The Next Asia Is Africa: Inside the Continent’s Rapid Economic Growth

American media have largely failed to pick up on these trends, hewing instead to their long-running traditional narratives of African violence and suffering to the exclusion of most other news.

By Howard W. French

LUSAKA, Zambia — The teenagers started arriving at the Arcades outdoor shopping center here just as the sun began to set. They took over the parking lot first, then the sidewalks. Within half an hour, the strutting and preening groups occupied just about every available pedestrian space.

Joshua Banda, a 15-year-old who wore green Converse All Stars with matching laces, sat with two friends at the edge of a gurgling fountain, surveying the crowds of girls. He proclaimed himself a fan of Lil Wayne and then told me he wants to be a lawyer.

Joshua’s parents moved to a Lusaka shanty when he was small. His father is a watchman, his mother cleans offices. Seeing Joshua’s education as the best guarantor of their own future, they saved from their measly earnings to pay for school for him and an older brother. Joshua has learned a bit about sacrifice as well, though of a different sort. Since he can’t afford a cell phone on his own — and since, in Lusaka, teenagers are nobodies without cell phones — he shares one with his best friend.

The new mall culture in Zambia’s capital, which I’ve watched expand almost exponentially in visits over the last three years, is booming all over Africa, in places like Accra and Dakar, Windhoek and Gaborone, Nairobi and Maputo. Driving it are young people like Joshua and his friends, a generation that is growing up like none that preceded it: a bulging new cohort of young people with disposable income, however modest, a keen and up-to-the-minute sense of youth trends and of consumerism around the world, and, most importantly, the expectation that life that will continue to get better and richer and fuller of choices.

Africa, with a population expected to roughly double by mid-century, has become recognized as the world’s fastest growing continent. But the less-told story is of Africa’s economic rise. In the last decade Africa’s overall growth rates have quietly approached those of Asia, and according to projections by the IMF, on average Africa will have the world’s fastest growing economy of any continent over the next five years.

Seven of the world’s 10 fastest-growing economies are African. The continent is famously resource rich, which has surely helped, but some recent studies suggest that the biggest drivers are far less customary for Africa, and far more encouraging for its future: wholesale and retail commerce, transportation, telecommunications, and manufacturing.

A recent report by the African Development Bank projected that, by 2030, much of Africa will attain lower-middle- and middle-class majorities, and that consumer spending will explode from $680 billion in 2008 to $2.2 trillion. According to McKinsey and Co., Africa already has more middle class consumers than India, which has a larger population.

American media have largely failed to pick up on these trends, hewing instead to their long-running traditional narratives of African violence and suffering to the exclusion of most other news. Corporate America, though, is proving itself increasingly attentive to Africa as a big new growth story. Big companies, from retail to technology, are approaching Africa as a promising new growth frontier. Many are already investing heavily there.

In March, a South African court approved Walmart’s $2.4 billion takeover of Massmart, one of that country’s largest retailers. IBM has opened offices in more than 20 African countries. In 2009, AES, one of America’s biggest private suppliers of electricity, became majority owner and operator of the national grid in Cameroon. In Ghana, a large American data processing company called ACS now employs over 1,800 people. And around the continent, Google is investing in web infrastructure and is launching search pages in a growing number of African languages.

The African Development Bank report defines lower-middle-class as those with a daily per capita expenditure of $2 to $20 in 2005 dollars, a threshold so low that skeptics worry it may have created some possibly premature exuberance about the continent’s improving fortunes. But the report’s authors point out that the definition includes other variables such as education, aspirations, and lifestyle. Throughout sub-Saharan Africa, investment in education has risen sharply over the last decade. Enrollment in secondary schools jumped 48 percent between 2000 and 2008, according to the United Nations, and higher education rates grew by 80 percent.

Isaac Nilongo, a 17-year-old in a plaid shirt with yellow highlights, had come to Arcades with his friends to see a movie at the five-screen multiplex, which that weekend was showing Transformers and Captain America. The high school junior hopes to become a pilot. He likes coming to the mall, he told me, because “it just feels good when you come out and see a lot of people just like you.”

When I asked him how he sees Zambia in the future, he paused to survey the lively mall scene around us. “It will definitely be different,” he said. “There will be lots more shops, and lots more goods. Sort of like this, but much better.”

Wealth and Poverty in Africa

The Guardian on Africa’s economic growth and the emergence of new middle classes:

At the end of another of Kinshasa’s potholed roads, lined with shacks and crumbling matchbox houses, comes a sudden clearing. It is a sandy patch of land surrounded by water in which bare-chested boys in dugout canoes paddle among the hyacinths. A giant pump is working day and night, reclaiming land from the sandbanks and river beds, expanding the city in defiance of nature.

Welcome to La Cité du Fleuve – River City, or “the new Manhattan” as this multibillion-pound development has been hopefully described by newspapers in the Democratic Republic of the Congo (DRC). Just 15 hectares (38 acres) now, but aiming for 380, it is perhaps the most ambitious statement yet about Africa‘s improving fortunes – and the promise of a growing African consumer class.

River City is backed by a British hedge fund that specialises in counter-trend betting and, says the developer Robert Choudury, “a bigger counter-trend is hard to find”. Ravaged by war and disease, DRC ranks bottom of the UN’s human development index. More than half the population is living on less than $1.25 a day and only 2% of roads are paved.

Please follow link to continue:

And this interesting Guardian graphic:

Africa’s New Engine: Looking to its middle-class consumers to drive prosperity.

ONE of the noticeable things across Africa these days is how many people have cell phones—71 percent of adults in Nigeria, for example, 62 percent in Botswana, and more than half the population in Ghana and Kenya, according to a 2011 Gallup poll.
Cell phone use has grown faster in Africa than in any other region of the world since 2003, according to the United Nations Conference on Trade and Development. Africa became the world’s second most connected region after Asia in late 2011, with 616 million mobile subscribers, according to U.K.-based Informa Telecoms & Media.
Of course, South Africa—the most developed nation—still has the highest penetration, but across Africa, countries have leapfrogged technology, bringing innovation and connectivity even to remote parts of the continent, opening up mobile banking and changing the way business is done.
Seeing the cell phone success, banking and retail firms are eyeing expansion in Africa to target a growing middle class of consumers. According to the African Development Bank (AfDB), one of the results of strong economic growth in recent years has been a significant increase in the size of the African middle class.
The middle class will continue to grow, from 355 million (34 percent of sub-Saharan Africa’s population) in 2010 to 1.1 billion (42 percent) in 2060, the bank says (AfDB, 2011a). And this middle class is the key to Africa’s future prosperity. (please follow the link above for the whole article.)

For Japan, a Long, Slow Slide

Blaine Harden – The Washington Post

Copyright The Washington Post
Washington Post Foreign Service
Sunday, February 3, 2008
TOKYO — As the United States frets noisily about a recession, Japan is quietly enduring a far more fundamental economic slide, one that seems irreversible.
This country, which got rich quick in a postwar miracle of manufacturing and alarmed Americans by buying up baubles such as Rockefeller Center, is steadily slipping backward as a major economic force.
Fifteen years ago, Japan ranked fourth among the world’s countries in gross domestic product per capita. It now ranks 20th. In 1994, its share of the world’s economy peaked at 18 percent; in 2006, the number was below 10 percent.
The government acknowledged last month what has long been obvious to economists and foreign investors, if not to the Japanese public and many politicians. The minister of economic and fiscal policy, Hiroko Ota, told parliament that Japan could no longer be described as a “first-class” economy.
“I have a sense of crisis because Japan has not nurtured industries that will grow in the future,” said Ota, who offered no specific remedies for the crisis.
Japan is still the world’s second-largest economy, as measured by gross size, although the island nation has been surpassed by China in purchasing power. In coming decades, the economies of China and India will dwarf Japan’s, according to many projections. By 2050, Japan’s economy will be about the size of Indonesia’s or Brazil’s, according to a study by PricewaterhouseCoopers.
Japan’s slide relative to other major economies is not a tabloid tale of suddenly squandered riches. It is rather an insidious petering out of growth, productivity and innovation — and of political will to stop the slippage.
The slide has dovetailed with another quietly insidious crisis — the petering out of the population. Japan has the world’s highest proportion of elderly people and the lowest proportion of children.
By 2050, population decline will have reduced economic growth to zero, according to the Japan Center for Economic Research. Seventy percent of the country’s labor force will have disappeared.
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