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Africa: An economic lion emerges

Posted on October 19, 2012 – 7:02 pmNo Comment

The same prejudices apply to Africa, Mr. Jennings argued. But Africa has been remaking itself. “It is not something that we are predicting – it is something that is happening,” he said. “You have this very broad-based, Asia-like process of modernization.”

Mr. Jennings, who noted that Kenya halved infant mortality in five years, an improvement it took India 25 years to achieve, predicts that within a generation, Africa’s place in the world will be utterly changed. By 2050, he believes Nigeria will be the most populous country in the world and the African economy will be bigger than that of the United States and Europe combined.

He is not alone in predicting an African renaissance. Two years ago, McKinsey, the management consulting firm, put a savanna spin on the emerging market cliché in a report titled, “Lions on the move: The progress and potential of African economies.” It noted that African GDP had risen 4.9 per cent per year from 2000 to 2008, adding: “Our analysis suggests that Africa’s long-term economic prospects are quite strong. Global businesses cannot afford to ignore the potential.”

He is not alone in predicting an African renaissance. Two years ago, McKinsey, the management consulting firm, put a savanna spin on the emerging market cliché in a report titled, “Lions on the move: The progress and potential of African economies.” It noted that African GDP had risen 4.9 per cent per year from 2000 to 2008, adding: “Our analysis suggests that Africa’s long-term economic prospects are quite strong. Global businesses cannot afford to ignore the potential.”

An obvious source of Africa’s new might is the surge in commodity prices, and both reports acknowledge the impact of natural resources. But they also have a shared conviction that domestic factors are at play, such as improved governance.

Both McKinsey and Renaissance have produced hopeful documents, and for a continent that mostly gets hand-wringingly gloomy news coverage, that is a welcome perspective.

But it is worth challenging one optimistic assumption, particularly because of its wider implications. This is the view that in Africa, economic growth and democracy will go together. But in Africa, as in other emerging markets such as China, Russia and even Turkey, it may not be true.

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