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The Next Big Thing? The Changing Face of Africa and its Implications for Australia

The Next Big Thing? The Changing Face of Africa and its Implications for Australia. Scott Featherston 17 November, 2010 Lowy Institute, Sydney, Australia. Why are people now excited about Africa?. Strong Economic Growth. GDP and GDP/Capita Growth Rates for Sub-Saharan Africa 1960-2011.

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The Next Big Thing? The Changing Face of Africa and its Implications for Australia

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  1. The Next Big Thing?The Changing Face of Africa and its Implications for Australia Scott Featherston 17 November, 2010 Lowy Institute, Sydney, Australia

  2. Why are people now excited about Africa?

  3. Strong Economic Growth GDP and GDP/Capita Growth Rates for Sub-Saharan Africa 1960-2011 forecast 20 lost years Early optimism A New Africa? Source: World Bank Development Indicators, IMF

  4. Growth that is Diversified Compound Annual Growth Rate (%) Sector Share of Change in Real GDP, 2002-07 (100% = US$235 billion) 6.9% 7.3% 8.7% 5.9% 7.5% 3.9% 8.0% 4.6% 7.8% 5.5% 6.8% 7.1% Source: McKinsey Global Institute

  5. Middle Class Growing, Poverty Reducing Forecast Family Annual Incomes (2000 – 2020) 163m 196m 244m # Families Global (>$20,000) Middle class (>$10-15,000) ~350m new global, middle class, and emerging consumers between 2000 to 2020 (285m people to 634m) Emerging middle class (>$5-10,000) Basic consumer (>$2-5,000) Destitute (<$2,000) ~60m pulled from extreme poverty from 2000 to 2020 (277m people to 220m) Source: McKinsey Global Institute

  6. Demographic Trends: Growing and Young Working Age Population (15-64 years old) (Percentage of total population, 2000-2050) Population Growth Projections (1950-2050) Africa India China Europe North America Source: United Nations World Population Prospect

  7. What’s driving this growth?

  8. Wars and Civil Unrest: 1970 to 2010 Libya – War with Chad, 1980-87 Chad – Civil War, 1965-1979 Central African Republic – Civil War, 1980s and 1990s West Sahara – Moroccan War, 1975-1991 Sudan – Civil Wars, 1955 - present Eritrea – War of Independence, 1958-1991 Burkina Faso – Sankara Coup, 1980s Ethiopia – Civil War, Wars with Neighbours, 1977-2000 Senegal – Casamance War, 1982-2004 Somalia – Civil War, 1991-present An Sierra Leone – Civil War, 1990-2002 Uganda – Anti-Amin/”The War in the Bush”, 1971-1985 Liberia – Civil Wars, 1989-2003 Cote d’Ivoire – Civil War, 2002-present Kenya – Tribal Conflict, 2007 Rwanda – Civil War and Genocide, 1991-1996 Nigeria – Civil War/Unrest: Delta, 1966-present Congo (Brazzaville) – Civil Uprising, 1997-1999 Burundi – Civil War, 1993-2005 Zimbabwe – Civil Unrest, 1965 - present DRC – Civil War, 1998-present Angola – Civil War, 1975-2002 Mozambique – War of Independence and RENAMO War, 1964-1992 Namibia – War of Independence, 1964-1990 South Africa – Anti-Apartheid, 1948-1994 Source: GlobalSecurity.org

  9. Wars and Civil Unrest Today Sudan – Civil Wars, 1955 - present An Somalia – Civil War, 1991-present Cote d’Ivoire – Civil War, 2002-present Zimbabwe – Civil Unrest, 1965 - present DRC – Civil War, 1998-present Source: GlobalSecurity.org

  10. Improving Macroeconomic Conditions Inflation (%) Public Debt (% of GDP) -28% -64% Public Budget Deficits (% of GDP) Labour/Productivity Growth (%) +60% Source: McKinsey Global Institute

  11. Microeconomic Reform Share of African Countries Improving the Business Environment (percent) Acceleration in Real GDP, 2000-08 versus 1990-2000 (percent) 2.1% Source: McKinsey Global Institute

  12. Growing and Diversifying Capital Inflows Composition of Private Financial Flows (US$ billion) Concentration of Gross Private Inflows (% of total and excluding South Africa) Sub-Saharan Africa’s share of total global flows 6.0% 4.1% Source: IMF, Regional Economic Outlook

  13. Improving Political Rights and Civil Liberties % of Free, Partially Free, and Not Free States in Sub-Saharan Africa Political Rights and Civil Liberties in Sub-Saharan Africa Europe PR = 1.1 CL = 1.2 Middle East PR = 5.7 CL = 4.9 Americas PR = 2.2 CL = 2.4 Asia-Pacific PR = 3.5 CL = 3.4 world comparison 32% 22% 46% Source: Freedom House

  14. Improving Corruption? Perhaps. % of People Who Reported Paying Bribes (2005 versus 2009) % of People Who Felt Their Governments’ Anti-Corruption Efforts to be Effective (2007 versus 2009) Not recorded Source: Transparency International

  15. Is Africa the Next Big Thing?

  16. Not Compared to Other “Big Things” … Average Growth Since Initial “Take Off” for Previous “Big Things” (Maximum 20 years, Percent) Time it Takes to Progress, Depending on Average Growth per Capita Achieved (Years) 1961-1981 1950-1970 1980-2000 1966-1986 1992-today 1995-today 1995-today 1995-today Source: World Bank Development Indicators, Growth Commission

  17. The Next Big Thing?The Changing Face of Africa and its Implications for Australia Scott Featherston 17 November, 2010 Lowy Institute, Sydney, Australia

  18. Human Capital – Education Secondary Schooling – developing countries only, apart from OECD (Gross enrolment, Percent) Tertiary Education – developing countries only, apart from OECD (Gross enrolment, Percent) Source: World Bank Development Indicators

  19. Human Capital – Health Life Expectancy – developing countries only, apart from OECD (Years) Infant Mortality – developing countries only, apart from OECD (deaths per 1,000 infants born) Source: World Bank Development Indicators

  20. The Next Big Thing?The Changing Face of Africa and its Implications for Australia Scott Featherston 17 November, 2010 Lowy Institute, Sydney, Australia

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