Africa's combined current gross domestic product is reasonably similar to that of Brazil and Russia, and slightly above that of India. The Financial Times has writeup by the chief economist of Goldman Sachs.
If you were to think about Africa collectively, and consider it in the same framework that informs our 2050 scenarios for the Bric, next 11 and other major economies, you would see an economy as big as some of the Brics. If you then look at the potential of the 11 largest African economies for the next 40 years (by studying their likely demographics, the resulting changes in their working population and their productivity) their combined GDP by 2050 would reach more than $13 trillion making them bigger than either Brazil or Russia, although not China or India..
Nearly half of this GDP would originate from Egypt and Nigeria, so the progress of those two nations is crucial to the continent’s potential. Among the other 11, South Africa has a critical role to play as it is more developed than the others, and also somewhat of a gateway to southern Africa. South Africa itself however does not have enough people – just 45m – to be a Bric in itself. But Nigeria, at 180m or more, is not far off 20 per cent of Africa’s population. It could, if it got everything right, be bigger than any of Canada, Italy or South Korea by 2050
Goldman Sachs maintains an index of 13 different variables that are critical for sustainable growth and productivity. They call this their Growth Environment Score (GES), and estimate the data annually for nearly 180 countries around the world. The four Bric economies the score is only 4.9. For the 11 African countries, the average score is 3.5. So to achieve their 2050 potential, the African countries have to raise their scores significantly. Stable macroeconomic policies focused on low inflation and avoiding excessive government and external debt are perhaps the easiest targets. Among the micro components, we identify the stability of government, improving the rule of law, improving the most basic levels of education, spreading the use of mobile telephone and internet – there have already been impressive developments here – and perhaps most importantly eradicating the chronic corruption seen throughout many African nations.
The counter argument for Africa optimism is the diversity of the continent. The poor parts of China and India will get support from the richer parts. It is not clear that stronger nations in Africa will pull up the poorer nations.
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