AFRICANGLOBE – Africa may be the world’s next growth frontier, but the continent is still confronted with fluctuating commodity prices, rising inequality and youth unemployment, says President Jacob Zuma.
Over the last decade, six of the world’s 10 fastest growing economies were in Africa, with the World Bank stating recently that almost half of the countries on the continent had attained middle-class income status.
“Despite this achievement, there is still severe poverty and inequality in many parts of the continent, Zuma told the Forbes Africa Forum 2013 in Congo-Brazzaville on Tuesday.
Abundant natural resources, the growing consumer power of an emerging middle class and a youthful population were among the continent’s key development drivers, offering enormous potential for sustainable economic growth and development.
Growing Middle Class
Zuma said the African middle class could be a key player in finding solutions to the challenges facing the continent.
Research findings by the McKinsey Global Institute, a consulting firm, define middle-class households as those with incomes of US$20,000 per year or more.
Data compiled by the World Bank and the African Development Bank puts the number of middle-class Africans at 350-million out of a total population of approximately 875-million.
Countries counted among those with the largest middle-class populations are South Africa, Kenya, Ghana and Angola.
“The growth demonstrates that we are making progress in improving the quality of life and extending opportunities to those who were oppressed only 19 years ago before the dawn of freedom,” Zuma said, referring to South Africa.
Research by the University of Cape Town’s Unilever Institute of Strategic Marketing estimates that South Africa’s Black middle class has more than doubled in the past eight years, from 1.7-million South Africans in 2004 to an estimated 4.2-million in 2012.
Zuma said the growth of the middle class was good for Africa, as it meant a growth in a population with skills to help manage the economy.
Infrastructure, Zuma added, would also play an important role in boosting the continent’s growth.
“Infrastructure development will help lower transport costs and ensure that people, goods and services are able to move more effectively and efficiently throughout the continent.
“Roads, bridges, rail lines, pipelines, power plants, ICT connectivity, cables, ports, and water-ways are the underpinning arteries of growth.”
It was for this reason that the African Union (AU) had adopted the Programme for Infrastructure Development in Africa, which is being led by the AU Commission, the secretariat of the New Partnership for Africa’s Development (Nepad) and the African Development Bank.
Zuma said, however, it was difficult to accurately project the capital cost of the implementation of long-term infrastructure projects, with costs estimated at more than $360-billion until the year 2040.
“I wish to encourage the private sector representatives present here today, especially those from Africa, to become more involved in the development of infrastructure on the African continent. The benefits are immense.
“The establishment of strategic linkages between the African and international companies will be most helpful in the transfer of skills, knowledge and technology.”