Patrick Low, Fellow of Asia Global Institute, says it may be time the world gave the African continent a second look.
In May 2000, the Economist magazine featured Africa on its front cover, characterizing it as the "hopeless continent" that owed a greater part of its misfortune to acts of man rather than acts of God. A little over a decade later, in December 2011, the front cover of the magazine featured Africa once again, with the words "Africa rising" and the statement that Africa had a real chance of following in the footsteps of Asia.
The contrast could hardly be starker. Africa's turnaround is surely one of the early twenty-first century's great economic and political stories. But it is one that has frequently gone unsung until recently. The core elements of the transformation were laid out recently by Sean Cleary of the Future World Foundation at a closed-door meeting among Africa specialists to discuss investment prospects on the continent.
Just for starters, the sheer size of the continent is astounding, accounting for one-fifth of the earth's land surface. China, India, the United States, Japan and large parts of Western Europe could all fit into the 55 states that make up Africa.
Economies on the continent have averaged more than 5 per cent growth per annum in the 2000s, well above the global average. This is in sharp contrast with the 2 per cent average registered throughout the 1990s. Ten out of the 16 fastest growing economies in the world since the turn of the century have been African.
Foreign direct investment inflows into Africa were a mere US$9 billion in 2009, rising to $54 billion by 2014. Africa's share of global FDI is less than 5 per cent. But not for long. At least half of recent FDI growth is undertaken with an eye to a rising middle class and fast-growing urban concentrations.
Fuels and minerals still account for a chunk of African merchandise exports. But diversification is afoot, with manufactured exports expanding four-fold since the mid-1990s. McKinsey estimates that only one-third of recent African growth comes from natural resources.
Africa's current population of around 1.1 billion is projected to double by 2050 and reach 4.2 billion in 2100, by which time 40 per cent of humanity will reside in Africa, up from 16 per cent today and an estimated one-quarter in 2050. A massive demographic dividend awaits Africa. Almost half of today's population is under 18 years of age. Imagine what this promises for the workforce and household incomes.
But much remains to be done. Today's progress is building from a low base. Africa's economic heft will only start to count globally in a significant way in another two to three decades from now. Moreover, not all Africa's 55 economies are on the same upward trajectory. Civil war, persistent poverty, failed coups, and disease still dominate prospects in some parts of Africa.
Physical infrastructure and human capital are lacking. The World Bank has estimated that Africa needs $93 billion a year until 2020 in order to close its physical infrastructure gap. There are also urgent needs for improved healthcare and education.
Another pressing challenge is governance. The Corruption Perception Index put together by Transparency International is based on 13 different surveys and assessments from a wide range of institutions. The 2014 index places eight African countries among the 20 poorest performers.
It must be said, however, that assessments of graft are subjective and often fail to capture subtler forms of corruption characteristic of richer economies around the world. Nevertheless, countries occupying the rump of governance indices tend to suffer from debilitating growth performances. They are frequently beset by socio-political strife, if not open conflict. Mountainous burdens of excessive regulation are all too often a dominant feature of the landscape in these economies.
But as physical and political barriers fall away among states, and the continent increasingly acts as one, Africa's dynamism will accelerate. It is high time that outdated perceptions of laggard status and prejudicial notions of backwardness yielded to the new reality. The African train is leaving the station.
This article first appeared in the South China Morning Post on September 30, 2015.
The views expressed in this article are the author's own and do not necessarily reflect Asia Global Institute's editorial policy.