The African Business Review Jan-Feb 2014 | Page 18

Africa: Rising from the
burden of deficits
By Olutoyin Oyelade

As of 2009, the UN reports that the Frontier Markets represented 17 of the 20 fastest growing economies in
terms of average annual GDP growth. For several frontier countries, the GDP growth in 2011 is forecasted
to be greater than China’s and India’s, like Qatar 16%, Ghana 13%, Mongolia 12%, Eritrea 10% and Ethiopia
9%. Frontier markets account for 22% of the world’s population and 7% of the world’s GDP, but only 3% of
the world’s market capitalization, compared to emerging markets with 63% of the world’s population, 42%
of world GDP and 42% of market capitalization. However, the frontier market index outperformed the EM
index in six of nine years of up-markets and in five of six years of down- markets.
Rise of the phoenix

Africa is on the march again. Described as the last big emerging market
with a compound 6% annual economic growth rate, from oil sands, to
pyramids, mineral deposits and gold mines, the gaps that stalled Africa’s
integration into the larger comity of nations are now in focus. Whether
it’s seen as a country or continent, the story of Africa is no longer about
the aids received but its growing rate of infrastructure investments
facilitated by Private sector partnerships and international investors.
Increasing government reforms across the top 10 reformist nations that
contribute 76% of its GDP (including Next-11s such as Egypt and
Nigeria, then others: Ghana, South Africa, Egypt, Angola, Kenya), now
mark the face of some African Nations. Continental growth drivers
include states that are creating an enabling environment, facilitated by
favourable regulatory framework, joint venture initiatives and a steadily
rising capital inflow of $84b p.a (as at 2012-excludes remittances, aids).
Confidence is returning to the region as most of its economies begin

18 | The African Business Review

to target a single digit inflation rate. Its rising young population and
reduction in conflicts across the continent is engendering business
stability, continuity and sustainability. The question is how will Africa
get to its destination?

It is no longer news that opportunities have developed wings.
The big returns are no longer where we used to find them. The predicted

Continental growth drivers include states that are
creating an enabling environment, facilitated by
favourable regulatory framework, joint venture
initiatives and a steadily rising capital inflow.
global market recovery has failed to rally the markets; and returns are
not the way they used to be in the first world. The truth is that even
the BRICS are no longer at ease. As the cheese melts, so also is the