Business
Africa: An economic lion emerges
By 2050, 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.
(Reuters) – If you are looking for some good cheer in a pretty gloomy world, consider the growing consensus among some of the world’s smartest money that the next big emerging market may be Africa.
That is great news for Africans: As we have seen across so much of Asia, economic growth has accomplished what decades of well-meaning development efforts failed to do, lifting hundreds of millions out of poverty. If that happens in Africa, the world will be transformed.
This case for Africa as the world’s new economic tiger is made forcefully in The Fastest Billion: The Story Behind Africa’s Economic Revolution, a data-packed collection of essays to be published at the end of this month and brought together under the aegis of Renaissance Capital, an investment firm with Russian roots and global ambitions.
The consensus view is that investment decisions are about choosing, in the words of Pacific Investment Management Co. chief executive officer Mohamed El-Erian, “the cleanest dirty shirt.” The United States faces a fiscal cliff and political gridlock, Europe is poised between years of painfully slow growth and outright collapse, and even go-go China is slowing.
By contrast, in the view of Renaissance chief executive officer Stephen Jennings, Africa is on a tear. “It is the only region in the world where growth is accelerating,” he said by phone from Moscow. “If you strip out South Africa, the rest of the region is actually growing very, very quickly.”
Mr. Jennings believes Africa is following the path to economic development that has been trod in recent decades by countries such as Brazil, China and India – but in Africa the transformation is happening even faster.
“The chances are this will be like Asia and this will go on for the next 30 years,” he said. “It is helpful to remember where Asia was in the early 1970s. Then, most of the wars were in Asia, the lowest gross domestic product and life expectancy were in Asia. People thought that was Asia’s lot.”
