Africa projected to outpace Asia as world’s fastest-growing region
Africa is poised to become the fastest-growing region in the world, surpassing Asia, according to a new report by the Mo Ibrahim Foundation. The report reveals that six of the ten fastest-growing economies in 2023 are African countries.
Africa’s ready market of more than 1.4 billion people under the African Continental Free Trade Area (AfCFTA) has surpassed the European Union (EU) single market, US-Mexico-Canada Agreement (USMCA) and Southern Common Market (MERCOSUR) combined, the report states. The report, based on the United Nations Department of Economic and Social Affairs (UNDESA), highlights that Africa is the world’s youngest continent, and is projected to be the only region whose population will grow significantly from 2060.
Currently, the population in Africa is already twice that of Europe, with over 2.2 billion people. The report projects that Africa’s share of the world population will grow from 18 per cent to 38 per cent between 2023 and 2100. 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 there is no green global economy without Africa’s natural resources, which account for 30 per cent of the world’s mineral reserves, many of which are critical to renewable and low-carbon technologies. The Congo Basin is listed as the world’s first carbon sink, absorbing more carbon than the Amazon. It absorbs 4 per cent of global carbon emissions annually, offsetting more than the whole continent’s emissions.
The Atlas of Economic Complexity, the United States Geological Survey and the World Nuclear Association indicate that Zambia is the world’s primary exporter of unrefined copper, Guinea has the world’s largest bauxite reserves, and South Africa contributes 90 per cent of the world’s platinum group metal reserves. Additionally, 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, a far higher share than in any other region.
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 highlights that the future looks bright for Africa; however, the current global financial system does not meet Africa’s needs. More than a third or 40.4 per cent of Africa’s public external debt is owed to the private sector, with multilateral lenders (38per cent) such as the World Bank (16.4per cent), International Monetary Fund (8.2 per cent) and the African Development Bank (6.1 per cent) being owed the next most.
According to the report, over 70 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 concluded 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.
