As World Cup approaches, Africa’s economy gets in the game

As the World Cup commences on June 11 in South Africa, there is an increased spotlight on the African economy. While the continent has traditionally been viewed as a valuable commodity when it comes to natural resources, the real action is taking place far beyond raw materials.

According to McKinsey & Company, Africa has made big strides beyond the extractive resources industry — which currently accounts for only one-third of the continent’s economic growth. Africa’s mobile telecommunications industry, for instance, has grown 550 percent since 2003. The banking sector — especially mobile banking, where Africans use their cell phone to do access banking services and pay bills — is flourishing. Africa’s manufacturing sector has grown nine percent since 2002. Africa last year surpassed the 1 billion people mark, with 44 percent of sub-Saharan Africa’s population being under age 15.

With its youthful population striving to increasingly become a part of the global economy, McKinsey states in its new quarterly report that Africa “now stands to become the developing world’s next great success story.” While huge challenges remain for the continent (poverty, corruption, civil wars in some countries, to name a few), there is another side of sub-Saharan Africa that is flying under the global radar: growing democratization, the area now has 16 stock markets (up from five in 1989), a growing middle class, various regions lowering their trade barriers so neighboring countries trade more with each other, and increased economic growth on the continent.

The International Monetary Fund projects that Africa’s gross domestic product will increase 4.3 percent this year, up from $1.5 trillion in 2009. As part of that picture, a growing number of companies based in Africa are servicing the growing consumer base. According to McKinsey, some 200 million Africans will enter the consumer goods market by 2015.

Bright Simons, the development director for the Imani Center for Policy and Education, a policy think-tank in Accra, Ghana, is among the growing number of African entrepreneurs who are tapping into this growing market. The Ghanaian businessman co-founded a technology platform that enables individuals to use cell phones in order to check for counterfeit pharmaceutical drugs — which are widespread and dangerous in Ghana — and increase public safety. Last year, his mPedigree design won the Emerging Markets category of Nokia’s Innovators contest. Simons thinks that there is a lot of upside to African creativity, although he states that African entrepreneurs face certain attitudes about their ability.

“When we started our mPedigree initiative, the response we got everywhere was that a technology enterprise that had social as well as commercial objectives, a global ambition, and was based on an invention developed by an African was quite clearly a potpourri of confusions and contradictions”, he said. “The consistent thread in many of the reactions was that Africa is not the natural testing-ground for innovative products, much, much less for innovative business models. This was of course patent nonsense since all the evidence suggested contrariwise and pointed instead to boundless creative enthusiasm shackled by historical accidents of political perversion and economic liberalism. But how forcefully it brought home to me that many million African entrepreneurial dreams must have been killed this way.”

Simons contends that African entrepreneurs should maintain focus on fulfilling their dreams, and continue tapping into Africa’s growth potential. “But then we didn’t give up, and by having persevered we were also let in on another vision: that of millions of African dreams refusing to die and receiving nourishment from the irresistible urge for a better life by a billion Africans newly unleashed in the burgeoning free markets.”

In his weekly column in Business Daily (Kenya), James Shikwati, the executive director of Kenya’s Inter-Regional Economic Network, “writes”:http://www.businessdailyafrica.com/Opinion%20&%20Analysis/Lets%20also%20target%20World%20Cup%20benefits//539548/907796//sdd68x/-/ that Africans should maximize the attention drawn that the continent will receive during the World Cup to increase Africa’s share of the global economy. “This is the time to market African cuisine, music, art, philosophy, indigenous products and national brands among other items. It is simply Africa’s moment”, he writes.