A safari-themed title—“Lions on the Move: The Progress and Potential of African Economies”—heads the new report by the McKinsey Global Institute, the research arm of consulting titan McKinsey & Co. Its conclusion: “Africa’s economic growth is creating substantial new business opportunities that are often overlooked by global companies. Consumer-facing industries, resources, agriculture and infrastructure, together could generate as much as $2.6 trillion in revenue annually by 2020, or $1 trillion more than today.”
The report highlights the role of public policy—e.g., macroeconomic reform, conflict resolution, creating better business environments—as well as the rising middle class and its concomitant demand for goods and services. “So, what are you waiting for? Invest in Africa, already!” the report roars.
The Center for Global Prosperity’s Vijaya Ramachandran at the Center for Global Development points out that McKinsey is not alone in embracing an optimistic outlook for a continent long shrouded in pessimism.
For example, the forthcoming book by Steve Radelet, Emerging Africa: How 17 Countries are Leading the Way, discusses Africa’s advances in democracy and economic management, technological innovation and new generation of leaders, including entrepreneurs, whom he refers to as “cheetahs.” Radelet posits that these changes are “deep and fundamental” enough to sustain today’s economic victories.
Furthermore, the Boston Consulting Group’s report, The African Challengers: Global Competitors Emerge from the Overlooked Continent, identified the top 40 noteworthy African companies with international aspirations, analyzed the G-40, christened the “African Challengers,” hereafter referred to as the “A.C.s.” Half of the A.C.s are based in South Africa—e.g., Naspers, Shoprite, Vodacom—and all but five are based in “the African Lions,” eight countries—Algeria, Botswana, Egypt, Libya, Mauritius, Morocco, South Africa and Tunisia—that economically outperform the oh-so-acronymable BRICs. (Perhaps we should excuse the mammalian metaphors, seeing as ABELMMST is unpronounceable.) To illustrate, the 2008 GDP per capita of BRICs was $8,800; that of the African Lions was $10,000.
However, Ramachandran herself has reservations, particularly in regards to Africa’s nonexistent or dilapidated infrastructure, a concern also voiced in Lions on the Move. Using the example of power outages, Ramachandran demonstrates the necessity of scaling up transportation and power networks; only then, she argues, will Africa’s lions and cheetahs be able to roar powerfully and soar economically.
Indeed, the Center for International Private Enterprise also expressed concerns about Africa’s infrastructure, and lack thereof. CIPE highlights the “transition group”—countries unable to act upon their capacity to produce and export cheap goods e.g., Cameroon, Ghana, Kenya, Mozambique, Senegal, Tanzania, Uganda and Zambia. McKinsey explains that they have yet to succeed in establishing themselves as key exporters due to infrastructure bottlenecks, trade barriers such as high tariffs and corruption. CIPE stresses the importance of public sector reform and the role of civil society and the private sector in promoting good governance. Surely failure is unlikely in countries populated by lions and cheetahs and challengers. Oh my!