African economy comes 2050

Topics: Africa, Economic growth, Economics Pages: 8 (2418 words) Published: December 19, 2013
Africa, the continent infamously dubbed the ‘”hopeless continent” by the Economist in May 2000, is now one of the most popular emerging markets in the world. Viewed by many as the last investment frontier, today Africa is rich in opportunity and potential – a sentiment supported by the rapid growth of a number of African economies; seven of which are among the ten fastest growing economies in the world.    Investment opportunities in Africa

The current economic climate means there couldn’t be a better time to invest in Africa. As markets around the world take a hit, Africa’s income is projected to increase by approximately 4.5% this year. The International Monetary Fund (IMF) is predicting that no continent will experience growth as strongly as Africa in the coming years. As foreign investors flock to the continent to seek out investment opportunities in Africa, stakeholders not only grow their own balance sheet, but they create jobs, support local business and strengthen local communities across the continent.  African markets

Trade between Africa and the rest of the world increased by 200% between 2000 and 2011. Though the export of oil, natural gas and minerals may influence this growth, the economic boom is not just attributed to the continent’s natural resources. In fact, less traditional businesses such as retail commerce, transportation, telecommunications and manufacturing all play a major part in Africa’s growth. While foreign investors are looking at the continent, African companies have also begun moving outside of their home markets to invest in other African markets: for example, Nigeria’s Dangote Cement recently invested in Senegal and Zambia while Kenyan supermarket chain, Nakumatt has expanded its reach into Rwanda, Tanzania and Uganda. Africa’s leading economies

1. SOUTH AFRICA
While much of the world struggled in the wake of the global financial crisis, South Africa stood firm and managed to stay on its feet. Classified by the World Bank as an “upper middle-income country”, South Africa has the largest economy in Africa and remains ripe with potential. While strict fiscal and monetary policies kept South Africa grounded during the financial meltdown, the current state of the economy can be attributed to the following factors: political stability, a well-capitalised banking system, abundant natural resources, efficient regulatory systems, good research and development capabilities, and a well-established manufacturing base. The main contributor to GDP is the services sector which comes in at 66.7% and is followed by the industry sector at 30.8%. South Africa currently contributes roughly 24% of Africa’s overall GDP.  

2. NIGERIA
Known as the “Giant of Africa”, Nigeria is the most populous city in Africa and the second strongest economy on the continent. While previously hindered by years of mismanagement, Nigeria has worked hard to pursue economic reforms and is back on track towards achieving its full economic potential. Nigeria is considered to be an emerging market and one of Africa’s evolving ‘mega cities’. With rapidly expanding financial, service, communications and entertainment sectors, oil production is not the only factor to influence the economy. Many believe that Nigeria will become one of the 20 largest economies in the world by 2020, with reports estimating that Nigeria will overtake South Africa as Africa’s leading economy in 2014.    

3. EGYPT
In 2012, Egypt had a GDP estimated at approximately $497.88 billion – a number primarily driven by the services and industrial sectors. In 2013, a rush of political unrest and a new government set new challenges for Egypt’s once-booming economy. Though Egypt is experiencing a high level of unemployment, the Egyptian equity market is still one of the most developed in the region, boasting more than 633 listed companies in 2012. The future of Egypt’s economy largely rests on the measures taken by the new government.   

4. ALGERIA
The...
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