When looking at the world as a whole, it is evident that each continent has it’s own growth trends which are ultimately determined by the economy as well as common global trends. This means that all countries will be influenced and affected in one way or another.
If we look at the way the African economy has evolved over the past year, it is clear to see that in 2016 the Ivory Coast was Africa’s fastest growing economy, known for its primary market being agriculture.
What’s more, 70% of the population was directly or indirectly employed in the agricultural sector, a prevalent trend throughout other African economies.
Most indicators suggest that agriculture remains the largest sector across the continent, and it is clear to see from the above statistic that Africa as a whole has initially been known for it’s agricultural industry more than its growth in technology, for example.
Richard Attias, a consultant and former producer of the World Economic Forum in Davos, is of the opinion that, “the countries that will be successful in 2017 are the countries which are diversifying their economies”.
Attias also believes that countries within Africa will enjoy growth in the coming years from other industries such as industrialization and manufacturing. He also states that that in the future it would be a proud moment to see ‘Made In Africa’ on product labels exported all over the world.
It is also important to consider other world events that will contribute to a shift in the economy. Brexit, for example, resulted in consequences for world economy, predominantly in the financial sector.
Forbes reported: “a big concern is the extent to which a retreat from financial risk will disturb the existing fault lines in the world economy”.
The question is, which are the industries that will contribute to Africa’s growth over the coming years?
It has been said by Harvard Business Review that ‘to unlock growth, companies should look for opportunities in six sectors that we find have ‘white space’ – wholesale and retail, food and agri-processing, health care, financial services, light manufacturing and construction.’
Within this there is one clear industry that is evidently evolving – and that is technology and the millennial culture that we are witnessing across the whole world.
Ultimately the biggest industry used on a global scale, technology can be classified by a number of different mediums. Whether that is iPads or androids, gaming apps or dating sites, technology use is consistently on the rise.
Smartphone use has doubled in Africa in 2 years (as of 2016), which is mostly due to their widespread availability and lower pricing. From looking at this statistic, it is also important to note that there has been a steady rise in the use of apps, which include (but are not limited to) dating apps, gambling apps, social media apps, news apps.
For example, gambling apps as a whole have heavily influenced the African economy, as Kenya currently holds the highest amount of betting youth. As stated by GeoPoll, Kenya has the highest number of youth who have participated in gambling or betting in the past at 76% followed by Uganda at 57%. Ghana has the least number at 42%. South Africa probably has the highest adoption of online gambling apps, which is hardly a surprise with so many mobile ready gambling sites targeting the market.
When correlated with the aforementioned smartphone use, a huge 75% of these bets are made via a mobile device!
This industry has predominantly been a huge source of income for the African economy, and it is still an area that consistently brings in revenue.
This may be due to the fact that Africa is not yet as ‘urbanized’ as its European and American counterparts. It was reported as far back as 2015 from The Guardian that ‘Agriculture will drive Africa’s rise to economic power’.
In addition to this by 2034, Africa will be expected to have a larger workforce than either China or India, as Africa has the advantage of a young and growing population, resulting in the fastest urbanization rate in the world.
Financial services – Banking
From a Western perspective this may not be the most obvious sector, but Africa’s banking sector has grown rapidly over the past 15 years, with Sub-Saharan Africa becoming a player in emerging-market banking. The total assets (as of 2008) came in at $669bn, whilst North Africa coming in at $497bn.
The rise of Africas’ financial services sector has been quoted as ‘remarkable’ by the World Economic Forum. Although not all countries within Africa are growing at a steady pace in this sector, it is obvious that this will not be an overnight transformation. The benefit is that it creates a lot of scope for future development.
Oil & Gas
It is known that where there is Oil, there is bound to be financial benefits in trading. By 2015, it was reported that 13% of global oil production would take place in Africa, compared with 9% in 1998. This growth has allowed various investments to take place due to the cost competitiveness in comparison with other countries.
In recent years, it is apparent that oil production has grown rapidly in Africa than any other region. It has also been demonstrated that Africa has natural gas reserves with 90% of the continents annual natural gas production deriving from Nigeria, Libya, Algeria and Egypt.
In any country, the development of infrastructure is crucial to a healthy economy. It is evident that infrastructure has been a key driver for progress in Africa. It contributes specifically to human development, and significantly to poverty reduction. As previously mentioned, as Africa becomes more urbanized like it’s Western counterparts, public goods should become easier and cheaper to deliver a more geographically concentrated population.
Although all the above industries as tapped into on a global scale, the benefit that Africa has is that its growth is less likely to be stunted with the level of investment it has received from other countries and governments alike.
Africa has the benefit of essentially being a ‘blank canvas’. Where it is in the process of being urbanized and having a more ‘western’ feel injected into it, there is room for growth and development, and not just in the above industries.
There is the opportunity for Africa to build on sectors and create small niches within them that can be unique. Who knows – maybe one day there will be a time where ‘Made In Africa’ will be a well-known term seen by all.