A continent once predominantly associated with abject poverty and widespread civil strife is now embracing rapid economic growth and is garnering world attention while at it. There are several factors of economic development that has contributed to the explosive expansion of the African economy.
Africa is well on the way to become the home for half of the planet’s workforce by 2050 and would have a population four times larger in 2100 than it is now. This means that Africa will house the world’s largest workforce to propel exponential economic growth while the rest of the world’s first world countries would be struggling to keep up economically with their shrinking populations.
(United Nations, The Washington Post, The World Bank)
Burgeoning Middle Class
Between 2020 to 2050, the African continent is expected to overtake both China and India to contain the urban population in the world. Urbanization is closely related to astronomic leaps in real income per person, which has jumped by 30% in the last decade. This means more Africans are expected to join the middle-class socioeconomic strata and have the disposable income to fuel economic development in Africa, which is currently estimated to be about one-third of the continent’s population. By 2060, this is expected to soar to more than a billion people.
(United Nations, The Economist, The World Bank, Quartz)
Increase in Access to Credit
Earning more disposable income cannot translate to economic growth if the people lack access to credit. But the advent of mobile banking has transformed the financial landscape in Africa as one of the factors of economic development, specifically as an instrument of payment. For instance, in 3 years from 2011 to 2014, 43% percent of Kenyans have adopted mobile banking to transfer funds, amounting to a whopping $23 million. Today, Kenyans have unprecedented access to credit that has nurtured a favorable economic climate for entrepreneurship. Along with Kenya, Somalia, Tanzania, Uganda, and Zimbabwe have also allowed their people a greater range of access to credit.