Opportunities and Risks in Africa

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Phyllis Park
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2 Opportunities and Risks in Africa

3 Africa is not a country Note: Graphic layout for visualization only (some countries are cut and rotated) Source: Creative Commons.

4 Africa at a glance 212 Total GDP: $2.1 trillion Annual GDP growth: 5.7% Population: 1.8 billion Population growth: 2.2% Urban population (211): 4.4% Life expectancy at birth: 56.7 years Net official development assistance (21): 2.5% of GDP Sources: African Development Bank Group, Mapsofworld.

5 Africa weathered the financial crisis GDP growth (%) 8 7 Sub-Saharan Africa World Source: IMF World Economic Outlook.

6 Africa s GDP growth may soon surpass that of other developing economies GDP growth (%) Developing economies Sub-SaharanAfrica Advanced economies Source: IMF World Economic Outlook.

7 Africa dominates list of world s fastest-growing economies f Economy GDP growth (%) Economy GDP growth (%) Angola China 8.74 China 1.49 Ghana 8.55 Myanmar 1.35 Zambia 7.67 Chad 9.3 Rwanda 7.44 Nigeria 8.98 Niger 7.4 Ethiopia 8.39 Mozambique 7.34 Kazakhstan 8.31 India 7.33 Cambodia 8.5 Sri Lanka 7.14 Mozambique 8.1 Uzbekistan 6.86 Rwanda 7.82 D. R. Congo 6.85 Note: Statistics exclude countries that have less than 1 million population. Sources: IMF, Standard Chartered.

8 Africa s inflation and external debt show improvement External debt (% of GDP) External debt (left axis) Inflation (right axis) Inflation (%) Source: IMF World Economic Outlook.

9 Africa is rich in commodities Platinum Coal Nickel Copper Aluminum Oil Tea Gold Palladium Diamond Coltan Cocoa Share of world production (%) Sources: Standard Chartered Research, World Bank, BP.

10 Population explosion projected for Africa Share of world population (%) Africa China India Latin America Europe North America Source: United Nations.

11 Africa has a demographic advantage Working age population (% of total) 7 65 Europe 6 U.S. Latin America 55 Asia Sub-Saharan Africa Sources: U.N. Population Statistics, Standard Chartered Research.

12 Rising middle class in Africa Millions Sources: African Development Bank, Standard Chartered.

13 Savings and investment rising in Africa but still weaker than in developing Asia Percent of GDP Developing Asia savings Developing Asia investment Sub-SaharanAfrican investment 15 Sub-SaharanAfrican savings Sources: IMF World Economic Outlook, Standard Chartered Research.

14 Education improving but still lower than other regions Secondary school enrollment (% gross) Latin America East Asia & Pacific North America MENA Sub-Saharan Africa Source: World Bank.

15 Tech use rising but lags behind Number of Internet users per 1 people Person Latin America 35 3 East Asia & Pacific MENA 1 5 Sub-Saharan Africa Source: World Bank.

16 Favorable business environment in Africa Top rankings of ease of doing business index for Sub-Saharan Africa Top 1: Ease of doing business index Top 1 : Improvement in ranking ( ) Economy Ranking in 212 Economy Gain in ranking Mauritius 19 Lesotho 17 South Africa 39 Burundi 13 Rwanda 52 Sierra Leone 8 Botswana 59 Liberia 5 Ghana 64 Mauritius 5 Seychelles 74 Togo 5 Namibia 87 Guinea 3 Zambia 94 Angola 2 Uganda 12 Seychelles 2 Kenya 121 South Africa 2 Source: World Bank Doing Business.

17 Perceived top challenges to doing business in Africa Enforce effective anti-bribery and corruption initiatives Improve transport and logistics infrastructure Increase efficiency of customs procedures Improve access to local finance Improve system for trading across borders % of total survey respondents Source: Ernst & Young.

18 Business environment in selected African economies Ranking in ease of doing business (total of 185) Economy Ease of doing business rank Starting a business Dealing with construction Permits Registering property Getting credit Protecting investors Paying taxes Enforcing contracts Resolving insolvency Mauritius South Africa Equatorial Guinea Gabon Chad Central African Republic Source: World Bank Doing Business.

19 Africa s share of global trade is small Trade flow as percentage of global trade Trade (% of world total) Exports Imports Source: IMF World Economic Outlook.

20 But South-South trade flows are increasing Africa s total trade with other economies Trade (% of Africa total) Developed economies Developing economies Source: IMF Direction of Trade Statistics.

21 Asia gets increasing share of Africa s exports Africa s exports to other countries Exports (% of Africa total) 8 MENA U.S. 4 3 Euro zone 2 1 Developing Asia Source: IMF Direction of Trade Statistics..

22 FDI inflows have almost quadrupled in ten years US$ billions Inward Outward Note: FDI outward flow in 2 is not publishable. Source: United Nations Conference on Trade and Development (UNCTAD).

23 But FDI inflows are low compared to other regions US$ billions Euro area Developing Asia 1 Sub-Saharan Africa Developing America Source: United Nations Conference on Trade and Development (UNCTAD).

24 South-South investment in Africa Top 1 FDI new projects source countries investing in Africa (23-212) New projects, % of total United States United Kingdom France India South Africa UAE Spain Germany China Canada Sources: fdi Markets, Ernst & Young.

25 South Africa and Egypt are top FDI destinations Top 1 African FDI destinations for new projects (23-212) New projects, % of total South Africa Sources: fdi Markets, Ernst & Young. Egypt Morocco Nigeria Tunisia Algeria Angola Kenya Ghana Tanzania

26 Africa s bond market improves but sees small dip in 213 EMBI global index 1,2 1, 8 Europe Africa Latin America Asia Source: Bloomberg.

27 Comparison of GDP among African countries 212 GDP share of world total (%) South Africa Angola Ghana Cameroon Botswana Mozambique Chad Rwanda Source: IMF World Economic Outlook.

28 Kenya vs. the rest of the East African Community (EAC) US$ billions GDP Total of other EAC countries Kenya Population Millions 12 Total of other EAC countries Kenya Source: IMF World Economic Outlook.

29 Rwanda vs. the rest of the East African Community (EAC) US$ billions GDP Totalof other EAC countries Rwanda Population Millions Total of other EAC countries Rwanda Source: IMF World Economic Outlook.

30 Ghana vs. the rest of the Economic Community of West African States (ECOWAS) US$ billions GDP Totalof other ECOWAS countries Ghana Population Millions 35 3 Total of other ECOWAS countries Ghana Source: IMF World Economic Outlook.

31 Zambia vs. the rest of the Southern African Development Community (SADC) US$ billions GDP Totalof other SADC countries Zambia Population Millions Totalof other SADC countries 15 1 Zambia Source: IMF World Economic Outlook.

Africa at a glance. Annual real GDP growth ( average): 4.97% Official development assistance (2010): $48 billion

Africa at a glance. Annual real GDP growth ( average): 4.97% Official development assistance (2010): $48 billion Africa at a glance Population (212): 1,38 million Annual real GDP growth (25-212 average): 4.97% Official development assistance (21): $48 billion Net foreign direct investment (211): $43 billion Sources: