By Yahya Abdulqader

The Economic Development in the African Continent

• Geographical facts• The world's second largest

continent (11,668,599 sq. miles).

• 20.4 % of total land area and 6% of earth's total surface area.

Facts about the African Continent

• Demographics facts• 1.1 billion people or 16%

of the world’s population (the second most populous continent ).

• 2,000 languages,(25% of the languages of the world).

Facts about the African Continent

• Demographics facts• Over 50% of Africans are under the age of 25.• 40% of adults in Africa are illiterate (2/3 women). Adult literacy rates are

below 50%” in some African countries

Facts about the African Continent

• Political facts• Africa is comprised of 55 separate

countries and nine territories, and two de facto states .

• The continent is widely known by conflicts and unrests.

Facts about the African Continent

• Natural resources• 30% of the earth’s remaining mineral

resources.

• 12% of the world's oil reserves.• 40% of its gold.

• 80% to 90% of its chromium and platinum.

• 60% of the world's underutilized arable land and has vast timber resources.

Facts about the African Continent

• Economic facts• The poorest 25 nations in the world are all in

Africa (recent United Nations report).

• Over the last decade, Africa’s per capita income has grown at a rate nearly identical to that of the rest of the world.

• Average annual growth of 5.1 per cent over the past decade.

• Nigeria: would achieve 7.1% annual GDP growth, which could make it a top-20 economy in 2030, with GDP of more than $1.6 trillion.

Facts about the African Continent

• 2000-2012• 89% of African countries have

improved their capacity to deliver economic opportunity and human development.

• 67% of countries made progress in fostering political participation, gender equality, and human rights.

• 40% of countries strengthened their safety and rule of law.

Evaluation of Economic Development of the African Continent

• Economic Components• Tremendous natural resources.

• Human element.• 200 million people aged between 15 and 24,

Africa has the youngest population in the world.

• 2000-2008, working age population (15-64 years) grew from 443 million to 550 million.

• By 2035, Africa's labor force will be bigger than that of any individual country in the world.

• By 2020, 40% of Africans have some secondary or tertiary education.

Evaluation of Economic Development of the African Continent

• Why Africa?• The fastest growing continent in the world.

• The costs of starting a business, for instance, have fallen by more than two-thirds over the past seven years.

• Delays for starting a business have been halved.

Evaluation of Economic Opportunities and Threats in the African Continent

• Economic Opportunities• Agriculture: 60% of the world’s total uncultivated, arable land.

• Tourism: tourist arrivals into Africa in the year 2010 exceeded 49 million.

• Mining of solid minerals: iron ore, coal, bauxite, gold, tin, lead, zinc, diamond, cobalt, gold, copper and other resources.

• Infrastructure: the continent requires about $80 billion annually to cover infrastructure needs. It has 13% of the world’s population but 48% of the share of the global population without assess to electricity.

• Fast moving consumer goods: Africa’s consumer spending next year will be in the region of $1 trillion.

Evaluation of Economic Opportunities and Threats in the African Continent

• Economic Threats• Political instability.

• Lack of infrastructure: African currently invests just four per cent of its collective GDP in infrastructure, compared with China’s 14 per cent.

• Governmental legislations

• Corruption

• Tax legislation

Evaluation of Economic Opportunities and Threats in the African Continent

• Economic Strategy• Yum Brands Inc. of the U.S. recently said

it wants to double its KFC outlets in the next few years to 1,200.

• Wal-Mart Stores Inc. has agreed to pay nearly $2.5 billion to buy 51% of South Africa's Massmart Holdings Ltd.

• SABMiller PLC has entered Ethiopia and established a factory that bottles and sells Ethiopia’s holy water.

Recommendation for Investors in the African Continent

• Identifying market segments.• Deciding which present the greatest

opportunity that represents a firm’s target markets.

• Developing a market offering that it positions in the minds of the target buyers as delivering some central benefits.

Segmentation

• Creating a partnering relationship between the poor and companies.

• Achieving sustainable win–win scenarios.

Bottom of Pyramid (BOP)