Earlier this month global and regional leaders gathered in Abuja, Nigeria for the 24th World Economic Forum on Africa.
African economies continue to show robust growth, despite the economic pressures the developing world continues to face.
The International Monetary Fund (IMF) expects Africa to grow 5,5% in 2014, which is up from the 4,9% growth in 2013. Interestingly, we also have seven out of the ten fastest growing economies in the world located in Africa.
By 2050 Africa’s population will grow to two billion people, and we are on target to have the youngest workforce in the world, making the continent considerably more competitive, compared to the rest of the world, which will have ageing populations.
While the outlook remains optimistic, there are still massive challenges that we face on the continent.
One of the biggest obstacles to growth is access to electricity, with seven out every ten Africans not having access to it. African countries could also be losing between 2-5% of potential GDP growth because of the lack of electricity.
While electricity remains a challenge, infrastructure development is happening at a blistering pace, and ICT investment is growing in double-digit numbers. Businesses are exploding, entrepreneurship is at an all-time high, and there is a great sense of optimism about the continent.
There is no doubt that mobility and connectivity have had a key role in this economic acceleration across the continent. The last five years in particular have seen mobile penetration rates increase substantially, and in many cases technologies have actually leap-frogged those used in the developed market globally.
Having said that, internet penetration is growing, albeit at a slower pace. The International Telecommunication Union (ITU) ICT report this month predicts that in Africa almost 20 percent of the population will be online by end 2014 – up from 10 per cent in 2010.
They also predict that by the end of the year three billion people around world will have internet access, and penetration in developed countries is averaging at 80 percent.
Although South Africa has a more advanced infrastructure and more people have access to the internet compared to other countries, the report shows that only about one out of ten households are connected to the internet in Africa. But this number is growing at double-digit rates.
The story of Africa though, is mobile. Phone penetration in Africa is over 80 percent at the moment, but only around 18 percent of Africans have smartphones. This number is expected to grow to over 60 percent towards the end of this decade.
The recent World Economic Forum on Africa also focused on the role that technology will have in transforming African capitals into smart cities, which will drive innovation and empower populations by providing world-class education and medical facilities.
“It is Africa’s turn. Africa is rising and leadership and political will is emerging”, said Pravin Gordhan, Minister of Finance of South Africa. “As Africa becomes more connected to Western economies, there is optimism. But we must be aware of the risks of contagion, and we must be aware of how to manage those risks”, he said. Gordhan noted that it is important to find “new pockets of industrialisation”.
One thing is certain. Africa is the fastest growing region in the world. As political stability grows across the continent, so does economic growth and business opportunities. Massive amounts of capital investments are being made into infrastructure growth. The world’s economic story in the next decade will be Africa. The question is, is your organisation focused on these opportunities?