One: Africa’s population and its role in economic growth. Will it be a catalyst or a burden?
Africa is the fastest-growing major area in the world, with a population growth of 2.5%. Africa’s population is predicted to double by 2050; about 2.4 billion Africans. Consequently, more than half of the people predicted to be added to the global population between now and 2050 will be born in Africa.
The question surrounding this growth in population is concerned with what its impact on the economy will be. No doubt, an important question to answer because Africa is also the world’s poorest continent and has to figure out a way to harness its human resource for development. The thing that works in Africa’s favour is the fact that she also has the youngest population in the world, with 60% under the age of 25 and a median age of 19. Young people are often the most optimistic, ambitious, and innovative. They are keen to learn the newest technologies and are also willing to take more risks.
The question surrounding this growth in population is concerned with what its impact on the economy will be. No doubt, an important question to answer because Africa is also the world’s poorest continent and has to figure out a way to harness its human resource for development. The thing that works in Africa’s favour is the fact that she also has the youngest population in the world, with 60% under the age of 25 and a median age of 19. Young people are often the most optimistic, ambitious, and innovative. They are keen to learn the newest technologies and are also willing to take more risks.
Though population sceptics have for a long time disputed the fact that a big population can directly and positively impact an economy, East Asian countries like India and China have been able to achieve economic prosperity and improvement in the quality of life in spite of population growth. Africa must pay attention to the way these countries managed to use their large populations for economic growth and learn from their example. The growth there has been attributed to the increase in productivity, due to the development and utilization of innovative technologies by the young educated population, who formed the majority of the growing population. This is a model Africa can certainly emulate, by seeking to educate their young in the most relevant ways and offer them the skills required to innovate African solutions. A number of economists believe that, if African countries accelerate pragmatic policy measures that will enhance the productivity of their population; the continent might be able to match China’s rapid rise over the last 50 years.
Two: China’s polarizing involvement in African economics.
For the African economy, the 21st Century has brought with it a drastic shift in economic partnership. China became Africa’s largest trading partner in 2009 and has subsequently widened the gap with Africa’s second largest trading partner, the United States of America.
It was announced by the Bank of China that by 2025, China will have provided Africa with over 1 trillion USD in financing, including direct investments, soft loans and commercial loans. A number of economic voices have commented that China’s policy is deliberately convoluted as it blurs the lines between foreign aid, direct investment, service contracts, labour cooperation, foreign trade and export. China claims that it wants to be able to create the most adaptable projects that address the local realities in the recipient country.
It was announced by the Bank of China that by 2025, China will have provided Africa with over 1 trillion USD in financing, including direct investments, soft loans and commercial loans. A number of economic voices have commented that China’s policy is deliberately convoluted as it blurs the lines between foreign aid, direct investment, service contracts, labour cooperation, foreign trade and export. China claims that it wants to be able to create the most adaptable projects that address the local realities in the recipient country.
However, because of the nature of the policy, it becomes difficult to capture which portion of the financing is, or should be, categorized as aid. African governments welcome more and more Chinese loans, since most of them are concessionary loans. This has inevitably contributed to a debt problem in an increasing number of countries; the kind of debt which is an impossible burden for these economies. This inevitably increases Chinese leverage to make demands for her continued participation in these economies.
It has led to the influx of inexpensive Chinese products in the African market. Small Chinese traders have flocked to Africa, competing head-to-head with their African counterparts. And has resulted in growing antagonism with African market traders, who find it impossible to price their own products so competitively. African consumers, on the other hand, are grateful for the competition because it gives them not only more, but also cheaper options. They also appreciate the visible progress “Chinese money” has enabled in the past years, particularly with the development of infrastructure like roads, and health facilities. Perhaps these factors that improve the quality of life of many African lives, drown out the seemingly endless media coverage and social media discussion about Chinese debt traps, imported labour, substandard Chinese products, neo-colonialism, counterfeit goods and so on. Because, in spite of this dissent, positive public perception remains surprisingly durable, with positive views of the Chinese edging higher in most African countries.
Three: Is financial innovation the driving force behind Africa’s wealthiest nation?
Embracing fintech and making Mauritius a hub for Africa was one of its government’s national priorities in 2019. Its International Financial Centre has proven to be safe, trusted and competitive, and the country can serve both Anglophone and Saxophone Africa.
So, the Mauritian government has made a concerted effort to promote Mauritius as a reliable and effective trade and investment platform for the continent; also leveraging its geographically strategic position to drive investment into the continent.
Mauritius is a small Island tucked away in the Indian Ocean. It is immensely beautiful, with its beaches, ethnic diversity and multicultural population of about 1.3 million people. It maintains a relatively low profile considering the fact that it is Africa’s wealthiest nation; boasting the continent’s highest GDP per capita of 11,693 USD.
So, the Mauritian government has made a concerted effort to promote Mauritius as a reliable and effective trade and investment platform for the continent; also leveraging its geographically strategic position to drive investment into the continent. Mauritius is a small Island tucked away in the Indian Ocean. It is immensely beautiful, with its beaches, ethnic diversity and multicultural population of about 1.3 million people. It maintains a relatively low profile considering the fact that it is Africa’s wealthiest nation; boasting the continent’s highest GDP per capita of 11,693 USD.
There are a number of reasons Mauritius has been able to build a thriving and diverse economy and draw in foreign investment at an unprecedented rate. Some of these are: political stability as the 24th most peaceful country in the world, a low tax regime at only 15% and it does not levy taxes on dividends. It is the 9th freest economy; free of government interference and it ranks 1st in Africa for ease of doing business with a well-developed banking system and stock market. All of these and more make it possible for Mauritius to be an Investment hub both for Africa and Asia. Its advanced technological network, especially in financial services, uniquely qualify it to broker relationships between investors and host countries. Besides, the explosion of fintech in Africa, creates even greater possibilities for the function that Mauritius is looking to perform in Africa’s economy.
Fintech in Africa has the greatest potential to positively influence the lives of its population and make a marked difference. In Sub Saharan Africa particularly, the increase in mobile phone technology has led to exponential growth in financial inclusiveness with the emergence of the mobile money option. To Africa’s benefit, Mauritius has had the foresight to capitalize on its advantage in this field, just like Lord Desai observed. “With fintech triggering a major transformation of the financial services sector, Mauritius finds itself in a unique position to leverage on its expertise, as well as its good repute in the financial services sector, to attract fintech entrepreneurs and position itself as the fintech and technology hub for Asia and Africa and to spearhead the development of artificial intelligence in the region”.
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One: Africa’s population and its role in economic growth. Will it be a catalyst or a burden? Africa is the fastest-growing major area in the world, with a population growth of 2.5%. Africa’s population is predicted to double by 2050; about 2.4 billion Africans. Consequently, more than half of the people predicted to be added […]
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One: Africa’s population and its role in economic growth. Will it be a catalyst or a burden? Africa is the fastest-growing major area in the world, with a population growth of 2.5%. Africa’s population is predicted to double by 2050; about 2.4 billion Africans. Consequently, more than half of the people predicted to be added […]
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