Business
Africa facing unprecedented growth: Continent hosts 6 fastest growing economies
Six of the world’s fastest growing economies are in sub-Saharan Africa, among them Uganda and Ethiopia, according to UK-based economic experts Ernst & Young.
According to a new report by the consultancy, growth in sub-Saharan Africa from 2003-2010 averaged 5.7 percent and is expected to have been over five per cent in 2010 and 2011.
This makes Africa the second fastest-growing region in the world after Asia.
The report says that while economic growth had failed to address the gap between rich and poor in Africa, with only one in four people having access to electricity, there were indications that things were changing.
“Africa’s long standing problems are still evident in many countries: food shortages, high inflation, poverty, corruption and autocracy,” the report says.
“But democracy is making strides across the continent and there has been a steady improvement in economic policies.
“Many African countries have also passed significant economic and legislative reforms, making them much more business-friendly in order to attract foreign direct investment.”
There was also a growing middle class in Africa estimated at around 313 million people in 2010, 34 percent of the continent’s population, according to the African Development Bank.
Consultants Merrill Lynch and Capgemini said there were now more than 100,000 Africans with at least US$1 million to invest.
“This period of growth is almost unprecedented for Africa,” the Ernst & Young report says.
However, it also notes that sub-Saharan Africa “has continued to suffer from some of its traditional problems, including food shortages resulting from adverse weather conditions in a number of countries and high inflation, driven by higher food and fuel prices.”
There were also concerns at the lack of intra-Africa trade, which still only made up 10 percent of total exports, and adequate investment in education and health.
“Investment in education has been patchy at best and, with a few exceptions, education and skill levels remain low,” the report says.
“This will deter investors that need a skilled local labor force. In addition, many African countries need to improve the ease of doing business.”
By: Paul Redfern – The Africa Review