Reimagining economic growth in Africa

Boasting the world’s youngest and fastest-growing population, Africa is a continent on the rise. With burgeoning cities, bold innovations, and growing industries such as fintech, agriculture, and clean energy, Africa is positioning itself as a key player in the global economy. A recent report by the McKinsey Global Institute, titled Reimagining Economic Growth in Africa: Turning Diversity into Opportunity, sheds light on the potential for Africa to accelerate productivity and meet the needs of its people and the world at large. Acha Leke, Chairman of Africa Region at McKinsey, joined CNBC Africa to discuss the key insights from the report. The report highlighted the challenges faced by Africa over the past decade, including slowing growth, declining foreign direct investment, and political instability. However, it also pointed out that 50% of Africans live in countries that have grown above the continental average of 4.2%, showcasing the diverse economic landscape of the continent. Despite consumption slowing down, the influx of 130 million Africans into the consuming class presents a significant opportunity for continent-facing companies, potentially creating $600 billion to $1.3 trillion in additional revenue. The report also noted the resilience of African entrepreneurs, with 345 billion-dollar businesses identified across the continent. Acha Leke emphasized the importance of preparing the African workforce for the future, as 800 million more people are expected to join the workforce by 2050. He highlighted the opportunity for Africa to become a global talent hub, leveraging digital opportunities to retain talent on the continent while serving the world. Addressing the need for unity, Leke pointed out the benefits of African countries working together, citing examples from the COVID-19 pandemic where collaboration within the African Union yielded positive results in securing resources like ventilators and vaccines. He emphasized the importance of the Continental Free Trade Area (CFTA) as a step towards creating a unified economic zone. Looking towards industrialization, the report underscored the need for Africa to increase its share of global exports, currently at 2%. Leke emphasized the importance of securing the supply of critical goods locally and adding value to raw materials through manufacturing and value addition processes. The future of industrialization in Africa depends on its ability to enhance competitiveness and ensure security of supply. As Africa navigates its economic landscape, the need for innovation, collaboration, and strategic planning becomes increasingly crucial. Reimagining economic growth in Africa requires a multifaceted approach that addresses the challenges while leveraging the continent's vast resources and human capital. Acha Leke's insights shed light on the opportunities and complexities facing Africa as it charts its path towards sustainable and inclusive growth.