A recent report by the African Development Bank projected that, by 2030, much of Africa will attain lower-middle- and middle-class majorities, and that consumer spending will explode from $680 billion in 2008 to $2.2 trillion.
Bank estimates suggest that Africa’s GDP could increase to over US$15.7 trillion in 2060, from a base of US$1.7 trillion in 2010. Consequently, income per capita expressed in current US dollar terms should grow from US$1,667 in 2010 to over US$5,600 by 2060. While this would represent a major leap forward in standard of living, it is still less than the current South Korean per capita GDP of US$17,000. However, a less optimistic scenario sees real GDP growth accelerating up to 2020, before decelerating to around 5% per annum. The total GDP would then be $12.2 trillion in 2060 and per capita GDP about US$4600.
Africa is projecting to be about where China is now on a per capita GDP basis in 50 years.
Seven of the world’s 10 fastest-growing economies are African. The continent is famously resource rich, which has surely helped, but some recent studies suggest that the biggest drivers are far less customary for Africa, and far more encouraging for its future: wholesale and retail commerce, transportation, telecommunications, and manufacturing.
The dramatic change in the global economic landscape will be both a cause and a consequence of the emergence of a new Global Middle and Rich class (GMR).
By 2030, the GMR population in developing countries will have overtaken that in advanced countries, and in 2060 about 60 percent of the world’s GMR population will reside in developing countries.
Projections show that the GMR population in the developing G20 economies – China, India, Russia, Brazil, Mexico, Argentina, Indonesia, Turkey and South Africa – is likely to grow from 739 million in 2009 to 1.9 billion in 2060. In Africa, the middle class is expected to increase from 355 million (34 percent of Africa’s population) in 2010 to 1.1 billion (or 42 percent of the population) in 2060.
By 2060, no country in the G20 will have more than 5 percent of its population living in extreme poverty. China and India – nations that were homes to 48 percent of the world’s extreme poor in 2005 – will be the driving force behind this shift, and many of those lifted from poverty will join the new GMR.
By 2060, Africa’s population will have radically shifted from rural to urban areas. The continent’s urban dwellers in 2010 made up nearly 40 percent of the total, and this will rise to 50% by 2030 and 65% by 2060. In this configuration, domestic demand will be boosted by new patterns of consumption. Domestic sales will benefit from the rise of the middle class, improved telecommunications and banking operations and by the development of infrastructure in general.
On a regional basis, East Africa is projected to remain the least urbanised. Central Africa, on the other hand, is likely to overtake Southern Africa by 2050. Urban growth, usually linked to major migration flows from rural areas, presents daunting challenges for development, as inflows of migrants into cities have to be provided with access to land, infrastructure and basic services.