A new report from the McKinsey Global Institute (MGI) Lions on the move: The progress and potential of African economies projects that at least four groups of industries in Africa could together generate as much as $2.6 trillion in annual revenue by 2020, or $1 trillion more than today.
Africa’s GDP rose twice as fast from 2000 through 2008 as it did in the preceding two decades. Africa’s growth acceleration was broadly based, resulting from more than the global commodity boom. All sectors contributed, including finance, retail, agriculture, and telecommunications. Key to the growth surge were government reforms that created greater political stability, improved the macroeconomic environment and fostered created a healthier business environment.
The outlook for further growth in Africa’s resource sectors remains promising. We estimate the total value of annual production could grow steadily at between 2 percent and 4% a year, to $540 billion by 2020.
Today, 40% of Africans live in cities, a portion that is close to China’s and continuing to expand. As in other developing economies, urbanization in Africa is creating jobs, boosting productivity and lifting incomes. The number of households with discretionary income is projected to grow by 50% over the next 10 years, reaching 128 million
By 2030, the top 18 cities in Africa could have a combined spending power of $1.3 trillion.