According to EY, Africa has a promising future ahead, and could continue its growth path of the past 15 years. However, to do so, focus needs to be put on the future rather than on its current success. To achieve a consistent growth path, EY lists five priorities of action.
Professional Services firm EY recently released a new report entitled ‘Africa 2030: Realizing the possibilities’. The report, which builds on the firm’s Africa attractiveness series, argues that a tremendous progress has been made in Africa in the past 15 years. Looking at the Gross domestic product (GDP), the size of the African economy has more than tripled in 13 years, from 613.5 in 2000 to 2,091.4 in 2013, and is expected to grow with another 5% to 2,196.7 by the end of 2014. The biggest part of this growth is realised in Sub-Saharan African (SSA), where the economy is expected to be quadrupled by the end of the year.
“Africa’s rise over the past decade has been very real. While there are still a number of sceptics, we have developed a robust data- and knowledge base to help provide quantitative substance to support the ‘business case’ for Africa; the evidence of Africa’s clear progress is irrefutable,” says Ajen Sita, CEO at EY Africa.
According to EY, the economic growth and development is expected to continue, and will be driven by the growing levels of income of the burgeoning African middle class, increase in entrepreneurship and the investment in closing the gap in the infrastructure gap. Looking at the expected income levels, EY states that Africa has the potential to emulate Asia’s remarkable growth, and SSA is expected to reach the income level of emerging Asia of today by 2030.
EY states that focus should not only be put on the progress made, but more importantly on what it takes to continue on this path. “However, as important as it is to continue to provide evidence of the continent’s progress, it is perhaps more important to shift the focus towards the future of Africa, and what it will take to sustain and accelerate the progress we have seen over the past 15 years,” states Sita. In the EY report, the perspectives of several leaders with interests in Africa on its future and the key drivers of change and critical success are provided. The proliferation of mobile telecommunications is mentioned by many as one of the key factors. The convergence of technologies and the ability for these technologies to drive forward financial inclusion is also mentioned, as well as the efficiency of the government, trading opportunities, and the provision of healthcare and education.
The contributors also list several areas in which progress can still be made to continue and expand Africa’s growth. One of these areas is trade. Africa’s intra-regional trade is still substantially below what can be achieved due to specific legislation and regulations. The barriers of traditional subsistence agriculture are also mentioned, and the need to break down these barriers and the need to create large-scale commercial operations that are capable to meet the production objectives of an emerging continent. Another area of concern is the labour market, even though there is a big availability of future labour forces, there is also the issue of education delivery and the creation of skills that are appropriate for growing economies.
Five key actions
EY concludes its analysis with five priorities for action that it believes to be most critical for Africa to secure a successful future, as this future is not inevitable but at the same time not to be expected to happen overnight. An overview of the priorities: