Report shows that Africa’s economy could be worth $5.6 trillion by 2025

A 2016 McKinsey Global Institute report entitled ‘Lion on the Move II: Realizing the potential of Africa’s economies’ showed that the continent has the capability to grow its economy beyond what it is.

Between 2010 and 2015, the continent’s overall GDP growth averaged only 3.3 percent, considerably weaker than the 4.9 percent between 2000 and 2008, according to the McKinsey report. However, the report showed that by 2025, Africa’s economies could be worth $5.6 trillion as its economic fundamentals remain strong. However, it noted that the continent’s governments and companies must work even harder to the economies progressing.

“Future growth is likely to be underpinned by factors including the most rapid urbanization rate in the world and, by 2034, a larger working-age population than either China or India,” the report stated. “Accelerating technological change is helping to unlock new opportunities for consumers and businesses, and Africa still has abundant resources.”

According to the report, Africa’s consumers and businesses account for $4 trillion annually and are growing rapidly. The prediction for profitability spans across several industries including agriculture, infrastructure, and Africa’s abundant natural resources.

A 2019 Goldman Sachs economic research showed that these economic drivers of “secular acceleration” may have a huge impact on the economies, however, they account for only 30% of Africa’s GDP growth since 2000. The World Economic Forum reports that these economic drivers appear to be “deep and structural.”

To reach the predicted goal, the World Economic Forum suggests that the continent would have to continue to “strengthen institutions, support political stability, promote democratization, enhance policy coordination, improve ease of doing business, reduce debt, open financial markets, attract foreign direct investment, facilitate technology transfers, and nurture human capital.”

Many African countries are already heading towards the growth mark, especially East African countries. If this continues steadily and rapidly expands to more countries on the continent, Africa will see positive results over the next half-century and possibly match China’s rapid rise in the last half-century.

Africa’s ability to hit new economic levels is mostly dependent on its largest economies, Egypt, Nigeria, Kenya, South Africa, among a few others. The success of the continent at large stands to benefit millions of Africans living in abject poverty. It will also place Africa in a strategic position of influencing the rest of the global economies.

While Africa is on the path to attaining economic stability, there remain global concerns surrounding its economies in relation to its slavery and colonialism history. Political rivalry is another strong opposition to Africa’s economic progress that must be dealt with appropriately for the continent to progress economically.

The International Monetary Fund predicts that Africa will be the world’s second-fastest-growing region.