A new report has shed light on the rising economic importance of Africa’s emerging markets. The analysis, dubbed ‘Understanding the Socioeconomic Drivers of Megatrends’, revealed that economies such as Ethiopia, Rwanda and Mozambique are anticipated to more than triple in size in GDP by the year 20130 – in terms of Purchasing power parity (PPP) – demonstrating the rising economic importance of Africa’s emerging markets.
PPP is a popular metric used by macroeconomic analysts to compare economic productivity and standards of living between countries. Some countries adjust their gross domestic product (GDP) figures, to reflect PPP.
The data was released this month by Market research company, Euromonitor International. It is not the first time African countries have made the list of the world’s fastest-growing economies.
In fact, in 2018, an analysis by Researchers Alan Gelb, Christian J. Meyer, Vijaya Ramachandran, and Divyanshi Wadhwa found that Tanzania, Ethiopia, Kenya, and Senegal are sometimes cited as among the most competitive countries in the region.
Their data affirmed that Ethiopia has been moving towards easing logistics constraints through road and rail connections. It also has good air connections.
“It benefits from a stable administration that sees the manufacturing as a central part of its growth strategy. It also benefits from generally low costs. As measured by Purchasing-Power Parity, the general level of prices in Ethiopia is below the level in India and comparable to that of in Bangladesh,” the Research team explained.
Meanwhile, Euromonitor’s data shows that developed economies are experiencing headwinds. At the same time emerging and developing countries are forecast to dominate economic growth in the remainder of the 21st century.
“There are several growing centres of economic power, such as Brazil, Russia, India and China and Mexico, Indonesia, Nigeria, and Turkey that are transforming the global economy and challenging the status of developed economies. By 2030, the Chinese economy will be 1.8 times larger than that of the USA (GDP in PPP terms) and India will constitute around 85.0% of the size of the US or EU economies,” said the study.
The report found that in 2030, 61% of the world’s population will live in urban areas, 995 million will be aged 65.
It concluded that rapid urbanisation and population growth in Asia and Africa will give rise to more connected consumers on the back of an expanding youth population and better connectivity. This is because ageing consumers, delayed marriage and smaller families all drive demand for premium products.
Gelb and his colleagues share some consistencies with the newer report, implying that African countries have demonstrated the potential to break into global manufacturing in a substantial way.