Accenture, the global consultancy firm, said yesterday that Africa is starting to jostle with the BRIC nations and the emerging Asian economies as the world’s top economic growth destination.
The BRIC nations are Brazil, Russia, India and China. Accenture attributed the present drive of the African economy to steady improvement in the sustainability of its growth prospects.
The growth strategy leader at Accenture South Africa, Wayne Borchardt, said Africa’s abundant resources, burgeoning opportunities and rapidly growing middle class are making it a target for investors and businesses around the world.
“Everyone is talking about Africa as the next big emerging market, but the conversation around Africa has always been followed by questions around the sustainability of its growth. That’s all changing,” Borchardt said.
Accenture pointed out that while Africa has traditionally been seen as a supplier of resources, it is suddenly emerging as a supplier of demand, adding that global companies seeking sustainable growth ignore Africa at their peril, as consumer spending today accounts for as much as 60 per cent of the gross domestic product (GDP) on the continent.
Accenture’s figures indicate that the labour force participation rate in Africa has jumped 17 per cent since 2000 to 71.1 per cent in 2009 – and to top it all, the continent holds more than 30 per cent of the world’s minerals and produces more than 10 per cent of the world’s oil.
Also, said the organisation, Africa has the world’s second largest population, with an estimated 955 million people, and a GDP that grew by an average of 6 per cent between 2002 and 2008, making it the second fastest growing region in the world, just behind Asia.
The rapid population increase has seen consumer expenditure balloon by more than 100 per cent, from $376 billion in 2000 to $761 billion in 2007, showing a compound annual growth rate of almost 13 per cent.
Borchardt attributed that to the emergence of an increasingly sophisticated middle class and rapid urbanisation, stressing that in recent years, Africa has seen its financial markets increase in sophistication and efficiency, and generally become more stable, which have encouraged private capital inflows to grow by a factor of five from 2000 to 2007.
The strategist further revealed that African companies currently enjoy an annual return on capital that is 65 per cent higher than those of similar firms in China, Vietnam and India.
Accenture said the cumulative annual growth in tertiary students in Africa since 1975 is 12 per cent, compared to 4 per cent experienced in Latin America and 3 per cent in high-income countries over the same period.
“At the same time, African workers are half as expensive as their counterparts in Central Asia, Latin America and Eastern Europe,” it added.