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Jonathan Rowland
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Comment
D
riven by some remarkable demographic trends, Africa is a continent
with huge economic potential. By 2030, 50% of the continent’s
population is expected to live in cities – a huge demographic shift that will
bring with it huge opportunities for economic growth. As Richard Dobbs,
James Manyika and Jonathan Woetzel of the McKinsey Global Institute
recently wrote in their barnstorming new book,
No Ordinary Disruption: The
Four Global Forces Breaking all the Trends
:
“Throughout history, when people have moved out of farming to jobs in cities,
their output has typically doubled. As subsequent generations come of age,
their income also increases […] For hundreds of years, people living in cities
have enjoyed living standards one and half to three times better than those of
their country cousins.” (p. 16)
Indeed, by one estimate, by 2030, African cities will have a combined
purchasing power of US$1.3 trillion.
Meanwhile, Africa’s working age population is expected to almost double to
800 million in 2030 and pass 1 billion by 2040 – bucking the general demographic
trend towards lower fertility rates and aging populations. In China, for example,
the working age population is expected to have dropped by some 151 million to
849 million by 2050, while both Japan and Germany are expected to lose getting
on for a third of their working age populations over the same timeframe.
This could mean that the continent is on the cusp of an economic boom similar
to that experienced by China over the past decade. Importantly, it could also turn
Africans into serious consumers of the natural resources with which the continent
is so blessed (some 40% of the global total). That would mark a fundamental
change to the African mining industry, which – with some notable exceptions –
generally digs it up and ships it out.
But there are significant challenges ahead. For starters, Africa is not a single
entity but fractured into over fifty different countries and many more ethnic
groups and cultures. Each country brings with it its own political and regulatory
regime – a problem even if these were all governed well, which they are not.
Industrial infrastructure is also woefully lacking and the continent remains
dependent on foreign investment.
In the resources sector, there is a glimmer of something different. The African
Mineral Development Centre (AMDC) has been established to promote the
transparent, equitable and optimal exploitation of natural resources by changing
the vision of the sector from one of secrecy and isolation to one with broader
links to the wider African economy. As Dr Kojo Busia, Senior Mineral Sector
Governance Advisor at the AMDC said at the recent Mining on Top Africa
summit, it is “incumbent on us to reverse the paradox of Africa’s mineral wealth
and material poverty.”
In Kenya, this approach has seen a new mining law establish a web-based
system for mining concession applications (avoiding a key opportunity for
corruption), reform of mining royalties to deliver more back at the local and
county level and revoking licences in which no development was taking place to
combat the practice of speculative license acquisition. A good start – but one the
must be repeated content-wide to make sure Africa does not squander the unique
opportunity created by its demographic windfall.
