15 November 2012

Africa is on a Roll, Say Economists

Nairobi — Kenya is expected to ride on the back of rapid economic growth projected for Africa in the next four decades to emerge as a global economic powerhouse.

Economists project that the country will reap from a mix of factors that include a stronger democracy and political stability, improved conditions for doing business, the mobile telecommunication revolution and better human capital, to achieve this.

Charles Robertson, the global chief economist at Renaissance Capital and lead author of the book 'The Fastest Billion - The Story Behind Africa's Economic Revolution', has projected that by 2048, Kenya's economy is expected to be larger than the current size of Switzerland, Turkey, Indonesia, Korea and Mexico.

At the moment, Mexico is the tenth largest economy globally.

Speaking during the launch of the book at a Nairobi hotel, Robertson said that the mobile phone growth is likely to accelerate economic growth in Africa, adding that there have been half a billion mobile phone SIM cards sold in Africa over the last seven years.

"This is in a continent where only a few years ago everyone thought was too poor for people to have mobile phones," said Robertson.

He argued that Africa's economic growth would be similar to that witnessed in Asia, noting that at the moment, Africa is attracting more foreign direct investment than India and Bangladesh.

He said Africa's Growth Domestic Product (GDP) will be over 29 trillion dollars by 2050 from the current two trillion dollars if the current growth momentum continues.

"Strong democracies are dominating in Africa, while weak autocracies are the minority," Robertson argued, adding; "as countries get richer, they get better behaved and less corrupt. We get better when there is more money to go around. The best way to reduce corruption is by countries becoming richer and this is by attracting investment."

At the same time, the Managing Director of Africa Economics David Ndii said the future for Africa looked promising, having managed to overcome several economic and social challenges that held it back.

"One of the things that held Africa back and which was a strategic mistake by independence leaders was focusing on economic development as a priority instead of political development. The other reason that delayed economic takeoff was failure to invest in developing human capital. We are now seeing that the key dividends that the continent needs are now in place," Ndii added.

Yvonne Mhango, the sub-Saharan Africa Economist at Renaissance Capital, and one of the book's authors, said that while Africa is a diverse continent with different countries, they all are experiencing growth.

"There is an undeniable momentum of change across the continent," Mhango added.

The economists noted that African democracies are gradually becoming stronger and corruption is going down with. With one of the indicators of this progress being the few African countries classified as 'failed states' in the global rankings.

Renaissance Capital is a Moscow-based investment firm focused on Central and Eastern Europe, Africa, Central Asia and other high-opportunity emerging markets.

The book aims at advancing the good things about Africa to attract more investors and will officially start selling on November 20.

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