5 reasons to be (cautiously) optimistic about Africa

Updated on 23 January 2015

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5 reasons to be (cautiously) optimistic about Africa

 

It can sometimes be difficult to be positive about Africa’s rise with the continent’s ongoing challenges like poverty and the lack of basic services.

But despite polarised views of the region’s outlook, there are big reasons to be cautiously optimistic, says Elsie Kanza, senior director and the head of Africa at the World Economic Forum.

Writing from the ongoing World Economic Forum Summit in Davos, Switzerland, in her blog post 5 reasons to be optimistic about Africa, Kanza writes that there is no denying that Africa has made remarkable progress over the past two decades.

Here are Kanza’s five reasons:

1. The regional economy has grown steadily since 2001 and continues to do so at a rate of about 5% a year. By 2013, more than 23 countries in sub-Saharan Africa had per capita gross domestic product (GDP) greater than $1 000 (R11 524).

“Rwanda now ranks among the top 10 most gender
equal societies in the world”

2. The consumer market is rising in tandem with its growing population. In 2008, McKinsey, a multinational management consulting firm that conducts qualitative and quantitative analysis, estimated that African consumers spent $860-billion on goods and services, which was 35% more than the $635-billion that Indian consumers spent, and just over the $821-billion spent in Russia.

3. The environment for doing business is improving. According to the World Bank, between 2013 and 2014, sub-Saharan Africa realised the largest number of business regulatory reforms, and five of the top 10 countries that improved the most were from sub-Saharan Africa.

4. Access to financial services is rising, thanks to the adoption of technology and innovation. For example, Equity Bank in Kenya reaches more than 8-million customers through its combination of an extensive network of physical bank branches and mobile financial services.

5. Africa is closing its gender gap. According to the WEF’s global gender gap index 2014, Rwanda now ranks among the top 10 most gender equal societies in the world in terms of economic and political participation. Burundi and South Africa rank 17th and 18th respectively.

Challenges

Kanza does however, admit that that the continent is made up 54 very different countries. And that even within one country there are vast diffferences between “rural and urban areas, sectors and populations”, she writes. She also adds that the continent continues to be vulnerable to global shocks, and that “a crisis in a single country can adversely affect the investment climate for the whole of Africa”, she writes.

A version of this article first appeared on SouthAfrica.info.  

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