Kevin Welman was deeply engrossed in a morning session at this year’s World Economic Forum Africa summit in Cape Town, South Africa, when it struck him just how much the prospects of the continent as a whole had changed in the short two years since the WEF had last gathered in the shadow of Table Mountain.
“At that earlier meeting, all the talk was about how Africa would change radically in the future,” Welman said recently. “This time it was profoundly different. The prevailing view was that the future had finally arrived. No longer was it about some distant hope. The sense of optimism in the room and in the corridors was palpable.”
For Welman, the 37-year-old manager of FleishmanHillard South Africa, this was a seismic moment. He was born in Johannesburg and had grown up during the torturous demise of apartheid and the political and economic breakthrough of a modern South Africa. But the prospects for progress in the sub-Saharan part of the continent had always lagged dramatically, and while each year for the past decade there were predictions of an economic breakout, they all proved to be false dawns.
Now, Welman and others can see that business is on the move in places like Angola, Zambia, Ghana, Nigeria, Mozambique and Ethiopia. Average GDP growth for sub-Saharan Africa will come in above 5 percent, according to the International Monetary Fund and World Bank. Six of the world’s fastest growing economies of the past decade are in this region, an analysis by The Economist found. And despite a decline in foreign direct investment to South Africa last year, the total for sub-Saharan Africa still grew 5 percent, indicating that many other countries are now recipients.
While there are several factors supporting this long overdue emergence from behind a dark cloud of oppression, poverty and disease, one of the biggest energizers of the continent is the arrival of the mobile phone. Welman and his colleagues agree that the explosion in the number of cellular phones has changed how business operates, opening up new markets and making it more efficient.
“While Africa has had problems industrializing, it didn’t have problems creating a telephony network almost overnight and that has made all the difference,” Welman said.
The World Bank estimates that there are approximately 650 million mobile phone subscribers on the continent — more than either the United States or the European Union can claim. While many Africans still don’t have access to a doctor, sufficient food or even clean water, more than half of the population now has a cell phone. That has grown from a mere 600,000 in the late 1990s. At the same time, Internet bandwidth has grown 20-fold as hundreds of thousands of kilometers of new cables have been laid across the continent. For every 10 percent increase in mobile and broadband penetration, GDP increases by one percentage point, according to the United Nation’s International Telecommunication Union.
This recent boom in connectivity has led to dramatic changes in not only the way the continent communicates, but also in the way it banks, invests and does business. In fact, Africa is now considered a global pioneer in banking on mobile devices—if only because most Africans have no access to conventional banking otherwise. For instance, Safaricom CEO Bob Collymore tells a story about what Kenyans had to do “to get money up country” before the advent of his company’s M-Pesa technology, a service that transforms cell phones into credit cards and bank branches. “People had to give (the money) to a bus driver and ask him to deliver it,“ Collymore told Newsweek earlier this year. “Innovation is not necessarily driven by technology; it’s driven by need.”
As a result of being connected more and more with the outside world and as a consequence of higher levels of education, slowly but surely Africans also are demanding better government. Twenty-five years ago most leadership was autocratic at best while today the majority of nations—approximately 30—are democratic. The World Bank’s Ease of Doing Business reforms show steady progress among sub-Saharan African countries, as they do in Transparency International’s Corruption Perceptions Index.
Although the trickle down to average Africans is not as fast as many would hope, there are positive statistics that will likely translate into future economic growth:
- Within two years 100 million African households will have annual incomes greater than $3,000—a figure approaching that of India, Standard Bank reports.
- Large-scale debt cancellation has afforded the continent some breathing space, and growing interest in its abundance of natural resources has injected much needed capital.
- Where 40 years ago a mere 13 percent of Africans attended secondary school, today that figure is 40 per cent, according to the Financial Times, and rivals the education rates in places like Turkey, Mexico and India.
- The rate of urbanization—often an indicator of economic progress—has exploded, with the United Nations Population Fund projecting a doubling of sub-Saharan Africa’s urban population between 2000 and 2030.
- Despite the scourge of AIDS, life expectancy in sub-Saharan Africa is beginning to rebound, albeit slowly, as HIV and AIDS drugs are made more available.
- Access to safe water improved at a faster rate in sub-Saharan Africa than in the rest of the world since the beginning of this millennium, the World Bank reports.
These are all hopeful signs that make Africa a much more viable economy for investment, a fact that China has recognized more than many Western nations. “While America may largely misperceive Africa as a disaster zone, China does get the promise on the continent,” Nicholas Kristof wrote in The New York Times. “Everywhere you turn in Africa these days, there are Chinese business people seeking to invest in raw materials and agriculture. LINK
Africa continues to have deep issues. However, within three years there will be over a billion cell phones in use on the continent thus enabling its citizens access and ultimately a stake in the global economy for the first time in history. For too long, Africa has been bedeviled by strife, instability and revolution. This time a rebellion is underway – an economic one – and it is in all our self-enlightened interests to be part of it.