By Charles Robertson, Special to CNN
Editor’s note: Charles Robertson global chief economist for Renaissance Capital and lead author of ‘The Fastest Billion: The Story Behind Africa’s Economic Revolution.’ The views expressed are his own.
The rise of Africa’s long forlorn economies – what we at Renaissance Capital have dubbed “The Fastest Billion” – represents the final phase of a global economic transformation that began over 200 years ago as agrarian societies saddled with absolute rulers began their journey through industrialization into the pluralistic middle-class societies increasingly driven by the information age we know today.
For many reasons, Africa largely missed out on this journey. But no longer: while the process will not be complete by 2050, a changing set of global and local realities suggest that Africa is set to be the final beneficiary of this revolution.
Over the past decade, the billion people who live in Africa have experienced the fastest growth the continent has ever seen, and many of its countries (Nigeria, Ethiopia, Mozambique, Guinea) are among the fastest growing in the world. A growing body of evidence backs our view that as Africa’s population doubles to two billion over the next several decades, its GDP will increase from $2 trillion today to $29 trillion in today’s money by 2050.
To many in the West, such figures beggar belief – just as similar projections for East Asia’s Tiger economies or Latin America’s star performers did in the 1980s. The idea that Americans and Europeans would drive around in South Korean automobiles, or fly around in Brazilian-made jetliners, would have brought great guffaws from experts of 1980. But today, Hyundai, Kia and Embrear are household names. Things change quickly when certain tipping points are reached. We believe Africa has reached such a point.
More from GPS: How Africa could feed the world
By 2050, assuming a conservative trajectory similar to what India achieved since 1990, Africa will produce more GDP than the United States and eurozone combined do today, and its basic social, demographic and political realities will also be transformed. The necessary elements that have propelled countries from late medieval commerce with authoritarian government through to industrialized nations with comprehensive and far-reaching social and legal institutions are well known.
A continent rich in natural resources – mineral, agricultural and in energy – Africa is also rich in the youth of its population, enjoying a demographic advantage over all other regions of the world.
The pace of technological innovation globally is now so rapid, and technology is so easy to transfer – as evidenced by the boom in mobile phone technology and the roll-out of broadband across the continent – these young Africans are not only the recipients of technology, but via M-PESA banking, are becoming exporters of it, too.
Today, Africa has the greatest room to boom on the back of two centuries of global progress. The take-off in Africa began around the turn of the century, 40 years after independence. Why not earlier? Because human capital was extremely constrained by a lack of primary and secondary education, while global capital could find better opportunities in East Asia and Latin America. Political leaders in the 1960s and 1970s were inexperienced, often self-serving and were offered contradictory advice on how best to develop a country. There were no strong Asian role models to emulate. International involvement in Africa was too often geared towards Cold War geopolitics, feeding civil wars and strife, rather than trade and investment.
What has changed? Many governments have learnt from their mistakes and seen the positive reform examples not just in Asia, but more importantly in Africa itself, from Mauritius to Botswana and Cape Verde, and now Ghana to Rwanda. In most countries there has been no single reform miracle, like China’s in 1978 or India’s in 1991, but rather a series of small steps which taken together have been just as powerful.
Stronger growth and good public finances – Africa’s numbers are far better in this regard than those of Europe, the United States or Japan – have helped draw in record levels of foreign private-sector capital. But the improvement shows across the board – in primary and secondary education, in health, personal security, transparency and governance.
The headlines of the day may not support this – war rages in parts of Congo and Sudan, poverty and corruption stain too many of the continent’s peoples. Such are the stuff of headlines. But today we count around 30 democracies across the continent, some strong and immortal, but many fragile and still vulnerable. That number will grow.
Today the continent is reaping the benefits of high commodity prices and exports to China to begin the process of infrastructure investment that accelerates growth. Each year, in the oil sector alone, a major new discovery is heralded, from Ghana to Uganda and most recently Kenya, pushing Africa’s share of world oil reserves to 10 percent. African oil production growth has already been the fastest in the world over the past 10 years, all of it in sub-Saharan Africa (SSA). Africa now produces 10m barrels a day, as much as Russia or Saudi Arabia, with the 6m barrels of SSA alone worth $235 billion of oil revenue annually or 20% of 2011 GDP. Renaissance expects volume increases to ensure this tops $300 billion even with no change in oil prices by 2019.
Nearly a trillion dollars of oil revenue every three years means unprecedented inflows of foreign exchange to fund imports of investment and consumption goods. Rapid economic growth means growing African demand for resources. Do not be surprised if Nigerian steel consumption rises from 1.6 million tons annually today to 115 million tons annually by 2050. African motor vehicle sales of 8 million by 2020 may reach 14 million by 2030, higher than the U.S. today. Who knows – someday you may find yourself driving a Nigerian auto and dialing hands free on a Tanzanian-made phone. It has all happened before.
© 2012 Cable News Network. Turner Broadcasting System, Inc. All Rights Reserved.
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While the US is becomming more and more stagnant as the result of policital gridlock, the other countries of the World progress with investments in infrastructure and education. Not looking good for our future.
Maybe someday unemployed, white, US college grads will be sold to African plantation owners as slaves. What goes around . . .
gfy.
you are a freakin a hole....just die
Get over the slavery issue. My generation is not responsible. As a person you should accept other people not label them as blacks or whites. No wonder we stil have racial tensions in this country. MLK would be disgraced of your comment, a colorless society means just what it states.
Who knows what Doogiebek's ethnic background is? I'm a white guy and I think his comment is very funny. He could be a white guy too. Why would I take it so personally as others? it's just a joke not a desire.
Yeah, he didn't mean anything by that. Just a joke.
The author has generalised the developmet in Africa, which is a huge continent with over 50 sovreign states, 3.000 ethnic groups, 1.500 languages, various cultures and religions. It's a living exemple of diversities and inequal distribution of wealth and natural resources. Yes, the living standard in urban areas have improved dramatically and the rest is still lagging behind. If any of the country there is looking for a role model, it wouldn't be an American or European one. Indeed we will see new political structures and governances emerging from this continent.
Nah. But if they go, give them affirmative action and a gun.
excuse me. not just a gun but an assault rifle
this is the next unexploited cheap labor market where our jobs will soon be going. just like india and china.
Your generation may not have done it but a lot of white families are living very nicely because of it. But hey water under the bridge while my race lives in horrible conditions still within the US.
The economies around the globe will stabilise, in the mean time, I wish the African people the very best of luck in growth and prosperity.
Kenya should be booming, they all are probably getting welfare from the USA.
You are stupid. Not everything is about the US. There's only 316 million people in the US. There more than 7 billion people in the world. Just like a useless, blogging American to think they carry the weight of the world and nothing to back it up. Prove your point and I'll recant my statement. Furthermore, Kenya is a Democratic Republic just like the US, with a President and a judicial branch. That public education really did you well didn't it.
while everything you said is technically true, the fact remains that America is huge economically and militarily. When we vote for our president, the whole world watches and wonders, because they are all affected. It will be like this for the foreseeable future.
The "welfare" it gets from US actually comes from China – since the Americans are in debt to the Chinese. It might as well come directly from China – since they are now the source for much of the capital. African countries are beginning to align themselves to the real source -China.
This is kind of obvious; with China and many of the other Asian countries facing greater local scrutiny and technological progress, where else would one find cheap labor to maintain Walmart's low prices? Why Africa of course!
I believe this is one reason why the United States is paying greater attention to the African theater, regardless of conspiracies about President Obama's loyalties. Made in Africa is the future of low cost commodities.
I've read articles like this every five years for the past 30 years. It's true that Africa is the one remaining truly low-wage location for outsourcing opportunities, and that's good for Africans and companies that hire them. But corruption, tribalism, AIDS and Islam will continue to combine to hold both northern and southern Africa back.
Yes, Jim. Nothing happening here in Africa! Please stay away. More cake for the boots on the ground here. 54 countries here, not all in dire straights like you believe. Uhhh...but yet stay away...oooohhh it's so bad here! LOL!
jim is right
The more money they make there, the more money they'll spend both there and elsewhere. Africa is rich in natural resources and can use it to their advantage for the advancement of their people. I think Africa should overturn their government just as they did in the US. Now, even through an economic recession in the US, they have been able to maintain their power. More countries with oppressed people should follow suit.
Overturn their government? You know there are 54 countries here right? Your ignorance is on full display.
what a minor point, you know what he meant.
Oh, dear.
"Should overturn (sic) their government." Um, of the SEVERAL DOZEN very distinct SOVEREIGN COUNTRIES on the CONTINENT of Africa, which one do you think should "overturn" their government? I don't think there's such a thing as the Government of Africa.
And who, pray tell, is the 'they' in the US that they (those Africans) should be emulating, exactly what did they "overturn" and when did this overturning happen?
Maybe I missed something.
Or several things.
you trolls have nothing to add, so you pick on a such a minor point. lame
In addition to human capital, Africa has another strategic advantage – natural resources. Many people in the West are unaware that manufacturing of smartphones, tablets, processors, etc. requires exotic minerals that are found primarily in Africa. The major obstacles to development are political – corruption is still unacceptably high and tends to drain the profit from potential foreign direct investment.
Yes, there will be a market for cheap labor, but as in other developing industrial economies (think China, India, Southeast Asia), as the middle class develops they will demand higher wages and quality of life.
Will never happen as long as the place is full of Africans. They still haven't moved beyond the mentality of their tribal ancestors.
Rob, you are very stupid! Do you think you are better than Africans? Not only are you a racist but also an idiot! Have you ever been to an African country before? I detest shallow-minded people like you who think they are better than people of different origin.
"shallow minded?" I've been to Africa......There is a reason it is still in the stone age in 2013. Rob is correct.
Did you go to one country or went to all 54 countries? Or you just don't know the difference between a country and a continent? I guess you are one of the many people who think Africa is a country.
no one said anyone was better, fool. We all know that culture can hold progress back. That is no exception in Africa.
ddzd – "Will never happen as long as the place is full of Africans. They still haven't moved beyond the mentality of their tribal ancestors." Does this imply culture is holding Africa back? So, if the place becomes full of Americans then Africa will be a better place? See who is the fool here.
Rob, on behalf of EVERYONE, we can't thank you enough.
BRILLIANT.
And ossum, too.
I see rob has got supporters of his crazy brilliance. In the past, lowlifers like yourselves never believed global economic power like China and others could emerge, and so it was thought during the reign of rome, Germany, etc. I'm sure you don't understand reality, you only hold onto images of the past. I see those tall buildings and wide roads have stalled your thinking faculty. Well, let me tell you in clear terms: wether you believe it or not, the US will soon be history like its predecessors. Sorry, not my fault. I only pray you live long enough to see it happen.
US foreign aid to Kenya is $687 million. It's higher for Mexico by another $100 million. As a product of US wealth this is not a great deal of money. To characterize it as "welfare" is highly inaccurate. US welfare programs, a form of internal aid, eclipse any funds going to aid other nations. The US will be able to afford foreign aid far longer than domestic aid if the economy stays on course. And nobody in Washington seems to have any interest in changing the course. Not even Mr. Change himself!
Grobbbbbbbbbbb
No-strings attached "welfare" for Egypt and Israel: FOUR THOUSAND MILLION a year. Each. That's four Billion-with-a-B.
Total value of U.S. hundred-dollar bills "lost" in a SINGLE shipment (shrink-wrapped, on pallets) to Iraq on C-130 aircraft?
TWELVE THOUSAND million. No, really. TWELVE BILLION. Google it: "twelve billion missing Iraq shipment."
LOST. And nothing got investigated, probed; nobody went to jail, lost their job–nothing. It's just f*****g GONE. Nobody CARES. We're "over it." 'Kay?
Corporate WELFARE (what *else* would you call it?) to U.S. War Industry? Take U.S. annual budget and multiply by ONE-HALF.
Your turn. We're all ears.
Every nickel of that money was accounted for. Get a life.
A C-130 weighs, not carries, around 175,000 lbs, giving you the benefit of the doubt of the heaviest version. A hundred dollar bill weighs one gram. Therefore, you'd need ~454 to reach one pound. Using this math, 12 billion dollars, in hundred dollar bills, not accounting for anything else, weighs 264,000 pounds. No C-130 carried greater than its own weight in money without being fueled entirely in tin foil hats.
For your information 95% of Kenya's budget is financed from Kenyan local taxes, so its not like Kenya's economy will ever collapse because of lack of US AID. The 5% is (all foreign Aid) so all foreign countries. Most of the money you quoted probably never even leaves US. It's common knowledge the games your Aid agencies play in the African Aid game. First start with their salaries and administrative expenses. Even the food Aid most of the food is bought in US or other western countries instead of forexample other African countries with food surpluses so the money never actually benefits Africa. Most of the Aid agency staff drive expensive vehicles and live in the most expensive areas it the Countries they do their Aid work in.
Great article! Here are, however, few pins that are likely to burst this bubble if not looked after:
* income inequality (Nigeria comes in 1 st, but is definitely not the only one),
* Rising prices (Angola),
* Youth unemployment (Ghana, South Africa),
* Overpupulation (Rwanda),
* Shady massive land reforms (aka Land grabs) (Ethiopia)
* Insecurity and corruption, I hear and I hope, will soon be a thing of the past
A massive influx of oil dollars, or, as it's usually pointed out, the fact that a number of African business folk can afford a shopping spree in London or Dubai, are not necessarily indicative of a healthy and sustainable economy!
Sure things are improving, but FOR WHOM and for how long? Are the foundations strong? Are record numbers of University graduates worth much if there are no jobs, no land, no credit available to them?
Here's to hoping that the numbers shown above are at least, the beginning of an era that will leave a positive and lasting imprint on our continent!
That's fine and dandy but are there only a few benefiting? Hope it translates into improving the quality of life for regular normal workers. Currently the world's hunger for resources and cheap labor are insatiable. It was only a matter of time before they moved on to the African countries.
Al quada will make sure it doesn't. they need to keep the population uneducated and without resources in order to dominate them.
No, no, no!
You've got Al Qaeda mixed up with the GOP!!!
big difference between those two
it is the next big unexploited labor resource where all our compassionate executives will be shipping our jobs next.
And there is no amount of threats or legislation that will stop them. We need to accept the inevitable and move on.
We saw it coming.
And China saw it years before us, and has made inroads in Africa, not just to sell, but to get the vast natural resources.
China may have such a large head start and massive financial resources and growing military resources that the western world, particularly the US, might not be able to catch up, particularly with a Congress that cannot function effectively to make wise national policy.
We will never "catch up" to China. We are nation on the decline, and that trajectory will not change.
What? Chinese crap getting too expensive???? Hahahahahhahaahah
Yet another bastion of cheap labor. Look out China you could be undersold in no time.
I fear Africa is too like the Arab countries, too busy killing each other to make real progress.
And while the African economies boom, the good old USA gets poorer and poorer. Soon, they will start singing Africa for USA...we are the world, we are the children...there are people starving in the Good Old USA...
This article neglects the most important outside factor contributing to this wonderful tipping point – china. After centuries of colonial pilfering and decades of disingenuous western aid, foreign trade with china has surpassed that of any western country recently. Their non-dogmatic and negotiated methods treating Africans as adults capable of deciding for themselves what deals to pursue, i.e. their relationship is consensual, has led to key infrastructural growths which western countries failed to do. Of course the west will ride the coat tails now that the growth has started.
The Only Things that have Ever BOOMED in AFRICA are KIDS & GUNS.
A looming irony is that, just as cheap Chinese labor is taking jobs from the U.S., so cheap African labor will soon take jobs from China. Until there are no poor, cheap laborers in the world, lower-skilled, labor-intensive jobs will always move to the least expensive nations. And as that happens, the increase in standards of living shifts temporarily from the "haves" to the "have-nots". Prosperity is a wave sweeping across the planet over the past 200 years. It will be interesting to see what happens when there are no more poor nations in the world.
Sid
People will be riding jetpacks to work and eating Soylent Green by the time that happens.
Wow there is a level of liberal ignorance going on here that's stunning even for you retards. Uganda, Angola and Mozambique are very successful countries now. They are doing great. Even some of West Africa is starting to show progress. The Horn, All of North Aftica, the Congo are horrid. Always have been and probably always will be.
and even if you have valid points the instant you start with the divisive childish calling people retards YOU personally lose ALL validity
Liberal ignorance is like powdered water... it just can't happen. Conservative intellect is like dinosaur droppings... old and fossilized.
that, sir, is a false analogy and is an illogical argument
Africa is also rich in the youth of its population.......... or life expectancy is very, very, VERY low
the article has great points but is written from a chearleaders perspective and this particular gem was too much, trying to spin the horrid systemic health issues in to a positive "youthful" populace is tragicomic and orwellian.
It will be interesting to see if Africa can hold onto its cultural and historical heritage while Islam ferments in their midst.
"Nearly a trillion dollars of oil revenue every three years means unprecedented inflows of foreign exchange to fund imports of investment and consumption goods."
This worries me because while Africa gets trillions in oil revenue for instance, we are getting exploited by Chinese businesses and foreign investments and their subsidiaries meaning majority of the earned trillions isn't going back into the African nations. and if it does due to corruption the earned money circulates among top governmental officials. nothing goes to the people which goes to support why Africa with its rich resources remains impoverished, poor and under developed. This has to change
People keep saying China is helping, they are exploiting, even bringing in their own workers. I do hope some of that money goes back to the local people or it helps their economy somehow and not just going into the pockets of a few.
If China supply money and Africans do all the work, the project will fail as all the IMF and world bank projects. The Chinese work 7 days per week and done in months not decades. The instant infrastructure benifits African masses for fast growth.
The corruption existed, if there are jews among Africans.
If Africa is going to "boom" economically, it must do it SUSTAINABLY. They need to learn from other countires' mistakes (USA, Europe) not to become completely dependent on oil and other fossil fuels. We should help them learn how to do this by sending evironmentalists, economists, and sociologists over there.
What this article is predicting will never happen. There are cultural elements like the brokerage economy (If I get you a job, you owe me 50% of your salary) and other deeply inculcated value programming that goes counter to the democratic ideal of the uplifting of an entire people. The whole cultural meme of Africa is to raise yourself, your family and perhaps your ethnic people while putting your enemies down, It will take several generations and massive social upheavals to fight this cultural and value programming. Africans see success as a zero sum game where you always have to have losers for every winner.
OK, first of all this is written by a guy that works for an investment firm, probably very heavily invested in that region, so... Second, by "boom" he proably means bomb explosions created by the ever increasing Islamic scourge on that continent. Between the mussies and the native warlords committing genocide, that place doesn't stand a chance.
Just wishful thinking here .....Africa is simply too corrupt and self-serving to succeed. Human nature is a hard thing to overcome, and I don't believe that Africans have the will to overcome it.
As if a dictator from any North or Central African country would let an ounce of prosperity slip out of his own grip to his people.
I love it!
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After reading through the vast number of ranging responses here...I can't help but wonder:
Who has actually been to more than one part of Africa in the past 3-5 years?
Its sad that most readers here would rather live in denial of facts than to accept progress for Africa however little.It is true that there are many hindrances to development in Africa and mostly due to cultural diversity and hence tribalism.There is also the issue of colonial legacies.unlike many western countries most African countries have been independent for less than 50 years meaning while most western countries are 200 or so years old most African countries are 50 or less.Then the childlike state that Africa has been accorded puts it in a constant beggar like situation.foreign aid is the biggest enemy of Africa.statistics show that the biggest foreign aid recievers are the most corrupt countries.it kills innivation.Africa should refuse the aid just like China and singapore did and then painfully but surely soar up.
Thom Browne, Jason Wu and Apple have new production lines. We may have to learn Swahili.
thats kool.
Do you know why?
Europe's economy and High-Techs grew, after Jewish left to America, with full packed ill-packages. The consequences became, terrible for America. It keep loosing friends.
Africa started grew, after Jewish left.
Any growth in Africa so far is mainly due to natural resources.This kind of growth can be unhealthy because it does not require that the population improves itself. It gives too much power to the rulers and power corrupts.
"Any growth so far is mainly due to natural resource" As I know places like Rwanda with almost zero minerals and yet they are able grow their economy by 11.3%( expected 2013 within 2013)I disagree with Tom and I think it has to first deal with a good governance (Zero tolerance to corruption and women empowerment) – Rwanda being a good example.
2050 is way far yonder.I believe it will be sooner.
Africa is a CONTINENT with 54 countries