Young men and women chat along the glittering corridors of the sprawling shopping complex. With state-of-the-art mobile communication gadgets in hand, they go in and out of the mall’s 65 shops, filling shopping bags with expensive items. There is a large and well-equipped children’s playground at the back. Fully air-conditioned, the mall has 20,000 square metres of retail space, a theatre, restaurants, bars and parking for 900 cars. Welcome to the Accra Mall in Ghana, one of West Africa’s best — and comparable to any mall in the world.
In Ghana, as in many other African countries, young people are living out the continent’s economic growth. They are educated and relatively well-off, as seen in their cars, dress and homes. Ghana’s economy grew by an impressive 14.4% in 2011, while many African economies are expected to be among the world’s fastest-growing in 2012, according to the World Bank. Ghana, Liberia, Nigeria, Ethiopia, the Democratic Republic of the Congo and others will lead the charge.
Undoubtedly Africa is still bedevilled by poverty, with half of its people living on less than $2 a day. However, its economic growth over the past decade has been striking.
A hopeful continent
“There is a new story emerging out of Africa: a story of growth, progress, potential and profitability,” reports Ernst & Young, a US-based business consulting company. Johnnie Carson, the US secretary of state for African affairs, adds: “Africa represents the next global economic frontier.” Investors had better be aware, advises Carson, who recently led a US trade delegation to Mozambique, Tanzania, Ghana and Nigeria. China’s trade with Africa reached $160 billion in 2011, making the continent one of its largest trading partners.
Ten years earlier, in 2000, The Economist saw no reason for hope. It pronounced Africa “the hopeless continent,” noting problems that included a bloody civil war in Sierra Leone, famine in Ethiopia and political conflict in Zimbabwe. But last December, the London magazine reconsidered: “Since The Economist regrettably labelled Africa ‘the hopeless continent’ a decade ago, a profound change has taken hold.” Today “the sun shines bright … the continent’s impressive growth looks likely to continue.”
Africa’s overall economic indicators have been remarkable. Over the past decade, Africa’s trade with the rest of the world has increased by more than 200%, annual inflation has averaged only 8% and foreign debt has decreased by 25%. Foreign direct investment (FDI) grew by 27% in 2011 alone.
Even though projections for overall growth in 2012 have been revised downward due to the political crisis in North Africa, Africa’s economy will still grow by 4.2%, according to a UN report in June. Sub-Saharan African economies will grow at more than 5%, notes the International Monetary Fund (IMF). In addition, there are currently more than 600 million mobile phone users on the continent, while increasing literacy and improving skills have resulted in a 3% growth in productivity.
Most foreign investors are still cautious about Africa, particularly because of security and infrastructure problems. But there is a steady increase in intra-African investment, which in 2011 accounted for about 17% of total FDI, according to Ernst & Young. African entrepreneurs are reaping the benefits. The world’s richest black person used to be the US talk show icon Oprah Winfrey, worth $3 billion. Today, Aliko Dangote of Nigeria, referred to by Forbes magazine as a “commodities titan,” has amassed more than $10 billion.