A Rising AFRICA or a Tripping Africa

The Economist (2011) stated that; “Africa has a real chance of following the footsteps of Asia”

After Independence (The case of Ghana) Ghana was the first nation of sub- Saharan Africa to gain independence from the British With a very successful start, Ghana supplied 2/3’s of the world’s cocoa, had the best schools in Africa, had a good amount of investments and had some of the best health facilities in Africa at the time According to Economists, education and investments were vital components to economic growth Investors from several parts of the world has great interest in investing in Ghana

Africa Demographic dynamics The current population of Africa is 1,213,975,985 as of Wednesday, June 8, 2016, based on the latest United Nations estimates. Africa population is equivalent to 16.14% of the total world population.total world population. Africa ranks number 2 among regions of the world (roughly equivalent to "continents"), ordered by population.regions of the world (roughly equivalent to "continents"), ordered by population. The population density in Africa is 41 per Km2 (106 people per mi2). The total land area is 29,661,703 Km2 (11,452,443 sq. miles) 39.8 % of the population is urban (488,296,186 people in 2016) The median age in Africa is 19.5 years. Source:

Africa: The Continent The population of Africa has grown exponentially over the past century, and consequently shows a large youth bulge, further reinforced by a low life expectancy of below 50 years in most African countries The total population of Africa is estimated at 1.2 billion plus (as of June 2016.) Thirty-four out of fifty-three African countries are tallied among the world's Least Developed Countries. About 50% of the continents population less than 50years old

Economic Trends(Last decade) Robust economic growth over the last decade Increase in foreign direct investments (FDI’s) inflows in the last decade FDI inflows into Africa have exceeded $88 billion by 2010 (significantly above an estimated over $44 billion provided for African countries through (ODA) during the same period. But in global terms, this vast continent still receives only a small proportion – about 5% – of total global FDI Private equity firms set Africa as one of their main primary targets

Economic growth after the 90’s Growth in consumer demand Decrease in number of Africans living in absolute poverty due to higher incomes Liberalization of industries across Africa Reduced inflation Increase in democracy amongst governments Improvement of legal structures across African countries Infrastructure development Development of trade agreement frameworks

What accounted for this optimism of Africa rising Increase in GDP; the average GDP across the continent rose at over 5% per year –which was large enough to produce real gains even in the phase of sustained population growth (2.7%) Poverty decreased greatly and substantial progress was made to non-monetary standards of living With the discovery of commodities such as oil, cocoa, cotton; Commodity prices were sky high and even countries with limited exportable resources grew fast The Economist (2011) stated that; “Africa has a real chance of following the footsteps of Asia”

Development progress in the last 2 decades

Change in governance

The driver’s of Africa’s economic performance appear to have weakened and reversed.. Why?

What went wrong? Internal misconceptions and mismanagement - Corruption Changes in external economic environment - Frontier market risks faced by private equity industries -Banks view African countries as high risk investments areas -Commodity Plunge – 16% sub- Saharan African terms of trade

What went wrong? Inadequate legal and governance structures Mechanical issues of markets – trading and settlement systems The mentality of control by governments Inadequate participation of domestic economies

Commodity price drop Price of corn, copper and cotton have fallen by more than 20% in the last couple of years Iron ore and oil prices have dropped by 50% These declines have affected export earning, budgets revenues and investment opportunities to a great extent

Tumbling commodity prices and slow growth

What went wrong – Diversity

Increase in violent conflicts According to the World Bank’s Country Policy and Institutional Assessment, the quality of economic management has slid back to where it was following an improvement between

Is there hope?

Demonstrate greater leadership and ambition in energy and climate -Ensure universal access to energy by Finance the ambition -Deepen regional cooperation to create an integrated African grid -Power up Africa’s agriculture sector - Use national climate plans to chart desired energy transition - Put the African climate vision into action Drive innovation and deliver - Seize the opportunity to “leapfrog” to renewable-friendly regulations - Adopt new models of planned urbanization Pull the plug on waste and corruption - Redirect the US$21 billion spent annually on subsidies - Increase the transparency of energy utilities - End tax evasion and stem illicit revenue flows approximately USD40 billion of capital flight a year How leadership can change the script

Countries must to diversify their economies from solely depending on commodity exports Governments must focus on establishing favourable environments for private investments downstream avenues such as agriculture and mining. This will accelerate growth in the long run The implementation of strong educational and healthcare systems can help facilitate Africa’s surge of progress Foreign aid such as direct budget support and donor financing will help mitigate the impact of the current slowdown