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Africa often gets left out of the emerging markets conversation. If anything, most of the continent is still considered a frontier market, or an emerging market of the future.
While countries like China represent the most attractive growth opportunities today, Africa is arguably the most exciting opportunity for the next century.
In one word: demographics.
“In Africa, the “young continent,” projections are for the African population to exponentially grow from current levels, close to Europe, to four times the size, and approaching Asia, in the next 100 years (see Figure 3),” said Citi’s Philip Watson.
“The emergence of the Africa demographic boom, with its underdeveloped infrastructure and untapped resources, suggests a period of rapid growth for those African economies that are increasingly well-managed,” he added.
And the anecdotal growth stories are incredible.
“The same is true for specific industry sectors,” said Watson. “One example of this is the Telecom industry. According to a survey by the International Telecoms Union (ITU), Africa recently became the world’s fastest-growing mobile phone market. Mobile phone usage in the continent has increased at an annual rate of 65% over the past five years, which is twice the global average. Nigeria has become one of the fastest growing markets in the world for mobile communications, propelled by a young population, market liberalization and telecom-sector reforms, with an estimated 88 million mobile phones in use compared to a population size of 170 million. Are investors positioning their portfolios for these demographic changes?”
As much of the developed and developing world struggle with unfavorable demographic trends, Africa’s trends point to growth.
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