Africa Rising: This Time is Different

     In early June this year, global strategy firm, the Boston Consulting Group published a report on the rising profile of forty fast growing and globalizing companies on the continent. Aptly named “The African Challengers,” the report showcased leading African firms with strong growth, annual sales ranging between $350 million to $80 billion and global ambitions. In late June, international consulting firm, McKinsey & Company released a report on African economies titled, “Lions on the Move: The progress and potential of African economies.”

Both reports are timely.

Only in May this year, World Bank Managing Director, Dr. Ngozi Okonjo Iweala asserted the rising profile of African economies at a speech she gave at the Harvard Kennedy School. According to her, Africa is poised to join the rank of the BRICs as the next big hub for global investment. With its fast growing population rate, the continent’s population is estimated to soon rival that of China and India and its trillion dollar economy has between 2000 and 2010, grown faster than that of economic power houses such as Brazil and India.

Many speculations about Africa’s rise have come and gone over the years without any of them becoming a reality. What makes this time different?

First, there is the boom in the African telecommunications space that has rapidly ushered in mobile telephony. The consequences of this boom cannot be ignored. With anticipated annual growth rates of about 12 percent from now till 2011, the continent’s current 450 million mobile phone subscriber base is likely to be on the increase. Mobile application developers that recognize the opportunity in mobile phones to increase access and provide much needed services such as M-PESA (Kenya’s mobile banking platform) will profit. The result is an entrepreneurship wave that can change the face of the continent.

Second is the youth bulge. A book published by the World Bank focusing on Africa’s youth labor market estimates the percentage of people between ages 12 – 24 on the continent at about 28%; and the percentage rate is not falling any time soon. By 2030, the continent is estimated to have as many youths as highly populous East Asia. Remember this does not account for the significant segment of the continent’s population between ages 24 – 40 who are young and virile.

The Bank rightly advocates that the bulge represents a window of opportunity for the continent. The present bulge represents the largest number in the continent’s history and is also historically the most educated cohort of youths in Africa. As such, the continent is currently experiencing an important demographic transition capable of making it or in fact breaking it. In the East Asian case, East Asian economies were able to reap the dividends of the demographic transition by putting the right policies and institutions in place. Will the same happen in Africa?

Currently, a large proportion of the continent still faces institutional problems that can materially impede on the bulge gains. But there is the internet.
A 2009 World Bank report found that a 10% increase in high speed internet connection increases economic growth by about 1.3%. Also, the internet brings along a myriad of benefits among which are an improved business environment, improved human capital, an increase in efficiency and communications and an increase in entrepreneurship. As the continent becomes more wired and as the aforementioned benefits become more apparent, Africa’s young generation will likely take advantage of the gains from higher inter connectivity. With the expansion of fiber optic bandwidth on the continent, the digital divide separating the continent from the rest of the world will likely come crashing down. Mobile internet will also be a force to reckon with, bringing the gains from telephony to the web as reduced prices of smart phones expands access to the continent’s middle and lower class.

Africa is rising not necessarily because of improved socio-economic numbers, but in spite of them. ICT is providing a way out for the young and the agile across the continent to circumvent the delimiting forces of bad institutions and weak governance. All we need is more access. Watch the continent soar…

Nmachi Jidenma is Founder of CP-Africa.com, a Pan-African age website that showcases progressive African ideas, news and personalities.

CP – Africa is a proud Media partner of  Unveiling Africa Foundation.