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Reimagining Economic Growth in Africa Through Diversity and Opportunity

Turning diversity into opportunity.

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McKinsey Global Institute Report – Reimagining economic growth in Africa

The report analyzes economic growth in Africa from 2000-2019. It finds that Africa experienced a promising acceleration from 2000-2010, with GDP growing 5% annually. However, growth slowed after 2010 due to falling commodity prices, political instability, and deteriorating fundamentals in major economies like Nigeria. Overall GDP growth was just 3.3% from 2010-2019.

The report highlights the diversity of Africa, with nearly half the population living in faster-growing countries while the other half resides in slower-growing nations. The fastest growers are smaller, less urbanized countries in East and West Africa. The slower growers include the continent’s three largest economies – Egypt, Nigeria, and South Africa.

The report notes Africa’s rapid urbanization, with over 500 million people expected to migrate to cities by 2040. Currently, primary cities dominate but investing in secondary cities could spread economic gains more broadly. Urban infrastructure gaps need addressing to support growth.

Africa’s shift to services holds promise but productivity lags. Boosting agriculture is also key given its importance for livelihoods. Opportunities exist in manufacturing, both for domestic markets and exports.

The report identifies 345 African companies with over $1 billion in revenue. By 2030, over half could grow revenues by $550 billion through strategies like entering new markets.

Finally, the report offers ten ways businesses and governments can raise productivity and reignite growth, from increasing regional trade to investing in cities and championing homegrown companies. The time to act is now to put Africa on a sustainable, inclusive growth path.

Link To Report : Download Report

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