Positive economic growth in Africa that has averaged five per cent in recent years is projected to accelerated driven largely by industrialisation, intra-Africa trade, infrastructure investments and capital liquidity.
Wim Plaizier, a Partner at is a leading global management consulting firm A.T. Kearney, said during the World Economic Forum that these four measures will define economic growth in Africa in the coming years.
On industrialization, he observed that many African countries export resource products with limited local processing, something that is unsustainable and adds little value to the continent.
However, the fact that many countries have begun implementing strategies to create local manufacturing industries related to the resource sectors like cars and equipment, food products among others show that Africa is finally appreciating the importance of industries in economic growth.
“These strategies are important for increasing local employment and optimizing Africa’s trade balance by importing less and exporting items that bring in greater value,” noted Plaizier.
On Intra-African trade, Plaizier noted that while it is easier for Africa to export products to Europe or Asia than to a neighbouring country, the continent needs to embark on a continental free trade initiative to increase intra-African trade and ensure that value remains in Africa.
This will require monetary measures to stabilize currency fluctuations between countries as well as efforts to make the travel of people between African countries much easier.
On infrastructure investments, the continent should focus north-south infrastructure investments in roads, rail and ports to facilitate the flow of goods instead of the current scenario whereby infrastructure investments is focused on bringing resources to the nearest port.
On capital liquidity, Africa must increase liquidity in other key markets and improved flows of capital across the continent. Currently South Africa is the most liquid capital market in Africa.
A.T. Kearney, which has offices in more than 40 countries, is one of the leading global companies selected as strategic partners with the World Economic Forum.