30 OVERVIEW
Table 3 African economic growth (2011) – top 28 economies by size (US$ billions)
South Africa
Nigeria Egypt Algeria Angola
Morocco Sudan Libya
Tunisia Ghana Kenya
Cameroon Tanzania Ethiopia
Côte d’Ivoire Zambia Congo
Uganda DRC
Equtl Guinea Botswana Gabon
Namibia Senegal Mali
Mauritius
Mozambique Madagascar
0 315 | 5.9 232 | 1.2 176 | 4.1
99 | 7.9 98 | 3.0
66 | 4.1 58 | -26.1 47 | 0.8
35 | 9.1 34 | 4.5
26 | 3.0 25 | 6.3 24 | 7.5 24 | -1.2 20 | 7.0 20 | 7.8 19 | 6.3 18 | 4.0 18 | 4.3 16 | 5.8 16 | 5.0 14 | 4.2 13 | 4.3 11 | 5.6 11 | 4.4 10 | 7.3 9 | 2.0
100 Nominal GDP | Real GDP growth 396 | 3.9
and Zambia offer good prospects, as do the better-established markets of South Africa and Namibia. Opportunities in North Africa will be constrained by the political turmoil sweeping the region, but provided the situation stabilizes and the democratic gains become entrenched, markets such as Egypt and Tunisia will offer considerable potential. Apart from Egypt, which is linked to the rest of Africa via COMESA, other North African economies are less well connected to the continent and more closely aligned with Europe. However, despite rapid overall growth and development
in Africa, opportunities are limited in some countries at present (see table 4). There is still room for improvement in areas such as electoral procedure and governance. The African Union Commission advocates free and fair elections and maintenance of the rule of law, as well as good governance by Member States and governments to avoid political instability and conflicts, which end up limiting prospects for international investment. Although the continent still has some trouble spots, less risk-averse investors can still find opportunities. Weak infrastructure, especially power and transport, is a
200 300 400 500 Source: Economist Intelligence Unit forecasts
Table 4 Global competitiveness rankings, Africa Country
South Africa 54 Mauritius Namibia Morocco Botswana Rwanda Egypt
Algeria
55 74 75 76 80 81 86
The Gambia 90 Libya Benin
Senegal Kenya
Cameroon Tanzania Ghana Zambia
Ranking Change Country -9 2 0
Cape Verde 117 Uganda Ethiopia
118 119
-2 Madagascar 124 -10 Malawi -
-11 Nigeria -3 -9
100 103 104 106 111 113 114 115
Lesotho 125
Swaziland 126 127 128
Côte d’Ivoire 129
-12 Mozambique 131 3 Mali
132
-12 Burkina Faso 134 -8 0
-13 Burundi 0
-3
Angola Chad
Mauritania 135 Zimbabwe 136 137 138 139
-10 -1 -3 -6 -
-28 -21 -13 -2 -2 -6 -8 -4 -4 -
-8
Source: World Economic Forum, Global Competitiveness Report (2010/11). ‘Africa’ covers 34 countries and ‘world’ 139 countries
widespread problem – even in South Africa, which has the region’s best-developed networks. Major investment is being undertaken, but the scale of the problem requires a short-term solution. Improving Africa’s infrastructure is a daunting task. The spectacular growth in mobile telephony over the
Ranking Change -
past decade highlights the potential for well-structured investments in Africa’s infrastructure. A decade ago, mobile penetration rates were lower than one percent in almost every country in the region. In 2010, around 40 percent of Africans had mobile phones. Between 2002 and 2007, mobile subscriptions in Africa grew by 49 percent annually, and there is still much scope for expansion. Furthermore, several fibre-optic cables have recently been laid off the coast of Africa, which will allow new internet services to be offered via mobile phones, creating huge potential for growth, even once subscription rates begin to stabilize. Urban infrastructure is set to become a key priority.
Today, 40 percent of Africans live in urban areas – a proportion close to that of China. By 2030, Africa is forecast to have over 80 cities with more than one million inhabitants, and by 2050 an estimated 63 percent of Africa’s population will be urban. Other pervasive challenges include skills shortages and
crime. But despite these obstacles, there is little doubt that Africa is now open for business. n
Pratibha Thaker has directed the Economist Intelligence Unit’s sub-Saharan Africa team since 2000
INVEST IN AFRICA 2011
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