Fewer wars, less civil strife, better control of disease and famine have made way for an economic rebound on the African continent based on the resurgence of a huge consumer market.
Africa has China-scale demographics. Today, there are more than 500 million people of working age on the continent. By 2040, their number is projected to exceed 1.1 billion—larger than the workforce in China or India—lifting GDP growth.
“[M]any of Africa’s 50-plus individual economies face serious challenges, including poverty, disease, and high infant mortality. Yet Africa’s collective GDP, at $1.6 trillion in 2008, is now roughly equal to Brazil’s or Russia’s, and the continent is among the world’s most rapidly growing economic regions. This acceleration is a sign of hard-earned progress and promise.” Extract from McKinsey Quarterly
Over the last 20 years, three-quarters of the continent’s increase in GDP per capita came from an expanding workforce, the rest from higher labor productivity. An important factor explaining this productivity boom, according to McKinseys, has been another China-scale event…
The rise of African cities.
In 1980, just 28 percent of Africans lived in cities. Today, 40 percent of the continent’s one billion people do—a proportion roughly comparable to China’s and larger than India’s (Exhibit 2). By 2030, that share is projected to rise to 50 percent, and Africa’s top 18 cities will have a combined spending power of $1.3 trillion.
Australia’s trade with Africa? Not so hot.