30 November 2013

Africa: Four Predictions for Africa's Economy in 2014



Even though as a country we are largely inward looking, I believe our fortunes are inextricably linked with the rest of the continent. Here are my four predictions on what the year 2014 will hold for Africa.

1. A faster economic growth. The economic growth in the continent will continue to pace at more than five per cent. However, the key challenge will be how to make sure the economy translates to jobs that provide increased incomes, and not just a growth where only the elite and the super rich benefit. A report by the Ventures magazine not too long ago showed that the number of African billionaires is rising, and many are also undocumented, fuelling claims of ill gotten wealth being siphoned off abroad or hidden in safe tax havens.

2. An increased role of African Diaspora.

Whereas in previous years the Africans in the diaspora were viewed as traitors and sell outs, this perception is beginning to change. Many African countries are now actively embracing them to help build their economies, and most importantly, transfer the skills they learnt abroad to viable investments back in their home countries. While previously most such investment was conducted through relatives, some of whom conned the diaspora out of money, there is now a push to introduce diaspora bonds, and African governments and banks are creatively targeting this group with specialised investment vehicles.

3. An increased appreciation of African fashion.

African fashion is now making some headlines in the Western world, and in leading fashion magazines such as Vogue, Vanity Fair, and others. Even in Africa, the fashion designer is no longer viewed as an over glorified tailor, and they are being appreciated more. However, West Africa seems to be ahead, as in a country like Ghana for instance, there are specific days set aside for African fashion.

4. A rise in the middle class.

The number of middle class Africans is expected to increase to more than 200 million, a number that would make many companies salivate. However, as Ghanaian Bright B. Simons argues in a Harvard Business Review blog sometime back, this middle class is not one homogenous group, and marketers will need to especially tailor different products for them.

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