Sub-Saharan Africa is expected to remain the world’s second fastest growing region, despite mounting concerns over emerging market turmoil. Its robust growth since the mid-1990s is not only a commodities story. It is also a result of better governance, more efficient use of resources and rising domestic demand: two-thirds of Africa’s GDP growth is driven by rising consumption of goods and services, including retail, financial services and telecommunications.
The past two decades transformed Africa’s economies and societies. According to the African Development Bank, the continent’s middle class has almost tripled to 326 million since 1980, which roughly equals the middle class population of India or China. This did not go unnoticed by global enterprises: while natural resources are still the mainstay of foreign direct investment (FDI), investment in consumer-oriented goods and services is climbing.
However, the study also shows that just 44 million in this group make $10 to $20 a day. All others belong to the lower middle class, earning $4 to $10 a day, or to the “floating class”: those with incomes barely above the poverty line. So, much remains to be done to make growth more inclusive. And what has been achieved to date is far from secured: research by the Financial Times suggests that 1 billion people in the developing world are at risk of slipping out of the nascent middle class and back into poverty if external or internal conditions change.
And they might. Faltering growth in China is already affecting commodity prices, especially for industrial inputs such as copper and iron ore – an essential revenue source for many governments in the region. Tighter money supply in the United States poses another risk: last year 10 billion in US dollar-denominated sovereign bonds was issued, up from 1 billion 10 years earlier. Now investors pay closer attention to the region’s vulnerabilities, which is reflected in less capital pouring into local currency debt markets and depreciating currencies.
These trends matter but the biggest challenge is not cyclical – it’s structural. As the 2013 African Transformation Report points out, better macroeconomic management, governance and incentives for the private sector produced higher growth but did little to change the structures and technology levels of African economies. This sets the continent apart from East Asia in the 1960s, where economies rapidly diversified and moved up the value chain.
In Africa, despite FDI hitting all-time highs, investment in modern non-resource industries is flat. Some regions are less industrialized today than in the 1980s, and less than 10% of the workforce finds jobs in manufacturing. This is tough news, especially for Africa’s young people, who make up more than half of the population: only 25% of those under the age of 25 find regular employment as a salaried worker, and only a small fraction in the formal sector of modern enterprises.
In response to this defining challenge, the 2014 World Economic Forum on Africa, which takes place in Abuja, Nigeria, is focusing on inclusive growth and job creation. As Africa’s largest economy and most populous nation, Nigeria plays a crucial role in advancing the continent’s growth. However, with more than 60% of its population living in extreme poverty, Nigeria is also emblematic of the challenge to convert growth into broad-based prosperity.
More than 900 registered participants, including more than 650 business representatives, 100 government representatives, and 12 heads of state and government, will engage in an intense and diverse two-day programme. All sessions listed below will be accessible on webcast or television, feature live tweeting, and integrate twitter comments live in the session. Don’t wait, join the conversation! (West Africa Time Zone, UTC+01:00)
|Hashtag||TV||Live Stream||Live Tweet*||Virtual Panel*|
09.00 – 10.00
How robust and inclusive is Africa’s growth story?
10.15 – 11.00
|Unlocking Job-Creating Growth
11.00 – 12.00
Africa is the world’s second fastest-growing region, yet only one person in four holds stable, wage-paying jobs. How can the continent’s growth strategies be more inclusive and create jobs?
|Securing the Future
13.45 – 15.00
While interstate and civil wars have receded, non-state violence involving contending armed groups and communal violence is increasing. How can Africa best respond to emerging security threats?
|An Insight, An Idea with Luiz Inácio Lula da Silva
13.45 – 14.15
A conversation with the 35th President of Brazil, Luiz Inácio Lula da Silva, on how to orient a nation on a path to inclusive growth
|Africa Investment Outlook
15.15 – 16.15
How can investment drive diversification and inclusive growth in Africa?
|Partnering for Prosperity
17.00 – 18.15, Bloomberg TV
Africa attracted a record $42 billion in foreign direct investment last year. How can global, regional and local partnerships be enhanced to strengthen and diversify Africa’s growth trajectory?
|Investing in Health
17.00 – 18.15
How can innovations in health be scaled through investment and entrepreneurial development?
|Private Sector, Public Works
09.00 – 10.15
How are innovative public-private cooperation models accelerating investment in crucial infrastructure?
|Young and Restless
09.00 – 10.00, Channels TV
With almost 200 million people aged between 15 and 24, Africa has the youngest population in the world. How is Africa’s young generation shaping its future and the future of the continent?
|From 2015 to 2063: Accelerating Africa’s Transformation
10.45 – 12.00
The African Union’s Agenda 2063 envisions a prosperous and united Africa based on shared values and a common destiny. How will Africa’s leaders and citizens turn this vision into action?
|An Insight, An Idea with Tony Elumelu
10.45 – 11.15
A conversation with investor and philanthropist Tony Elumelu on challenges and opportunities in Africa’s emerging markets
|Engaging in Energy
13.30 – 14.45
How can Africa overcome the paradox of being energy-resource rich and access poor?
|Africa Growth Outlook
15.00 – 16.00, CNBC Africa
Africa’s economic growth is forecast at 5.2%, yet tighter financial conditions and weaker resource demand are surfacing growing pains. What challenges and opportunities are shaping Africa’s growth outlook?
The 2014 World Economic Forum on Africa will take place in Abuja, Nigeria, between 7-9 May.
Author: Sebastian Buckup, Director, Programme Development Team, World Economic Forum.
Image: A farmer holds out grains of wheat in his hands north of Cairo, April 23, 2013. REUTERS/Mohamed Abd El Ghany