In 2010, the McKinsey Global Institute’s report on the African economy — “Lions on the move: The progress and potential of African economies” — highlighted a quickening of Africa’s economic pulse and a new commercial vibrancy. Real GDP had grown at 4.9 percent a year between 2000 and 2008, more than twice its pace in the 1980s and 1990s, making Africa one of the most rapidly growing regional economies in the world. With growth in 27 of the 30 largest economies accelerating compared with the previous decade, Africa was clearly on the rise. But six years on, growth has slowed significantly. Between 2010 and 2015 Africa’s overall GDP growth averaged just 3.3 percent. Is Africa’s renaissance losing its vigor?  

The fundamentals across the whole continent are strong, and long-term growth projections are good. The region is expected to enjoy the fastest urbanization of any region in the world, and to have a larger workforce than either India or China by 2034. Despite recent shocks and challenges, Africa’s household consumption and business spending are both growing strongly, offering companies a $5.6 trillion opportunity by 2025. However, Africa’s manufacturing sector today underperforms those of other emerging economies – output could expand to nearly $1 trillion in 2025 if Africa’s manufacturers were to produce more to meet domestic demand from consumers and businesses, and work with governments to address factors hindering their ability to produce and export goods. To achieve this potential will require Africa’s companies to step up their performance. Africa is home to 700 companies with revenue of more than $500 million per year, including 400 with revenue above $1 billion. However, the region has a relatively small number of large companies. It needs more. Governments will need to address productivity and drive growth by focusing on six priorities emerging from this research: mobilize more domestic resources; aggressively diversify economies; accelerate infrastructure development; deepen regional integration; create tomorrow’s talent; and ensure healthy urbanization. This agenda will require a step change in the quality of African leadership and governance, and active collaboration between the public and private sectors. LINK