A NEW report by the Mo Ibrahim Foundation predicts that Africa is on track to become the world’s fastest-growing region, overtaking Asia. The report reveals that six of the ten fastest-growing economies in 2023 are African countries. The African Continental Free Trade Area (AfCFTA), which boasts a market of more than 1.4 billion people, has already surpassed the EU single market, USMCA, and MERCOSUR combined, according to the report, which is based on data from the United Nations Department of Economic and Social Affairs (UNDESA).
Africa is the world’s youngest continent, and its population is projected to be the only one that will grow significantly from 2060. With more than 2.2 billion people, Africa’s population is already twice that of Europe. The report projects that Africa’s share of the world’s population will grow from 18 per cent to 38 per cent between 2023 and 2100, and Africa’s median age is the youngest in the world at 18.8 years, representing almost half of the world’s youth by 2100.
The report also notes that Africa’s natural resources are critical to renewable and low-carbon technologies, and account for 30 per cent of the world’s mineral reserves. The Congo Basin is listed as the world’s first carbon sink, absorbing more carbon than the Amazon, and offsetting more than the whole continent’s emissions. With the continent hosting 65 per cent of the world’s remaining uncultivated arable land, primary commodities, including agricultural products, accounted for more than three-quarters of Africa’s exports.
While Africa’s trading has shifted mainly towards the Middle East and Asia, the raw materials export model has remained the same. Since 2000, the EU’s share of Africa’s export market has dropped by a quarter, while China’s share has increased five-fold. Asia now represents almost 42 per cent of Africa’s exports and over 45 per cent of its imports, above Europe in both cases.
The report cautions that Africa’s future looks bright, however, the current global financial system does not meet the region’s needs. More than a third or 40.4 per cent of the continent’s public external debt is owed to the private sector, with multilateral lenders such as the World Bank, International Monetary Fund, and the African Development Bank being owed the next most. More than70 per cent of Africa’s public external debt is US dollar-denominated. Of the nine countries listed by the IMF as being in debt distress in 2023, eight are African.
The report concludes that Africa’s projected growth potential is based on its youthful population, abundant natural resources, and vast uncultivated arable land. However, the current financial system’s challenges may hamper the region’s growth potential.
