Friday, 18 March 2011
http://www.youtube.com/v/XkXAqVmfdho?fs=1&hl=en_GBBecause of the gulf that exists between the reality on the ground and the perception abroad, enterprising African companies which would drive the continent’s growth aren’t getting the financing they need.According to the World Bank, 86% of Indians live below the poverty-line, compared to 80% of sub-Saharan Africa.
Yet there is optimism about India's economic prospects
And it is misperceptions about Africa that so often leads society to think, “How more can we help?”, whereas, Africa can be a huge engine for growth, not only for itself, but for the benefit of the global economy. And it is precisely this mis-perception that has undervalued the African market and driven investors away. We call this “information arbitrage.”SMEs account for 60% of the GDP of developed nations . . .
. . . they only account for 10% of Africa’s GDP
Doubts about Africa’s viability as a market are premised on metrics like GDP per capita. But GDP per capita does not capture the informal sector, which is so important on a continent where 95% of transactions are carried out in cash. GDP per capita would not have predicted that within a decade, Nigeria would have gained 60 million new mobile phone users.In 1995, New York had more mobile phones than the entire African continent . . .
this year, Africa will have as many mobiles as North America
When we look at the rise of India and China, it wasn’t only development money that precipitated their rapid growth. It was also faith in Indian and Chinese businesses to cater to their indigenous needs. And with that faith, the middle-class emerged, and these businesses captured their growth, eventually moving on to capture international markets.
Facing similar income inequality, government bureaucracy and infrastructure challenges, Africa can leverage India’s experiences in creating low-cost business models and a dynamic workforce which can drive Africa’s growth.Africa’s collective GDP is predicted to grow by 63% between 2008 and 2020- McKinsey
African households earning $5,000 or more will have grown by 80% by 2014, since 2000- McKinsey
Yet, in the words of former UN Secretary-General Kofi Annan, “Africa’s profitability is one of the best kept secrets in today’s world economy.”
Within African industries, the telecomm sector has gained the most attention. A need for commercial capital in other sectors, meanwhile, lingers.
The healthcare sector has so far been neglected by mainstream commercial capital. Last year, AIDS claimed 1.4 million lives in sub-Saharan Africa. Malaria kills 125 children every hour. A Boeing 737 carries 125 passengers. Imagine every hour, we have a plane crash.
Malaria doesn’t target the young alone and adult deaths cost families across sub-Saharan Africa an estimated $12 billion in wages every year.
Africa accounts for a quarter of the world’s disease burden, yet only accounts for 1% of its health expenditure. This needs to change."Today, as I sip my Rwandan gourmet coffee and wear my Nigerian shirt here in New York, and as European men eat fresh Ghanaian pineapple for breakfast and bring Kenyan flowers home to their wives, I wonder what it will take for Western consumers to learn even more about the products of self-sufficient, hardworking, dignified Africans."- Dr William Easterly
21st September, 2010
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