Africa’s Hopeful Economies

This month’s ‘Economist’ includes an excellent article which is well worth a read for development economists looking at this fascinating continent. A few statistics from the article follow and the full article can be found here.

• Africa’s economies are consistently growing faster than those of almost any other region of the world and several big countries are likely to hit growth rates of 10% whilst inflation dropped from 22% in the 1990s to 8% in the past decade.

• Severe income disparities persist through much of the continent; but a genuine middle class is emerging providing exciting opportunities.

• Africa’s population is set to double, from 1 billion to 2 billion, over the next 40 years and the dependency ratio will improve along with labour productivity.

• A generation ago Brazil, Russia, India and China accounted for just 1% of African trade; by 2030 the rate is expected to be 50%. If China and India continue to grow Africa probably will too.

• Trade barriers have been reduced and intra-African trade has gone from 6% to 13% of the total volume; Africa has about half the world’s gold reserves and a third of its diamonds, not to mention copper, coltan and all sorts of other minerals and metals.

Of course there remain plenty of challenges ahead and the article also briefly touches on, amongst others, the need for improvements in education, infrastructure, agricultural and demographic issues that could prevent potential growth.