Last week I attended a conference at MIT (Massachusetts Institute of Technology) in Boston. Hosted by the Sloan Business Club, this fascinating talk covered the progress of Africa in the last ten years, highlighting tremendous opportunities for the future. The speaker, Acha Leke; Cameroonian by birth and Partner of McKinsey & Company, was named one of the ‘young global leaders’ to watch by the World Economic Forum in 2007.

During the talk Acha highlighted Africa’s growing population, skills and consumer power. By 2020 Africa is expected to have a collective GDP (Gross Domestic Product) of $2.6 trillion, consumer spending of $1.4 trillion, while the number of working Africans is set to reach 1.1 billion by 2040 – surpassing that of India and China. 2020, more than half of Africans households will have discretionary spending power and urbanisation is set to rise, suggesting a huge demand for consumer goods and services in the future.

I found it refreshing to note that this development reflects more than just a ‘resource’ boom. Currently Africa’s owes just 24% of its GDP to natural resources, a figure which is predicted to drop even further. The rest comes from key sectors such as wholesale and retail trade, infrastructure, transportation, telecommunications and manufacturing.

Reasons for this development include political and macroeconomic stability and microeconomic reforms. African leaders are starting to appreciate the need to compete on an international landscape. Hostilities between countries are ceasing; promoting the stability needed to foster growth. Governments are also making conscious efforts to lower inflation and budget deficits while reducing trade barriers, cooperate taxes and strengthening regulatory and legal systems. 

Although there is still a long way to go, steps are being made in the right direction. The world is taking notice; foreign direct investment increased from $9 billion in 2000 to $62 billion in 2008. Foreign companies who have successfully expanded into Africa have done so by establishing joint ventures with the local government and expert consultancy firms, while recruiting skilled talent with regional know how. All it takes is the patience to seek true opportunity, and the tenacity to follow through.

Four of the world’s top fastest economies are African (these include Ghana, Angola, Ethiopia and Mozambique). A number provide some of the highest return on investment in the world. Surely this is worth some looking into?