5 Reasons to be optimistic about Africa in 2015

Adapted from Business Report.

It is impossible not to have strong views when it comes to the debate on Africa’s rise: despite solid economic growth and progress in poverty alleviation, people’s views on the region’s outlook remain stubbornly polarised.

Let me state up front that I am cautiously optimistic that Africa is taking off. This year the World Economic Forum (WEF) is marking 25 years of change in Africa. Looking back, there is no denying that Africa has made remarkable progress over the past two decades. Here are five reasons why I am optimistic.

One, the regional economy has grown steadily since 2001 and continues to do so at a rate of about 5 percent a year. Its macroeconomic environment is sound with low government debt, rising domestic resource mobilisation and reduced inflation rates.

Two, the consumer market is rising in tandem with its growing population. In 2008, McKinsey estimated that African consumers spent $860 billion on goods and services, which was 35 percent more than the $635bn

that Indian consumers spent and just over the $821bn spent in Russia.

Three, the environment for doing business is improving. According to the World Bank, between 2013 and 2014, sub-Saharan Africa realised the largest number of business regulatory reforms, and five of the top ten countries that improved the most were from sub-Saharan Africa.

Four, access to financial services is rising, thanks to the adoption of technology and innovation. For example, Equity Bank in Kenya reaches more than 8 million customers through its combination of an extensive network of physical bank branches and mobile financial services.

Five, Africa is closing its gender gap. According to the WEF’s global gender gap index 2014, Rwanda now ranks among the top 10 most gender equal societies in the world in terms of economic and political participation. Burundi and South Africa rank 17th and 18th respectively.