According to the African development Bank (AfDB) as well as many other sources, the economy of Africa is developing faster than any other continent.
Africa’s middle class has been vastly expanding revealing that about 350 million Africans nowadays earn between $2 and $20 a day.
The share of the population living below the poverty line in Africa has decreased to 39% last year, from 51% in 2005.
Africa’s collective gross domestic product (GDP) per capita reached $953 last year, while the number of middle income countries on the continent rose to 26, out of a total of 54.
Much acknowledgement has been given to the private sector as it is because of improved economic governance and an improved business climate throughout Africa’s private sector. Due to such kind of development, trade and investment has seen a major rise and the annual rate of foreign investment increasing fivefold since 2000. All in all, Africa’s global competitiveness has been significantly improved.
The AfDB has reported that the increase in Africa’s economic growth e has been because of regional economic co-operation and intra-African trade, and it is these drivers that will bring about growth in Africa’s future.
Economic challenges for Africa
Insufficient infrastructure development is still main limitation to the continent’s economic growth. The AfDB also disclosed in their latest report that Africa currently invests just 4% of its collective GDP in infrastructure, compared with China’s 14%. While sustainable infrastructure involves momentous up-front investments, it will prove cost-effective in the longer term.
Regardless of the overall optimism and growth regarding Africa’s economy, the AfDB warns that considerable differences in incomes are still problematic.
The challenge will be to address continuing inequality so that all Africans, including those living in remote rural communities, disadvantaged neighbourhoods, and delicate states are able to benefit from this economic growth.