CGD in the News

INSEAD Knowledge: How Africa Could Astonish the World

June 29, 2021

From the op-ed:

Starved for sources of long-term growth, the global economy is increasingly drawn towards Africa. Not only is Africa the world’s fastest-growing continent, but it is also demographically the youngest. In addition, recent trends suggest its growth is becoming more sustainable and equitable. Starting in the mid-2000s, the extractive industries such as oil and gas began declining as a share of overall FDI for the continent. A new trend of growth led by the service sector and manufacturing has emerged.

In line with these developments, we see a more pan-African style of business thinking starting to take shape. The continent is arguably at least as diverse as Europe or Asia, with 54 countries and a variety of significant regional differences. In times when major economies seem to be moving away from tightly integrated global trade, African countries are strengthening their economic ties with one another. The African Continental Free Trade Area (AfCFTA), which commenced this year, is the largest of its kind by total number of participating countries. If all goes to plan, the reduction of tariffs between African nations, as well as other trade-liberalisation measures, may hike the GDP of most economies on the continent by as much as three percent, according to the UN.