For the last decade, African economic growth has averaged over 5%, second only to the hyper-economies of India and China. According to The African Report Magazine, if Africa positions itself as leading supplier to Asia’s fast-track economies, it can break through the 7% GDP growth barrier. That is the point at which African economies would see a sustainable cut in unemployment and substantial new investment in education and health programmes.
That is entirely possible, according to Nigeria’s former finance minister and now managing director of the World Bank, Ngozi Okonjo-Iweala: “I believe Africa will flourish, be part of that multi-polar world… there is room for optimism because things have been changing in Africa.
Activist Hubert Tshiswaka says the growing international and local demand for more accountability in the mining business is having a positive effect: “All these movements coming from outside will push the government.”
Analysts such as Francis Beddington at Insparo Asset Management argue that the “the sheer size of Nigeria’s population plus the profile of its natural resource base of oil and gas, a range of other mineral deposits and the commercial potential of a better-organized agricultural sector, mean it will be one of the world’s 20 leading economies within the next few decades.
Having looked at the effects that the BRIC (Brazil, Russia, India, and China) countries might have on the global economic order, Goldman analyses prospects for what it calls the Next 11 (N-11).
Currently the N-11 contribute about 9% to global economic growth. In 2050, the GDP top spot will be taken by China, followed by the US, India, Brazil and Mexico. Nigeria will be the 11th largest economy with a GDP of $5trn, just behind Germany and Britain.
But in terms of income per capita in 2050, Egypt would be the 18th highest and Nigeria the 20th, according to Goldman Sachs.
Even if these forecasts prove accurate, Cilliers of South Africa’s Institute for Security Studies argues this may still not add up to sustainable economic development for Nigeria. The one thing that really constrains Nigeria’s development is its dependence on oil.
PricewaterhouseCoopers reach similar conclusions to Goldman Sachs about Africa’s economic growth, but are more optimistic about South Africa’s potential as a more diversified and technically-developed economy.
Statistically, the fortunes of African economies are umbilically joined to population growth. Bigger population mean bigger GDPs. Most analysts accept that Africa has to break its dependence on commodity exports to achieve economic take-off in the next 50 years.
One possibility would be for Africa to take over some of China’s labour-intensive manufacturing: “China is starting to see its labour costs creep up. It’s starting to look where to put low-end (meaning labour-intensive) manufacturing,” according to the World Bank’s managing director Ngozi Okonjo-Iweala.
“So Africa can definitely benefit from this by working closely with China – and the World Bank is trying to help this process by having a trilateral kind of relationship agreement whereby we can help the countries put the right infrastructure in place, and then the Chinese can invest and create jobs in these countries.”
China will be the biggest economic power globally by 2060, followed perhaps by India, Africa’s ability to develop its relationship with them, away from the current model of exporting commodities and importing manufactured goods, could reshape its economic future.
Veronica Novoselova, Rough&Polished African Bureau editor in Namibia
