TedTalk – Charles Robertson: Africa’s next boom

africab

Title and Link: Africa’s next boom (2013)

Presenter: Charles Robertson is an economist and a leading emerging markets specialist.  He is the Global Chief Economist and head of the macro-strategy unit at Renaissance Capital.  Robertson is also the author of The Fastest Billion: The Story Behind Africa’s Economic Revolution (2012).  Charles was ranked the number-one economics and macro analyst for emerging Europe, the Middle East and Africa for 4 years in a row.

Key Points – This TedTalk is a really interesting look at the economy of sub-Saharan Africa.  In particular, it discusses how the recent booms in Asia are a good indication of what is coming up for Africa if it continues to progress as it is doing now.  He also talks about what factors are leading to this boom, such as democracy/leadership, less debt/more investment and demographics.

Summary

  • Africa is booming
    • Per capita income since 2000 has doubled
    • Life expectancy has increased by one year, every year, for the last decade
    • HIV infection rates are down 27% (which is 600,000 fewer people a year)
    • Deaths from malaria are also down by 27% according to the World Bank (thanks largely to bed nets)
  • Every country/civilization grows (the Romans, Scots, etc. all grew) – but when does it happen?
    • For many developed countries it began during the industrial revolution
  • So why Africa now?
    • Quality of the leadership
      • 90’s = greatest leader in the world was from Africa
      • Many great leaders in Africa are transforming the economic potential of their countries
    • Western countries are engaging (amount of debt owed by African countries has been reduced from 70% in 2000 down to about 40% of GDP)
      • High debt = have to make a choice between servicing debt and social services for citizens
      • Private sector debt in developed countries is very high
      • Africa is the next China – great government financing and high private sector debt (over the last 30 years)
      • FDI (Foreign Direct Investment) has been hugely increasing over the last few years in Africa
        • Most of this is lent by Western countries (60%) plus some from India and China
          • This is often put into sectors like energy, with Africa exporting as much oil as Saudi Arabia
          • Companies are also investing in telecommunications and shopping malls
    • Demographics are changing
      • Number of 15-24 year-olds in China is dramatically decreasing (prime targets for cheap factory jobs) – 20-30% fall in the next decade
      • Therefore, set up factories in Africa and South-East asia, with high (and growing) numbers of young people up to 2050
        • In the 1970’s, only 9% of people in Africa had a high school degree, whereas countries like Turkey and Mexico had about 25- 30% (which is what Africa is at now)
          • Education allows people to get out of rural poverty and start industrializing for more wealth
    • Most of Africa is now democratic (strong democracies + fragile democracies)
      • 2012 – Ghana elections (battled over education) – encourages leaders to invest in their people
      • Positive virtuous circle
    • Wealth is strongly correlated to corruption (rich countries are usually less corrupt, due to a large middle class)
      • Therefore, best way to make Africa less corrupt is to invest
  • Future predictions
      • 2000 – The Economist titled : Hopeless Continent – Economists looked at past trends and saw Africa growing at 2%/year, and assumed the same for the future (pretty bleak – since population is increasing faster than that)
      • 2012 – The Economist titled : Africa Rising (growth is more like 5.5%/year over the last 10 years)
    • India is a great example of a country that suddenly shot through the roof
      • Asia was about 10 years ahead of India in growth
      • Africa is about similar in the GDP growth (just 20 years behind India)
        • Based on this growth the forecast for Africa is a $29 trillion economy by 2050 (from $2 trillion now) – bigger than Europe + America
        • Life expectancy to go up by 13 years, population to double from 1 billion to 2 billion, household incomes to increase 7 times
        • Hopefully Africa can avoid some of the mistakes we made, in order to let Africa grow even faster
          • Make this the century for Africa!

Final Thoughts – I think the best part I took out of this talk was an optimistic outlook for Africa. For so long it has been viewed through a lens of starvation, poverty, corruption and hopelessness.  Now, Robertson is not only saying that it is possible for Africa to boom over the next 50 years, but that it is likely based on the trends of countries like China.  I believe that many African scholars already think this way, but it is important to spread these thoughts to the wider public, in order to increase public awareness about the realities of life in Africa and reduce the stigma for all things African.

Advertisements

About Amanda

Hi, I’m Amanda! Originally from Ottawa, Canada, I am currently living with my partner (Steve) in Sucre, Bolivia for the next year. I work in the unique space between industrial design and international development – but what does that even mean? I’m passionate about working WITH marginalized communities in a way that utilizes design to improve the lives of different types of people around the world. I have worked, studied, traveled, and researched on every continent (except Antarctica), and most recently I lived in Ghana, Bangladesh and Nepal. I love exploring new cultures and learning more about myself along the way.
This entry was posted in TedTalks, Videos, and Webinars and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s