2023-10-23 09:48:30
There is no doubt that Africa will be the major player in global growth in the coming decades due to the vivacity of its youth, its natural resources but also its potential in terms of the energy mix. This is what emerges from the latest report from the Atlantic Council, an American think tank specializing in international relations. This paper highlights that substantial investments in infrastructure and stronger engagement of multilateral financial institutions in Africa are likely to unlock the continent’s potential and make it a powerhouse of global economic recovery.
Indeed, report Atlantic Council experts, Africa can play a major role in revitalizing the global economy, thanks to its young and booming population, its abundant natural resources and its strategic geographic position. Titled “Africa’s Economic Renaissance – Reimagining the Continent’s Role in Revitalizing the Global Economy”, the report states that the global economy has entered in a long period of slowdown over the past two decades.
The average global growth over the period 2017-2021 stood at 2.4%, compared to an average of 3.7% during the period 1996-2000. For editors, the situation has become more difficult with the consecutive shocks linked to the coronavirus pandemic, the war in Ukraine, and rapid rate increases aimed at combating inflation. Combined with pre-existing structural factors, these shocks have created strong headwinds for the global economy and its growth prospects over the coming years.
In their analysis, they note that if nothing is done to revitalize the economy, the world would face a “lost decade”. Moreover, according to World Bank forecasts, the growth rate of global gross domestic product (GDP) is expected to fall to its lowest level in three decades, at 2.2% per year by 2030.
Demographic dividend
In this context, the report argues, Africa has a crucial role to play, thanks to its many assets and comparative advantages. While all regions of the world are affected by demographic aging, the share of the population aged 65 or over on the continent has remained barely 3% over the past four decades. With almost two thirds of its population under the age of 30 and 40% under the age of 14, Africa is the youngest continent in the world, the document reads.
This represents a huge pool of labor. The continent’s population is also expected to double by 2050, from 1.4 billion to 2.8 billion, providing a huge consumer market that will be the main driver of global demand for goods and services. On the other hand, Africa has abundant and very diversified natural resources.
In this context, the continent is home to nearly 30% of the world’s mineral reserves, 12% of oil reserves and 8% of natural gas reserves. In addition, the continent has the largest reserves of cobalt, diamond, uranium, platinum and rare earths. The importance of most of these elements to the global economy is growing rapidly, particularly in strategic high-tech industries such as semiconductors, electric batteries and clean energy.
Furthermore, Africa is also home to 65% of uncultivated arable land, making it essential to long-term global food security, as well as gigantic resources in the field of renewable energy. For example, installing solar panels on just 1% of the Sahara’s surface area would be more than enough to meet the electricity demand of Europe, the Middle East and Africa combined.
And last but not least, Africa’s strategic geographic position facilitates trade with all other regions of the world. The continent is, in fact, surrounded by seas and oceans on all sides. Of the 54 countries on the continent, 38 are coastal states.
In this context, the report estimates that Africa’s enormous potential might enable it to achieve very high growth rates under certain conditions.
Huge potential
For the American think tank, the room for progress in Africa is considerable. To this end, despite its limited natural and energy resources, Vietnam has, for example, managed to multiply its GDP sevenfold over the last 30 years (from $45 billion in 1990 to $332 billion in 2021). If Africa can achieve similar growth rates over the next three decades, it will have the potential to contribute $20 trillion to the global economy in 2050.
According to the authors of the report, these models are not unrealistic. Africa has already managed to triple its GDP from $900 billion to $2700 billion between 1990 and 2021. During the same period, Ethiopia’s GDP increased 7.6 times, which is more than the rate recorded in Vietnam. Ghana and Tanzania, for their part, multiplied their GDP by 5 and 4.6 respectively.
However, according to experts, robust, inclusive and green growth in Africa will not only allow hundreds of millions of people living on the continent to escape poverty, but also accelerate the rebound of the global economy. To achieve this goal, substantial investments in the continent’s failing and inadequate physical and social infrastructure are required.
This requires in particular a stronger and more coherent commitment from multilateral financial institutions on the continent, more balanced and more transparent cooperation agreements between African countries and other countries of the world and long-term partnerships with the private sector. .
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