For many unexposed people around the world, Africa is not an attractive market for business. But for those with an eye on the future, Africa is actually the place to be right now.
Its land area is second only to Asia’s with a major share of the world’s agricultural land and mineral reserves. Its current population of around 1.2 billion is projected to double over the next 30 years by 2050.
Statistics tell the African business opportunities’ story better than a thousand words.
Below are 8 reasons why American businesses and business leaders all over the world should be in Africa right away.
1. There are 5.6 trillion dollars in projected consumer and business spending in Africa by 2025.
2. Africa has 1.2 billion people with its population expected to double by 2050.
3. There are 11 million square miles of land, three times that of Europe.
4. There are 400 companies with annual revenues of $1 billion or more.
5. There are 122 million active users of mobile financial services.
6. There would be 89 cities of over 1 million inhabitants by 2030.
7. There are 54 countries expected to create the world’s largest free trade area.
8. And there is two times potential growth in manufacturing output by 2025.
Although those numbers should be enough for global businesses, what really makes Africa a continent to watch is the historic economic shift underway.
“In Europe and America, average per capita income barely increased for almost two thousand years, but suddenly soared with the Industrial Revolution, increasing twentyfold between 1820 and 2015,” argue the authors of Africa’s business revolution.
“Asia’s boom came later but much faster: its GDP per capita income has been even more dramatic: it took just three decades for GDP per capita increased to multiply tenfold after the launch of economic reforms at the end of the 1970s,” the authors write.
Many African cities today seem to have the same entrepreneurial energy as Chinese cities had not long ago.
“The urban energy of Lagos, Nairobi, or Abidjan today suggests that much of Africa has reached an inflection point where a significant number of people have risen beyond providing for their basic needs and have the wherewithal to discriminate among consumer goods, save for their first washing machine or refrigerator, or send their kids to better school,” the authors of Africa’s business revolution write.
Indeed, the numbers suggest that Africa is in the midst of a significant acceleration.
Real GDP grew at an average annual rate of 2 percent during the 1980s and 1990s, but then leaped ahead of 5.4 percent in 2000 – 2010, making Africa the world’s fastest growing region after Asia.
In late 1990s, private capital flows to Africa, including foreign direct investment, equity, and debt, overtook aid flows and remittances for the first time in decades.
Growth has slowed sharply in Africa in recent years to an annual rate of 3.3 percent between 2010 and 2015, and around 3 percent now.
The slowdown in growth was caused mainly by twin shocks of the Arab Spring which halted growth altogether in Egypt, Libya, and Tunisia, and the collapse of oil prices, which caused growth to fall shaperly in oil-exporting countries including Algeria, Angola, and Nigeria.
That the general figure hides the real story in the rest of Africa where real annual GDP growth hrew from 4.1 percent in the period from 2000 to 2010 to 4.4 percent between 2010 and 2015.
The economy has slowed again now according to the latest projections by the World Bank and International Monetary Fund, but the potentials for investors are huge in Africa.