When people think of business growth, they think of the major continents of North America and Asia. But an unexpected economic riser that’s following in the footsteps of Asia has appeared on the second largest continent of the world.
In southern Nigeria lays the bulging shops of the Onitsha market. Known as the world’s biggest market, the shops are not empty. Goods stacked six feet high tower in the aisles as eager customers snatch up the products. Overworked salespeople try to keep up with the buying onslaught. Nearly 3 million people go to the Onitsha market daily to buy products such as rice, soap, construction equipment and computers.
Despite the region suffering from corruption, poverty and disease that Africa is world-renowned for, motivated entrepreneurs see an increasing market growth with millions of prosperous consumers seeking the same commodities offered in the rich countries. As reported by “The Economist,” Africa has ten countries within the last decade that have shown the world’s fastest growth. Africa has surpassed both East Asia and Japan in economic growth for eight years out of the past ten years, and is expected to reach a six percent growth increase in 2012, as IMF forecasts.
On Copper, Gold, and Oil
Currently, it’s a waiting game to see if Africa can continue this economic course. Manufacturing and the service industries have contributed to this overall growth, bolstering development of many of the African countries. Yet can this economic growth continue at this pace if demand dwindles, which affects the market supply?
In today’s society, most Africans have less than two dollars to live on every day as they deal with lessening food production in a harsh environment plagued with drought and famine. Even when a country has shown an incredible economic prosperity, governmental corruption runs rampant. Major economic players ofRwanda and Ethiopia have shown the right actions for growth, but may eventually be held back by the private political agendas of the government interested solely in its own corruption.
Despite the disheartening government in many African countries, Africa may still hold its own in the economic market race. With a middle class of 60 million people bringing home a yearly income of $3,000 a year, median growth is expected to reach 100 million Africans in 2012, according to Standard Bank. Foreign investment opportunities are also visiting Africa — with China, Brazil, Malaysia and other countries contributing to Africa’s manufacturing sector and operational services such as call centers.
Technology is another major contributor in Africa’s growth. Roadways are hazardous for physical travel. But with the advancements of telecommunications, 600 million Africans use mobile phones for banking and telephonic agro-info, and mobile-internet services have expanded in use in a higher proportion than India’s mobile users.
Health services for millions of Africans have also improved through the distribution of mosquito nets and the treatment of HIV/AIDS. As African health improves, service skills and work productivity is experiencing a boon of 3 percent a year. This surpasses even America’s productivity rate of 2.3 percent.
The reason for this boon is Africa’s changing reign of government. The colonial shackles have been discarded after three decades of oppression. Benin started this trend in 1991, and other countries have followed suit in delegating the government power to where it should be: stimulating growth through honest ballot elections and government office placement of exceptional political leaders.
Population trends have also lent a hand. With better education creating a knowledgeable workforce, the birthrate is lowering. This creates a growth boost for the economy. Yet this boost can only succeed if jobs are in demand. The lack of jobs will lead to growing frustrations and mounting violence, forcing the government to step in to solve the problem.
Extensive reform is Africa’s remedy. A restructuring of all governmental powers will help start-up businesses experience economic growth through honest tax cuts and collections. With land ownership and titles returned to every individual farmer, food production could expand, lending to the ease of poverty and the growing wealth of toiling workers. In the end, the voters must have the final say during political elections, and government power must honestly switch hands when the politician is told to step down from their political office.
The Trade Factor
Overseas trade may ultimately decide the fate of Africa’s growth. Western governments should see this truth and open up more routes for trade rather than just dish out aid programs like a small bandage covering a large wound. America has taken an initial step with its “America’s African Growth and Opportunity Act” to lower tariff barriers in the shipment of goods. Yet this step needs to be taken by other nations.
The “Extractive Industries Transparency Initiative” would eliminate the secrecy of what foreign companies pay in licenses to export Africa’s natural resources. Both the African government and foreign investors should consider this economic openness to benefit the African workers who are getting the short end of the proverbial stick.
Government corruption and environmental calamities will still continue to plague Africa. But through its distress, Africa’s dark continent is brightening with economic growth. The world economy is paying close attention for the time when Africa’s progress outweighs its political strife.