MGI - Lions on the Move: The Progress and Potential of African Economies

The McKinsey Global Institute recently published a study entitled “Lions on the Move: The Progress and Potential of African Economies” which brought some interesting facts and predictions for the future of economic development across the continent. The report’s findings were generally positive but noted that economic development is diverse throughout the continent and serious challenges pose significant threats to potential growth. Overall, the report explained that real GDP has risen by 4.9 percent per year between 2000 and 2008, more than twice the pace in the previous two decades and at one of the most rapid rates in the world.

The report argued that Africa’s accelerated grown was not solely a result of a resource boom, but rather “improved political and macroeconomic stability and microeconomic reforms.” The occurrence of violent conflicts has decreased overall, while stability has increased, creating better business climates and greater opportunity. Many African governments have also adopted progressive fiscal policies, lowering inflation, foreign debt and budget deficits, and thereby stimulating markets.

The future predictions of the report were generally positive, citing encouraging external and internal trends for the continent. Externally, the report cites “the global race for commodities, Africa’s increased access to international capital, and its ability to forge new types of economic partnerships with foreign investors” as the most promising developments. Internally, Africa’s labor force, urban populations and number of middle-class consumers are all on the rise. This leads for expectations that increased internal stability and demographic trends will place economic development on the continent in an upwards trajectory.

The report ends by asserting Africa’s increased importance in the global economy. More specifically, the sectors with the greatest growth potential are agriculture, natural resources, infrastructure and those that are consumer-facing. The report concludes with a word of advice: “Global executives and investors cannot afford to ignore the continent’s immense potential.”

MORE INFORMATION

The Full McKinsey Global Institute Report: http://www.mckinsey.com/mgi/publications/progress_and_potential_of_african_economies/pdfs/MGI_african_economies_full_report.pdf

McKinsey PodCast - Foreseeing the Potential Rise of Africa's Economic Lions: http://www.mckinsey.com/mgi/publications/assets/progress_and_potential_of_african_economies/index.asp

Overseas Development Institute Blog (many posts on African economies): http://blogs.odi.org.uk/blogs/main/default.aspx

New York Times Article “Report Optimistic on Africa Economies”: http://www.nytimes.com/2010/06/24/world/africa/24africa.html?_r=1

African Buisness News Video about the Role of the Private Sector in African Economic Development: http://www.youtube.com/watch?v=ejkG3JuE4s8

UNECA’s Economic Report on Africa 2010: http://www.uneca.org/era2010/

DISCUSSION QUESTIONS

1. Is African economic development inevitable? Or is it something that requires deliberate engineering?

2. Can Africa’s economic development be profitable, sustainable and responsible for all involved actors? How can African/American governments, people, and business work towards this?

3. What should the American government, businesses and individuals do to aid in the economic development of Africa? What should they be cautious of?

The Congressional Black Caucus’s 40th Annual Legislative Conference’s Foreign Affairs Brain Trust: Africa Forging Ahead

On Friday, September 17, 2010, The Africa Society attended Congressman Payne’s 40^th Annual Brain Trust entitled “Africa: Forging Ahead.” The conference focused on current challenges to peace, security, human rights, justice and economic development in Africa. These included barriers to development such as access to clean water, food and education, lack of suitable infrastructure, and gender inequalities, as well as current conflicts in Sudan, the Democratic Republic of Congo, and Somalia. Although the conference addressed sobering challenges to development the tone was positive and hopeful for future success.

Featured speakers of the conference cited numerous reports which showed promising results of foreign aid and investment on the continent. These reports will be further outlined and made accessible on this blog in the near future. Speakers encouraged the involvement of Africanists in evolving the general conception of Africa as a continent of conflict, poverty and despair to one that is diverse, dynamic, and progressive. In order for continued success on the continent, speakers emphasized the necessity of educating Americans about the progress that has occurred so that a positive outlook for the future may be obtained.

The conference concluded with a moving speech delivered by the President of Southern Sudan, Salva Kiir. President Kiir brought light to unique challenges of conflict in Africa, including the involvement of government and police in committing violent human rights abuses, and the silencing of victims and lack of accountability or justice. President Kiir thanked the American people and asked for continued support as his government anticipates a referendum for the independence of the Southern Sudanese in January 2011.

MORE INFORMATION

Prepared Remarks by USAID Administrator Rajiv Shah - The Truths About Africa: http://www.usaid.gov/press/speeches/2010/sp100917.html

Prepared Remarks by MCC Senior Advisor Cassandra Butts: http://allafrica.com/stories/201009180004.html

A news report (video and article) from France 24 on the January 2011 referendum for Southern independence in Sudan: http://www.france24.com/en/20100423-2010-04-23-1010-wb-en-reporters-south-sudan-darfur

DISCUSSION QUESTIONS

1. What sources do you generally derive your conception of Africa from? How might you determine the quality of information you are receiving?

2. What do you think is a good resource for keeping up to date on African issues? Do you have access to these resources?

3. Do you consider development in Africa to be more positive or negative? How did you come to your conclusion?

4. What do you think about the referendum for the independence of Southern Sudan? Do you think it will be carried out fairly and peacefully? What could/should the US do to ensure this?