Has Africa’s time finally come?
The emergence of Africa as an economic powerhouse has been predicted for more than two centuries. But finally, Africa may be at the dawn of a new economic age, with growing exports fuelling a burgeoning new middle class.
In 2010, the OECD estimated there were 32 million Africans deemed ‘middle class’ , which put the continent’s economic purchasing power on par with the Canadian economy.
But a new assessment of economic data by the African Development Bank – which defines middle class as having an income of $US2 or more a day and says that middle class means being able to buy more than necessities – has found there may be 350 million Africans in a new emerging middle class.
And a recent book argues that up to a third of the 1.1 billion Africans can be considered middle class and that, despite many problems, there is more hope than despair across a continent where 40 per cent of residents are under 15.
Professor Vijay Mahajan, of the University of Texas, made the claim in book, Africa Rising: How 900 Million African Consumers Offer More Than You Think.
But, even he admits there are many challenges, including a population increasing by 20 million a year and an urban population increasing twice as fast, by 40 million a year.
The number of African immigrants in the US rose from 100,000 in 1970 to 1.6 million in 2010; over half arrived between 2000 and 2010.
Many of these migrants remit money home to support family members or to invest in businesses.
The four leading countries of origin which have recently provided over 40 per cent of African immigrants in the US are: Nigeria, with 243,000 immigrants in the US in 2012; Ethiopia, 191,000; Egypt, 174,000; and Ghana, 134,000.
Many of the African immigrants in the US arrived as students and settled, helping to explain why a higher share of African immigrant adults (17 per cent) compared with US-born adults (11 per cent) have advanced degrees.
African immigrants are more likely than other immigrants to report speaking English very well, and have higher median earnings than the median of all immigrants taken together.
Migration within Africa is also fuelling economic growth, Professor Mahajan argues.
South Africa has modified migration policies to distinguish between short-and long-stay visas.
South Africa in 2010 allowed 245,000 Zimbabweans in the country to obtain Zimbabwe Special Permits (ZSP) that allow them to live and work in South Africa.
These permits are to be extended until December 2017 beginning in October 2014. The South African government will also crack down on unauthorized foreigners in the country.
But there are institutional challenges to migration driven growth.
Kenya in September 2014 suspended sending domestic workers abroad because of what the government called mistreatment of Kenyan women abroad. The government said that all private recruiters would have to be re-certified in order to send domestic workers abroad.
Ghana, Africa’s second-largest gold producer, is floundering, with an economy that has stalled and a depreciating currency. In 1960, Ghana and South Korea had roughly the same per capita GDP, and both had about 60 per cent of their workers employed in agriculture. In 2013, Ghana’s GDP per capita was $1,400, while Korea’s was $21,000.
About 70 per cent of government spending is on the bureaucracy, which is considered overstaffed and inefficient. The cedi, introduced in 1967, has lost value against the dollar.
Niger is one of the world’s poorest countries with one of the highest birth rates; women average eight children each. Niger’s population of 17 million is expected to exceed 35 million by 2030.
AMES Staff Writer