published its inaugural list of the "40 richest Africans", which it called "a testament to the growing global importance of the continent". Together, the combined wealth of Africa's 40 richest is $64.9bn – roughly twice the GDP of Kenya ($32bn) or Ghana ($31bn) in 2010.
Though many of the continent's countries remain among the poorest in the world, there are now more than 100,000 Africans with at least $1m to invest, according to the consultants Merrill Lynch and Capgemini. This year's World Wealth Report says the number of Africa's super-rich grew by 11.1% in 2010 – faster than in any other region. What's more, the report says, their combined wealth grew by 13.6% last year, to $1.2 trillion.
Some of Africa's wealthiest are also philanthropists: Dangote gave millions to a fund for small businesses in Nigeria last year, and Theophilus Danjuma, an oil tycoon, put aside $100m for NGOs working in the country.
According to a 2010 report from Barclays Bank, South Africa's super-rich are among the most generous in the world – second only to those in the US.
But the OECD has warned middle-income countries such as South Africa to keep a close eye on their top earners and the dangers of rising inequalities. Others note that, while they don't appear on Forbes's rich list, many of the richest people may well be former and current leaders of African countries.
Claire Provost
Great Article, showing a true and promising picture of today's Africa.
a big market, a fantastic investment opportunity, Africa's Telecommunication and IT Industry is booming
According to a recent study, South Africa is experiencing a boom in eCommerce and online shopping. South African consumers spent over R2,000,000,000 online in 2010 and this figure is estimated to grow by 40% towards the end of 2011.
eCommerce in South Africa has been described as entering into a phase of sustained acceleration with exponential growth that shows no sign of slowing down. One of the reasons for the current eCommerce boom is the increased number of South Africans that are connected to the internet. South Africa currently has over 5 million fixed line internet users a figure that is expected to double in the next five years.
The next five years will be an important period for eCommerce in South Africa as research has shown that it takes the average internet user 5 years to be become comfortable with buying online.
At FGX, we believe that this period will dramatically decrease as big pushes from some of South Africa's largest retailers, online stores and daily deal sites help make shopping online more of a day-to-day occurrence for the average South African.
It's clearly the right time for almost any business to consider embarking on a strategy to enter the world of eCommerce. You might want to know how.
Last year, FGX Studios developed a unique eCommerce solution for SA Duty Free (Airports Company South Africa). We spec'ed, designed and built the SA Duty Free website and implemented an online retail solution that was specially designed to meet the needs of a niche market of local and international travelers flying in and out of South Africa.
Travelers can conveniently browse, order and pay for a wide range of luxury products, fragrances and electronics at duty free prices online and collect on their trip. To accommodate users who might be new to the world of online shopping, we introduced the "Select & Collect" option, whereby travelers are able to take advantage of the convenience factor of placing their order online, but they only pay for it when collecting their ready-packed order at the express till in Duty Free Mall.
Awareness of South Africa Duty Free and their online retail offerings was established and in the second quarter of 2011, an online engagement and CRM strategy via social channels and digital communications was launched, featuring content relating to lifestyle, travel and shopping.
"Since launching, sales and engagement levels continue to sharply rise month-on-month. After take-off, the project is flying high and we are excited about where it is heading to," says Wynand van Niekerk, Head of Business Development, FGX Studios.
Throughout the Sub-Saharan Africa, telecommunication and IT, are booming, the investors should open his eye to these sectors
There is Money in Africa, enough to bail out a suffering European Country, still thinking your investment in the dark continent is not safe, think again.
The African Development Bank (AfDB) Group has said Africa’s economic growth will reach 4.5 per cent this year and a further 0.3 per cent (4.8 per cent) by 2013.
In a 291-page publication, entitled: The African Economic Outlook, a compendium of data on 53 African countries jointly published by the AfDB, UN Economic Commission for Africa and others, released in Arusha, Tanzania during its yearly meeting, stated that Africa’s economy grew by 3.4 per cent last year, with North Africa recording 0.5 per cent growth, compared to Nigeria and other sub-Saharan African countries with over five per cent growth in that year.
“The economic outlook for Africa remains optimistic. Natural resource-rich economies are expected to do better than more mature emerging economies,”the publication stated.The report attributed the growth to natural resources exports, migrant remittances and good economic policies maintained by some of the continent’s countries, aided by good weather and relative stability in the international market.
However, it warned that the crisis in Europe, which is Africa’s premier economic and trading partner, could undermine demand for exports.”The continued economic crisis in the euro area may reduce demand for African exports, while lowering external resource inflows,” it said.
Earlier, the bank’s President Donald Kaberuka commended African countries for maintaining growth, but urged caution given the uncertain external environment.
He appealled for caution, saying Africa should not show excessive optimism with regard to the continent’s economic growth.
There will always be warnings, and the call to caution, especially by those who invest the most amounts of money, with the biggest Returns from the so called dark continent. here are some more positive Outlooks that show, that even the African continent has more option to the European
Trad platform, i.e Intra-African Trade or the most famous Asian Tigers.
http://theweeklyworld.com/?p=5679
The report states that foreign direct investment (FDI) in Africa has accelerated as investor perceptions begin to shift. This means that projects into Africa have more than doubled from 339 in 2003 to 857 in 2011.
According to the survey, Intra-African investment has also grown exponentially, increasing from 27 in 2003 to 145 in 2011, 17% of all new FDI projects on the continent last year.
Further more, 60% of respondents say the perception of Africa as a business location has improved over the past three years, 75% believe it will improve further over the next three years
another link that opens our eyes about Intra-African Trade in figures:
http://www.sudantribune.com/Sudan-in-top-ten-importers-of,36789
