Africa’s GDP projected to reach $2.3 trillion by 2020
The Chief Executive Officer (CEO), of the Millennium Challenge Corporation (MCC), a US State agency, Mr Daniel W. Yohannes has predicted that Africa’s gross domestic product could be in the region of $2.6 trillion in the next decade.
Citing a leading global consulting firm, McKinsey, Mr Yohannes said Africa’s collective GDP is currently $1.6 trillion and this can be doubled.
“McKinsey, a leading global consulting firm, reported that Africa’s collective GDP is now $1.6 trillion” said Daniel W. Yohannes adding “By 2020, it could be $2.6 trillion.”
Mr Yohannes, who made the observation in a speech he delivered at the just-ended 2011 African Growth and Opportunity Act (AGOA) Forum in Lusaka, Zambia, underscored the point that six out of the world’s ten fastest growing economies during the last decade were in sub-Sahara Africa.
His speech is made available on the MCC’s website.
“And over the next five years, predictions suggest that the average African economy will outpace its Asian counterpart”, he told African exporters, and government officials at the forum.
According to him, signs show that Africa’s economies are poised for dramatic growth.
However, the African Development Bank (AfDB) in its 10th African Economic Outlook (AEO) report has indicated that Africa’s economic growth is forecast to decline to 3.7 percent in 2011, compared to growth of 4.9 percent in 2010 due to recent event happenings in North Africa plus other factors.
The 2010 figure was an improvement on the 3.1 percent rise in 2009, which had been depressed by the global economic crisis.
But Mr Yohannes still argues that the number of households with discretionary income is projected to rise by 50% over the next 10years.
He indicated that foreign direct investment (FDI) into the region surged from $9 billion in 2000 to $62 billion in 2008 which is “almost as large as the flow into China, when measured relative to GDP”.
He noted many sectors in sub-Sahara Africa such as agriculture, consumer products, and telecommunications have the potential for significant growth in the years ahead.
In order for Africans to realize their dreams, Mr. Yohannes urged African governments to take ownership, assume responsibility, and be accountable for their development and prosperity which can create sustainable environments for growth that will open up opportunities for investment and trade.
“We know that for Africa to develop, it has to participate more fully in the global marketplace.”
He said one of the reasons that Africa has lagged behind is because it has not developed its capacity to trade, within the continent or with the wider world.
“Consider that intra-African trade accounts for only 10% of total exports”, he said.
By eliminating import duties for nearly 6,500 products, the MCC Boss said AGOA created new possibilities for African businesses and entrepreneurs—recognizing that the private sector, not the government, is the most dynamic engine of growth.
According to Mr Yohannes, in 2010, “imports to the United States under AGOA grew by 31%. Compared to AGOA’s first year in 2001, they grew by 438%.”
He added “Even without oil and mineral-related products, we have made progress…We saw an 18% increase last year in non-energy, non-mineral imports.”
In a related development, the United States Trade Representative Ron Kirk announced during the forum, a new Obama Administration initiative to build trade capacity called the African Competitiveness and Trade Expansion (ACTE) initiative.
The ACTE, Mr Kirk said will provide $120 million over four years to build on the success of Africa’s regional trade hubs and help African nations to realize AGOA’s full potential.
By Ekow Quandzie