Welcome to IORMA Africa
The Future is Africa
Africa is poised to play a pivotal role in the global economy. The continent is home to the world’s largest free trade area of over 1.2 billion people and spending by African consumers and businesses is expected to reach $5.6 trillion by 2025. Although several long-standing challenges remain, Africa’s future reveals a positive trend. IORMA Africa will be the centre keeping track of the continent’s developments in society. We will provide our members with research, data, analysis and evidence-based reporting through our seamless digital based platform. Our content will forecast economic and policy decisions with a focus on Africa’s promising future.
FASTEST GROWING CONTINENT
More than half of global population growth between now and 2050 is expected to occur in Africa. By 2035, Africa’s population will be considerably larger than that of India (1.6 billion) or China (1.4 billion). In sharp contrast, the populations of a considerable number of countries are expected to decrease by 2050, of which 26 may see a reduction of at least ten per cent. According to data released by the United Nations (UN) several countries are expected to see their populations decline by more than 15 per cent by 2050, including Bosnia and Herzegovina, Bulgaria, Croatia, Hungary, Japan, Latvia, Lithuania, Republic of Moldova, Romania, Serbia, and Ukraine. Fertility in all European countries is now below the level required for full replacement of the population in the long run (around 2.1 children per woman), and in the majority of cases, fertility has been below the replacement level for several decades.
WORLD’S YOUNGEST CONTINENT
Roughly 60% of Africa’s population is under the age of 25, making Africa the world’s youngest continent. A Financial Times survey conducted in 2019 found that two-thirds of Africa’s youth have regular access to the internet; and that, if given $100, half would start a business; and that 82 per cent think they will be better off in two years. These prospects oppose the prevailing global view of African youth as frustrated at the lack of job opportunities. African youth are taking more risks than ever before and are building phenomenal businesses that are providing critical solutions to the masses and seek to disrupt traditional norms. It has been widely accepted that young people are at the heart of Africa’s development agenda and challenges the continent face in providing adequate education, healthcare, housing and jobs are most acutely felt by this demographic. With the coming surge in population growth, these critical services will be in greater demand in the nearing future.
TRADE & INVESTMENT
Trade is central to development in Africa and the ease of doing business is improving in both the public and private sector.
In January 2020 the British Prime Minister Boris Johnson laid the foundations for new partnerships between the UK and African nations based on trade, investment, shared values and mutual interest. The inaugural UK-Africa Investment Summit was the Prime Minister’s first international gathering and he used the occasion to announce to the world that it is the UK’s ambition to be the investment partner of choice for Africa.
During October 2019, at the first Russia-Africa summit in Sochi more than 3,000 delegates from across Russia and Africa participated in the dialogue. According to a Kremlin advisor, all African states sent a representative to the meeting, including 43 heads of state or government. On the side-lines of the meeting Russian President Vladimir Putin said: “We currently export to Africa $25 billion worth of food — which is more than we export in arms, at $15 billion. In the next four to five years I think we should be able to double this trade, at least.”
According to the International Trade Centre the EU27 is the biggest goods exporter into Africa with a total value in 2018 of nearly $170bn. The figure is 14 times the $12bn for the UK and nearly double the $90bn for China. Beyond trade, the EU is the biggest investor in Africa. Pre-Brexit EU investment stocks totalled $311billion, representing 40% of foreign direct investment in Africa.
Prosper Africa is a new investment initiative seeking to build on the two-way trade between the United States and Africa. In 2019 it replaced the African Growth and Opportunity Act. Prosper Africa focuses; on modernizing trade and investment centres across the African continent and the United States, supporting public and commercial transactions by facilitating and expediting deals and managing their risk and partnering with African governments to foster business climates that are mutually beneficial for Africa and the United States. The combined total value of African trade with the U.S. in 2017 was just $39 billion, making it Africa’s third-largest trading partner behind China and the European Union, according to figures compiled by the U.S. agency USAID.
China has become the central player in Africa’s urbanization push. China is now Africa’s biggest trade partner, with Sino-African trade topping $200 billion per year. According to McKinsey, over 10,000 Chinese-owned firms are currently operating throughout the African continent, and the value of Chinese business there since 2005 amounts to more than $2 trillion, with $300 billion in investment currently on the table.
African Continental Free Trade Area (AfCFTA)
The AfCFTA agreement will create the largest free trade area in the world measured by the number of countries participating. The pact connects over 1.2 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. It has the potential to lift 30 million people out of extreme poverty.
Africa is home to a wave of digital entrepreneurs who aim to transform the continent. The rapidly evolving IT ecosystem has coincided with the arrival of high-speed internet and access to affordable Chinese smartphones. New technology spreading through vast swathes of the continent allows residents to buy groceries, clothing, and other goods online. Africa’s late arrival to the digital economy has attracted the attention of Silicon Valley tech giants including Alibaba, Facebook, Google and Twitter.
Juliana Olayinka is the Director of IORMA Africa
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