Africa’s long-term economic growth outlook offers one of the greatest investment opportunities in the world today.
It is a large, diverse and complex continent that contains 20% of the world’s land mass and accounts for 15% of the global population with over 1 billion people in 55 states that speak over 1,500 languages.
Currently, Africa only generates 3% of global GDP. However, macroeconomic stability has improved. Inflation is falling in key markets and there is improved debt to GDP management. Over the last decade, many African countries have produced average GDP growth rates of 5-10% per annum.
Africa is endowed with a demographic premium and its rapid economic growth appears to be sustainable, is gaining momentum and is consumer-led. Africa’s growth is driven by a youthful population, urban migration and a burgeoning middle-class, whose rising incomes are leading to increasing aspirations. The continent is well positioned for decades of ‘catch-up’ economic growth.
However, despite encouraging growth forecasts across much of the continent, African countries will struggle to sustain this GDP growth due to the fact that sub-Saharan Africa’s residential and industrial sectors suffer acute electricity shortages.
The ongoing ability to fulfil the economic and social promise of Africa depends largely upon the ability of government, international communities and investors to develop the continent’s huge electricity capacity requirements.