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Continent of hope

Aug 10 2012 07:50 Mzwandile Jacks

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FROM the time when The Economist unfortunately branded Africa "the hopeless continent" 10 years ago, a great transformation has taken hold in what was previously called the Dark Continent.
This week, the United Nations Development Programme (UNDP) said Africa's economic growth could surge to 7% in the next two-and-a-half years as investors of all sorts rush into the continent.

I agree with this sentiment, but what exactly is behind this projected explosion in Africa's economic growth?

Economic links between Africa and the rest of the world have surged impressively since 2000, inflation has sagged significantly in the past decade and foreign debts have declined.

Africa now has legitimate and self-made billionaires. Previously, well-connected cliques became billionaires after stealing from their countries' coffers.

This seems to have stopped, though many critics believe South Africa still has elements of this.

But this aside, the new African billionaires are the forerunners of hope. They are few in number but they are growing fast. They make sense to the logic that Africa's recent high growth rates are set to continue.

It is understood that from Ghana in the west to Mozambique in the south, Africa's economies are consistently growing faster than those of almost any other region of the world.  

Experts say at least a dozen have expanded by more than 6% a year for six or more years.

And a legitimate and genuine middle class is emerging. The Johannesburg-based Standard Bank, Africa's biggest bank by assets, says more than 60 million African households have annual incomes greater than $3 000 a month.

By 2015, this number is expected to reach 100 million.

What I find more interesting is the fact that Africans are now taking an interest in each other. SA Tourism says the number of travellers from South Africa to other parts of the continent has been growing steadily.

And the number of other Africans travelling to South Africa has shot through the roof. Connecting flights have improved.

African economic blocs have also integrated. The Economist says the East African Community, which launched a common market in 2010, is doing well; the Economic Community of West African States less so.

The Southern African Development Community has made the movement of goods and people across borders much easier.

It is my belief that foreign investors are no longer just interested in oil wells and mines but are also looking at consumer goods. This has spread investment possibilities for international investors.

Retail chains such as Britain's Marks & Spencer have doubled their African projects in the past three years. Walmart, the world's biggest general retailer, has acquired a South African general retailer, Massmart, in an effort to enter the African continent.

South African banks, insurance companies and food retailers now have assets in the continent worth billions of rands and some have been involved in several of the biggest leveraged buy-outs in the continent.

Economic change has made life more rewarding for Africans themselves. They have more opportunities to start businesses and get ahead than they have enjoyed in the past, and governments are showing some willingness to give them leeway.

That said, it is interesting to note that some countries, including the economic powerhouse South Africa, are showing signs that they might not meet their millennium development goals as the 2015 deadline looms.

This is too sad for words. But it is clear that the continent has embarked on a new direction and mission.

 - Fin24

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