IN a highly insightful piece elsewhere on this publication, Carlos Lopes, the Executive Secretary of the UN Economic Commission for Africa argued that the prospect of Africa’s recent growth tanking due to the fall in global commodity prices had been overplayed.
Not all commodities were the same and global indices did not differentiate between African commodities and the whole, he wrote (See article).
A second pushback against the doomsday narrative was that only a third of the continent’s recent growth has come from commodities: the bulk has been from internal consumption, “supported by the burgeoning middle class, increasing disposable income and public savings rates”.
Because of this rising internal consumption, the potential for local production to increase to meet demand was high, and would only become bigger as the continent’s population is expected to double to two billion by 2050.
A large chunk of this population would be middle class—at least when measured by spending levels.
China’s economic slowdown has been held up as the main reason for the seemingly hasty revisions to the continent’s growth trajectory, and the jury is still out over whether the easing up is unintended or deliberate. The case for the latter argument has been that the Asian country is transitioning from export-fuelled growth to one driven by internal consumption, like many of its developed rivals including the US.
With average Chinese citizens becoming wealthier, this has meant labour costs in the country have risen, making it a less competitive producer. The immediate beneficiaries of this shift by China into less productivity would appear be its Asian neighbours.
But Africa may have the ultimate gains, Lopes argues. “What will make Africa attractive is that it is urbanising faster than other parts of Asia, and these are conditions that could be attractive. And we will have a huge captive market for the low-end value production such as shoes, textiles, toys, plastics, you name it. So we will probably be the next manufacturing powerhouse.”
Projections are that by the late 2030s, Africa will become a continent with more of its population living in urban than in rural areas, and by 2050, nearly 60% of the population will live in cities, up from 40% currently.
Evidence also shows Africa is urbanising faster than any other region: according to data from the UN Population Division, the continent has 22 of the 30 countries with the highest average annual percentage change in urban population in the world, and 33 of the world’s top 50.
The continent also has a higher average urbanisation rate—at 3.5% to the world’s average of 2%, measured over the five years to 2015.
According to the UN’s data, Rwanda tops the list of African countries that have seen their urban population increase fastest between 2010 and 2015, ahead of Burkina Faso, Burundi, Uganda and Tanzania.
Mauritius has urbanised least over the past five years, ahead of Libya and Seychelles, probably as a result of having already been more saturated than most other African countries.
Eastern Africa has the highest rate of urbanisation with an average annual increase in population of 4.51%, ahead of West Africa (4.34%), Central Africa (3.9%) and Northern Africa at 2.12%. Southern Africa has the least urbanisation rate of the sub-regions, at 1.67%.
And in an interesting way, Africa is doing it rather differently—industrialisation—such as the setting up of a factory—usually acts as the draw for the growth of urban centres, as labour flocks in, and supporting businesses—and social services such as schools come up.
But Africa has the lowest share of manufacturing as a percentage of its GDP, and this means that it is the increasing population that will instead stimulate industry to meet its needs.
Africa just doesn’t do do it conventionally.