The McKinsey Quarterly has just published a fantastic report highlighting what is driving Africa’s growth. There are a number of perceptions about Africa’s economic growth and investment potential which are blown wide open. Interestingly they note that the rate of return on foreign investment is higher in Africa than in any other developing region, and that collective GDP is $1.6 trillion roughly the same size as Brazil or Russia. The continent is also among the wolrds most rapidly growing economic regions. Global executives and investors must pay heed.

You can read an excerpt below and download a pdf of the article by clicking here

Africa’s economic pulse has quickened, infusing the continent with a new commercial vibrancy.
Real GDP rose by 4.9 percent a year from 2000 through 2008, more than twice its pace in the 1980s
and ’90s. Telecommunications, banking, and retailing are flourishing. Construction is booming.
Private-investment inflows are surging. To be sure, many of Africa’s 50-plus individual
economies face serious challenges, including poverty, disease, and high infant mortality. Yet Africa’s
collective GDP, at $1.6 trillion in 2008, is now roughly equal to Brazil’s or Russia’s, and the continent
is among the world’s most rapidly growing economic regions. This acceleration is a sign of hard-earned
progress and promise. While Africa’s increased economic momentum is widely recognized, its sources and likely staying power are less understood. Soaring prices for oil, minerals, and other commodities have helped lift
GDP since 2000. Forthcoming research from the McKinsey Global Institute (MGI) shows that resources accounted for only about a third of the newfound growth. The rest resulted from internal structural changes that have spurred the broader domestic economy. Wars, natural disasters, or poor government policies could halt or even reverse these gains in any individual country. But in the long term, internal and external trends indicate that Africa’s economic prospects are strong.

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