Seven of the 10 fastest growing economies in the world are in Africa and although all sorts of risks need to be negotiated by investors and entrepreneurs in African countries, the continent is getting more and more conducive to business. Seyi Bickersteth, Chairman, KPMG Africa and National Senior Partner of the Nigerian Practice, has listed 9 mega trends that will shape the future of Africa. His original post was published here on the KPMG blog.
1. Demographics
Escalating birth rates and higher life expectancy are rapidly increasing the population of Africa where, according to the UNICEF Generation 2030 Africa report, the current 1 billion-plus populous is expected to double within the next 35 years and its under-18 population to increase by two thirds to almost 1 billion.
Unless governments act quickly and collaborate with private and education sectors alike, the growing population is going to significantly intensify existing challenges on creating meaningful job opportunities to address youth unemployment in each market/country. Related to unemployment levels; larger populations who will also live longer will continue to challenge social services and welfare systems.
2. Rise of the individual
Advances in global education, health and technology have helped empower individuals as never before, leading to increased demands for transparency and participation in government and public decision-making. These changes will continue and are ushering in a new era in human history in which, by 2022, more people will be middle-class than poor.
3. Enabling technology
Information and communication technology (ICT) has transformed society in the past 30 years. A new wave of technological advances is creating novel opportunities as well as testing governments' ability to harness their benefits to provide prudent oversight.
4. Economic interconnectedness
The interconnected global economy will see a continued increase in the levels of international trade and capital flows, but unless international conventions can be strengthened, progress and optimum economic benefits may not be realized.
5. Public debt
Public debt is expected to operate as a significant constraint on fiscal and policy options through to 2030 and beyond. Governments' ability to bring debt under control and find new ways of delivering public services will affect their capacity to respond to major social, economic and environmental challenges.
6. Economic power shifts
Emerging economies are lifting millions out of poverty while also exerting more influence in the global economy. With a rebalancing of global power, international institutions and national governments will need a greater focus on maintaining their transparency and inclusiveness.
7. Climate change
Rising greenhouses gas emissions are causing climate change and driving a complex mix of unpredictable changes to the environment while further taxing the resilience of natural and built systems. Achieving the right combination of adaptation and mitigation policies will be difficult for most governments.
8. Resources stress
The combined pressures of population growth, economic growth and climate change will place increased stress on essential natural resources (including water, good arable land and energy). These issues will place sustainable resource management at the centre of government agendas.
9. Urbanization
By 2030, more than 50% of the population of Africa will be living in cities and over 60% will be living in cities by 2050. Urbanization is creating significant opportunities for social and economic development and more sustainable living but is also putting pressure on infrastructure and resources, particularly energy.
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