The world has changed since that conversation, and so has Africa. The inclusion of the African Union in the G20 – the intergovernmental forum representing 80% of global product and 75% of international trade – is testament to the continent’s rise as a partner that The world can no longer ignore it.
A consortium of 55 countries, the AU was established in 1999 with the stated goal of building a strong, stable and economically strong Africa. In her book, Amoako traces the arduous journey that some of the continent’s dedicated leaders have undertaken to reverse the paradox of Africa’s vast and miraculous natural resources and its poverty. suffering of the people here. These leaders have worked hard to build strong democratic institutions and good governance frameworks that have helped the AU attract global attention and financial support, thereby contributing to economic growth. of this country. . According to a McKinsey report, between 2000 and 2010, Africa’s real GDP grew at an average rate of 5.1% per year, compared with an average of 2.5% in the previous decade. Although growth slowed to 3.3% between 2010 and 2019 and the pandemic that followed Russia’s invasion of Ukraine disrupted global trade, growth This is unlikely to speed up anytime soon. However, global investors are still very excited about this region.
Their excitement is understandable.
Africa is India in the 1990s
Africa today is at the same stage as India was in the early 1990s, when economic liberalization began. A large consumer market, a young population, a qualified, highly skilled but cheap workforce, a favorable political environment and strong democratic institutions have made India an attractive destination for foreign investors. with global investors. And they came in droves. What followed was rapid economic growth that helped India lift hundreds of millions of people out of extreme poverty (estimated from 700 to 800 million to about a billion since 1990) and became mainstream. mainstream consumption. At the same time, the middle class has grown and with it the consumer basket has attracted more businesses and investments to the country.
However, India’s story is changing. The consumer market is nearing saturation, labour is now relatively expensive, and the population growth rate is slowing. All this will, eventually, have a bearing on the country`s economic growth rate. Notwithstanding its larger scale, China is on the same track.
Investors, therefore, are exploring newer horizons, and Africa has emerged as the right answer to their quest.
With more than a billion people, Africa is home to the largest, youngest and most dynamic population in the world. This is the only region in the world expected to have a birth rate above replacement rate in the coming decades. Estimates show that by 2050, more than 2.5 billion people will live in Africa and half of them will be under 25 years old. By 2025, household consumption and business spending on the continent are expected to exceed $2.1 trillion and $3.5 trillion, respectively. Another McKinsey report predicts a $5.6 trillion business opportunity in Africa by 2025, which is expected to grow much faster in the coming decades. Abundant natural resources
Meanwhile, Africa’s great attraction is still its abundant natural resources. For example, nearly 60% of the world’s renewable energy assets and 30% of mining assets are located on the continent. This area has abundant reserves of gold, diamonds, platinum, nickel, bauxite and uranium. The Democratic Republic of Congo meets nearly 70% of global cobalt demand, which has many uses across all sectors. Furthermore, Africa is and will continue to be a major oil producer. For more than a century, these natural resources have accounted for the majority of foreign direct investment in the region. This has changed over the past decade, according to the EY report. Today, services, telecommunications, technology, retail, media and entertainment are the industries that attract the most long-term investment capital. The rise of local business creates a virtuous economic cycle. A good example of this is m-Pesa, a digital currency and financial services platform launched in 2007 by Kenyan telecommunications provider Safaricom in partnership with Vodafone. The platform is currently used by nearly 60 million customers across the region and has created job opportunities for local youth. There are more and more good jobs outside the traditional agricultural and mining sectors, helping to raise people’s living standards, which in turn promises to stimulate further consumption and thus attract more investment.
However, the region still faces many significant challenges. In his book, Amoaka describes large-scale poverty, the remnants of colonialism, civil strife in many countries, high public debt, and a lack of committed leaders as factors that have prevented Africa from realizing its true potential. Many of them, as the World Bank report suggests, are still relevant today. Furthermore, competitive geopolitics and the expansionist ambitions of emerging global powers continue to hinder efforts to bring stability and peace to the region.
In this context, the inclusion of the AU in the G20 is a welcome development. It provides Africa with a platform to seek fair and respectful treatment from world powers. It is also an acknowledgment of the continent’s place at the negotiating table, where actors for the world’s future come together to chart a common path.
