Once dubbed “the hopeless continent” by The Economist, Africa is now “on the brink of an economic take-off” says the World Bank.
With Europe being forced to expand its trading horizons much focus has been on the high-growth markets of Brazil, Russia, India and China, but Africa also offers huge potential for investment.
Here are three ‘lion economies’ giving the dragons and tigers a run for their money:
Following a decade of sustained growth, Ghana officially entered the ranks of the World Bank’s middle-income countries in 2011. The country’s broad base of economic activities (oil accounted for just 2.5% of GDP in 2011) makes it an increasingly popular export market. In fact, according to the Wall Street Journal’s Index of Economic Freedom, Ghana has a more open economy than any of the BRICs.
The 2012 Index ranks Brazil, Russia, India and China at 99th, 144th, 123rd and 138th worldwide, respectively, while Ghana is 84th. Economically free societies are defined as countries where “governments allow labour, capital and goods to move freely, and refrain from coercion or constraint”. No wonder foreign direct investment is flooding into Ghana.
The benefits of rapid economic growth are also being distributed, improving lives and living standards. Ghana has become the first sub-Saharan African country to achieve a Millennium Development Goal (a series of poverty-reduction milestones set by the UN) of halving extreme poverty by 2015. The country is also the only West African nation to be recognised as a ‘medium’ state in the UN’s Human Development Index – a measure that looks at life expectancy, literacy, school enrolment and GDP.
Home to self-made billionaire and Africa’s richest man, Aliko Dangote, Nigeria remains among the continent’s most dynamic places of business. According to US bank Morgan Stanley, the country is projected to overtake South Africa as Africa’s largest economy by 2025, with vibrant retail trade and increasing oil production driving growth.
“I would advise investors who would have liked to invest in Brazil 10 years ago to invest in Nigeria today,” said Nigeria’s Minister of Agriculture, Akinwunmi Adesina, at this year’s Standard Bank West Africa’s Investors’ Conference in Lagos.
Described as ‘the gateway to African markets’ and ‘the epicentre of Africa’s growth story’, Nigeria is also benefitting from President Goodluck Jonathan’s measures to fight corruption and boost domestic manufacturing.
Despite being locked in a 27-year civil war, Angola has delivered some of the world’s highest levels of growth since its ceasefire of 2002. Oil exports helped the country’s economy to expand by more than a quarter in 2005 alone.
And while growth has been dependant on oil, the government is keen to diversify the economy and attract private investment in the non-oil and gas sector, an effort that seems to be paying off.
In November 2011, Nestle built its first factory in Angola as part of a three-year investment programme. “We see a lot of possibilities in Angola,” said Nestle’s vice president of Asia Oceania and Africa, Roger Stettler, “it is an emerging market with a strong, growing economy.”
Unsurprisingly, the opportunities in Africa haven’t been lost on the BRICs themselves. “A generation ago Brazil, Russia, India and China accounted for just 1% of African trade,” says The Economist. “Today they make up 20%, and by 2030 the rate is expected to be 50%.”
The Economist, The sun shines bright, December 2011
This Day Live, Nigeria is epicenter of Africa’s economic growth, May 2012
International Trade, Forget the BRICs: 3 African economies to look out for, March 2012