5 Reasons Why Africa WILL Be a Key Global Market in The Next Decade
The turn of the millennium has proven why downgrading Africa’s role in the global economy is both foolish and short-sighted. Believe it or not, the tide is turning in favour of this underestimated economy.
In 2018, six out of the ten fastest-growing economies in the world were African countries. Moreover, the World Bank’s 2019 Doing Business Index showed that one-third of all reforms recorded globally were in sub-Saharan Africa.
So, the question is, what brought along this unprecedented economic acceleration?
Here are the top five reasons, including an insight into how translation services for the African market could help you infiltrate this economic powerhouse.
A Demographic Powerhouse
In a world of slowing global population growth, Africa’s steadily-growing population of 1.2 billion people is a welcome exception in the global market. In fact, Africa’s population size is expected to double in the next 30 years.
According to UN estimates, Africa has had the highest percentage growth in the working-age population across continents. If you’re wondering why this could potentially be a good thing, try looking at the other side of the story.
Many economies worldwide, even the ones on the crest of a wave, are struggling with something that is both inevitable and out of their hands: a shrinking working population.
But as other countries and economies grow old, Africa emerges as a demographic powerhouse. Africa’s working-age population, people within the age range of 15-64 years old, is consistently growing.
In fact, for the foreseeable future, sub-Saharan African countries will be the only ones with a growing number of people as consumers and workers.
As you guessed, the best way to reach out to and utilize this labour force is through the assistance of a reputable certified translation service. Currently, more than 80% of this population growth will occur within cities. In other words, an ever-increasing working-age population is leading to ever-growing cities— urbanization.
Rapid Urbanization and Growing Consumer Power
Africa’s expanding working-age demographic that are living in cities is leading to an epic urbanization boom. With such a large portion of the population flocking to cities, Africa is undeniably the fastest urbanizing region globally.
And since the two have historically gone hand-in-hand, urbanization is also paving the way for modernization in Africa.
We’ve all seen it before. Whether you take the example of Asia in the 20th century or that of Europe following the 19th century, an economic boom is underway. In fact, we can see the early signs already.
has been predicted that by 2025, African consumers will be spending $2 trillion. This is underpinned by growing household consumption rates, which grew at a 4.2% compound annual rate until 2015.
What’s more, 80% of this consumer base comes from within Africa’s leading cities. Among the top of these consumer powerhouses are Luanda, Angola; Dar es Salaam, Tanzania; Khartoum, Sudan; Kinshasa, DRC; and Addis Ababa, Ethiopia.
Over the next decade, Nigerian consumers may make up for 30% of Africa’s consumption growth. With such an overwhelming consumer power emerging from Africa’s major cities, investment prospects in Africa are moving away from extractive sectors.
Moving Beyond Extractive Sectors
Africa’s foreign direct investment has focused solely on extracting and exporting its natural resources for the longest time. However, a growing population, rapid urbanization and modernization, and increasing consumer power shift the focus.
It seems that investors have caught wind of the growing consumer power. Consequently, they have expanded their interest in other sectors. These sectors are swiftly replacing the extractive industry as engines for Africa’s economic growth.
Now, infrastructure, digital technologies, automation, and other manufacturing industries are taking the reins for Africa’s economic prosperity. Of course, you will also need translation services for the African market to infiltrate these sectors and thoroughly appeal to your target audience.
Improved Fiscal Policies
For any new and emerging economy to make headway, policy-makers and businesses must work side by side. Without courteous fiscal policies, investors can be easily put off.
Luckily, Africa’s changing role as a key economic player has given African governments reason to be as welcoming as possible for investors. At the same time, they need to ensure that their most valuable resource doesn’t just go to waste.
According to Vera Songwe, the Executive Secretary for the Economic Commission for Africa, there is a great need for responsive policies that promote fiscal sustainability.
Luckily, we can already see some responsive fiscal policies in action. For example, South Africa’s coronavirus stimulus package was highly effective in helping businesses recover from an economic shock.
Similarly, government agencies are trying to lend a helping hand to investors to overcome certain obstacles. This includes providing sovereign guarantees, offering political-risk insurance, and establishing public-private partnerships with foreign investors.
At the end of the day, African countries are working towards providing adequate public resources and quality investments. Undoubtedly, this will help Africa fully participate in the global economy.
Improving Infrastructure
For a long time, poor infrastructure has been one of the foremost obstacles to economic growth in Africa. Even while sitting on a goldmine of resources, economies won’t get much use if they don’t have the right tools.
The continent has a remarkable shortage of necessary infrastructures such as power plants, roads, ports, railroads, hospitals, and schools. Moreover, nearly 600 million Africans don’t have access to the electricity grid.
The good news is that as a result of improved fiscal governance, infrastructure investment has become more accessible. In fact, Africa’s annual investment in infrastructure has doubled in the past two decades, standing at 3.5% of GDP.
If it hasn’t already occurred to you, this presents a huge investment opportunity for investors and entrepreneurs.
For a long time, Africa has been undermined as a key player in the global market. However, the resource-heavy continent is swiftly catching up to other formidable economies.
With a growing labour force, increasing urbanization and industrialization, improved fiscal policies, and booming infrastructure, Africa will easily be a key global market in the next decade.
So, do you want in on this economic revolution? Well, all you need are the right ideas and a professional African language translation service to help you actualize those ideas.
