There has been much buzz about investing in Africa and the growth figures show that the markets make sense. According to today’s (6 Jan) daily chart by The Economist (www.economist.com), on IMF forecasts Africa has 7 of the world’s top 10 places for fastest growing economies for the 5 years from 2011-2015. (The magazine’s ranking excludes countries with less than 10 million poeple as well as Iraq and Afghanistan, which could both rebound strongly in the years ahead). Ethiopia, a non-oil economy with Africa’s second-biggest population, heads the list.
Looking back over the 10 years to 2010, sub-Saharan Africa was home to 6 out of the 10 fastest-growing economies. According to the editorial: “Over the period the simple unweighted average of countries’ growth rates was virtually identical in Africa and Asia. Over the next five years Africa is likely to take the lead. In other words, the average African economy will outpace its Asian counterpart.”
All the more reasons for regulators and those running the continent’s capital markets and private equity funds to make capital flows more effective and encourage local populations to have a bigger part in the growth. They should concentrate on streamlining regulations and tax systems that make it hard and costly to do business, and reduce the costs and time for doing business help people focus on productive growth.