African growth to take off in next 40 years, says Standard Bank

Surging populations, rapid urbanisation, adoption of new technologies and a deepening of the financial sector are trends that are likely to propel Africa as one of the fastest-growing emerging markets in the decades ahead.This, according to Standard Bank senior analyst Simon Freemantle, who said in Durban last weekend that the fragmentation of African markets in the past had rendered them difficult to enter, but there were broad trends that would drive economic reinvigoration over the next four decades.Africa's illiquid stock markets and investments in private equity funds were becoming increasingly important for investors because many of the continent's "frontier" economies proved not only to be resilient through the last recession, but present good long-term economic growth opportunities.However, Standard Bank emerging market strategist Yvette Babb said there was a risk that economic growth in Africa may slow in the medium term.This was as a result of exposure to the potential for another recession in advanced countries that may negatively affect demand and prices for the commodities that many African countries export.In turn this development would also contribute to rising inflation in lower-income countries.Mr Freemantle said the African population was likely to double to 2-billion by 2050, supporting a growing consumer base and producing a "demographic dividend" for its services and manufacturing sectors. By 2050, one in four of the world's population would be an African.Rapid urbanisation meant more than half the population would live in urban areas, and "the link between economic growth and urban areas is clear and mutually reinforcing".Cellphone subscriptions, internet and social media usage in Africa were expected to continue to surge to record levels over five years.Food was expected to be the "new oil" for the 21st century, and Africa's agricultural output was set for "explosive growth" as the continent's largely untapped potential became more important to investors.Ms Babb said the growth of democracies in Africa had resulted in an improvement in monetary and fiscal policies.
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