The negative perception of Africa in the world began to change in the 21st century with promising figures in economic growth and consumption, an increase in the middle class, some industry and agricultural development and an improvement in governance, among others.
Everything seems to indicate that such improvements and the enormous demographic potential predict an “African century”. But, developments on the ground are slow, and nothing has been consolidated yet.
Africa continues to be the continent with the highest poverty in the world, but it has had a boom never seen before with constant growth, thanks to the implementation of economic opening policies which has also led to increased foreign investment. Large companies are forthcoming thanks to some of these policies that defend private property and economic freedom and contribute towards security for investments. Between 2000 and 2018 Africa had an average growth of 6.2%, more than double the growth of Latin America.
In 2015, five of the ten fastest-growing economies were from Africa: Ivory Coast, Ethiopia, Tanzania, Rwanda, and the Democratic Republic of the Congo; all these economies grew by over 7%. What is the common denominator for these countries to develop? The reforms created by governments, greater economic freedom and the protection of private property. As an example, the Democratic Republic of Congo had more than seven thousand companies created, which has also had social consequences. Since 2000, life expectancy has risen by eight years, child mortality has been reduced from 17% to 8%, but still, its biggest problem is that there are more than 420 million people living in poverty.
Ganha and Botswana are other examples of progress. In Ghana, they built six mega shopping centers in six years, which is significant considering they only had one before, and foreign investment has grown strongly in recent years. In the case of Botswana, it has a GDP almost equal to that of Thailand which is impressive growth. We could add to this list Kenya, Uganda, Tanzania, Mozambique, and Zambia.
The Continent of the Future?
In recent years, Africa has been thought to be the continent of the future, which will be able to feed the growing world’s population and the only one that could supply countries like China, India and the USA.
But there is another side of the story. Despite the growth of these countries, poverty remains a huge challenge. Just as an empirical fact, Ethiopia has approximately 100 million inhabitants, and they have achieved high growth rates, but they continue to have distressing figures of roughly 20 million children with malnutrition.
Africa also continues to have the lowest GDP in the world, with areas such as South Sudan, Burundi, Malawi, Sierra Leone, Central African Republic, Mozambique, Madagascar and The Democratic Republic of the Congo averaging a GDP of only 350 dollars. In Zimbabwe, for example, the majority of the population is poor, they have one of the most substantial inflation rates in history, they became independent only in 1980, 15% of the population has HIV, and unemployment rates are some of the highest in the world. All this is primarily due to popular discontent, which has led them to a constant political crisis.
The vast majority of countries are indeed impoverished.
A large portion of the African population is engaged in agriculture and manufacturing, with most of the companies being informal because there is no confidence in business people or in the government. This, consequently, has led to a very high level of tax evasion…
The promising figures in economic growth in some parts of the continent need to be accelerated further.
On a widely used map of the world, Africa appears to be comparative in size to China, but the real size of Africa is much bigger! It is equivalent in area to all of Europe (except Russia and the Nordic countries), the United States, China, India, and Japan combined, really hard to imagine, but true.
Africa, Barn Of The World
According to the World Bank, seven of the fifteen countries that are increasing agricultural production are from Africa. Experts see the continent has the potential of being the “barn” of the world. The strange thing is that the United Nations have declared that this “barn” can feed the world as a whole, but this then prompts the following question: is it ethical to feed the world when there is still so much famine in the region itself?
This is why Africa needs to continue growing. China is a good example of a country that managed to open to the world, giving its producers the opportunity to successfully access foreign markets. Most of it has been done with the help of technology, with the development of companies like Alibaba. Since the 90s, China began to supply the entire world, but the most incredible thing is that they also managed to provide for themselves. Can’t the same happen with Africa?
It is incredibly likely that if Africa continues along this path of productivity and becomes a “barn” to the world, it will also be able to supply for its domestic consumption. More companies would be created with a steady growth of the number of SMEs, employment would increase, the middle class will continue to grow, and supply would be available to the world and domestically. This should continue to grow vertiginously, especially if some tools and education could be offered to producers so the population would be able to stand on its own feet and stop relying on charities.
Technology is an answer
Looking for ways to continue supporting the growth of Africa, I have always seen technology playing a role in the development of a society. That is why four years ago, together with my friend and business partner Juan Olea, we developed a very ambitious pilot, a B2B marketplace, similar to Alibaba, for African producers. As a result, in just four weeks 400 African food-producing companies were uploaded. The pilot plan allowed us to understand their needs for digitalisation, and to realise that there is a large number of producers with the ability to export, with the correct degree of knowledge and a desire to introduce technology into their small and medium enterprises.
It’s hard to understand how this has not been a priority for global innovative entrepreneurs, and I wonder, why are our great innovators-entrepreneurs more concerned with bringing a few into space instead of taking care of vast masses of poverty?
We cannot waste more time. It is true that since the report of May 11, 2001, where The Economist classified Africa as the continent without hope, Africa has grown substantially and is believed to be the continent of the 21st century, but there are still large amounts of famine, and above all, more than 400 million people in poverty who cannot wait. It is time to open innovators´ eyes so that we can help integrate this continent into the world economy in a limited time and help defeat extreme poverty that suppresses Africa.
Source : thefintechtimes.com
Keywords : Africa, News, Economy, Technology