According to the World Bank, Africa has what it takes to create a new development path. Africa’s attention is now on creativity, enterprises, and possibilities away from deficiencies and gaps. Entrepreneurs paying attention to the continent have already started investing in the region. They’re aware of the emerging opportunities.
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Most African nations heavily invest in better infrastructure to ease businesses and market accessibility. One can’t ignore the expanding middle class, which increases consumer spending.
So, we will delve into some reasons why this continent is unique and understand why is Africa important to the world.
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Why Is Africa Important to the World? 8 Reasons
Youthful Population
The African population is one of the fastest-growing in the world. According to UN estimates, 60% of the continent’s population will be below 25 years old by 2050.
There’s a reduction in the world’s workforce. However, the opposite is happening in Africa. The workforce is expected to be 1.1 billion young people, which is higher than a combination of India’s and China’s workforce. A booming young population is a catalyst for growth. It’s also a ready market for consumer goods.
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Untapped Natural Resources
The African continent has always been rich in natural resources. The wealth of natural resources includes oil, minerals, and gas. Also, Africa utilizes only 2% of its renewable water resources compared to 5% globally. This continent has major mineral deposits compared to other continents.
For instance, 21% of gold in the world is found in Africa. Besides, 56% of the African Gold is in South Africa. Namibia is the fourth largest producer of uranium, while DRC accounts for 13% of all copper produced in Africa.
Here’s a detailed table showing the 10 richest African nations with valuable minerals they can export globally and create wealth and development in the area.
Country Minerals mined Democratic Republic of Congo Oil, copper, cobalt, coltan, gold, and diamonds Niger Uranium, coal, gold, and cement Namibia Uranium. South Africa Gold, diamonds, platinum, copper, uranium, vanadium, coal, chromium, iron, and nickel Zambia Copper, emerald, and cobalt Ghana Gold, diamond, oil, gas, aluminium, and bauxite Angola Oil, petroleum, diamonds, iron ore, phosphates, copper, gold, and manganese Nigeria Oil, iron ore, coal, limestone, lead, and zinc Tanzania Tanzanite, gemstone, and gold Botswana Coal and gem diamonds
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Ease of Entry- Uplifting of Trade Barriers
Most African governments are welcoming foreign investors, and some are giving them incentives to operate. Similarly, these countries are implementing policies to attract Foreign Direct Investment (FDI). Some of these regulations include:
- Investment protection guarantees
- Tax incentives,
- Streamlined regulations,
- Special economic zones,
- Improving their business environments.
In the last ten years, most African countries have been on a tremendous path of improving the ease of business in their territories.
Expected Economic Growth
Africa is diverse, with different and unique opportunities, development, and challenges. The availability of natural resources coupled with digital transformation and regional integration have positively boosted the region’s economic growth.
In the recent past, most African nations have experienced vast economic growth. This has been made possible by a rising middle class, friendly economic reforms, and a growing consumer demand.
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The continent is diverse, and its growth is uneven. For instance, in 2023, West Africa is expected to grow by 3.9%, while East Africa is expected to grow by 1.8% in the same year. Did you know that Africa has the largest free trade area, with a population of 1.3 billion people? Well, this aspect creates a favorable environment for investors.
The launch of the African Continental Free Trade Area(AFCFTA) in 2021 is one of the significant steps of growth established. It aims to boost intra-African trade by more than 30%. Also, it’ll create more than 8.5 million new jobs. Lastly, it will create welfare gains of close to 16 billion by 2035.
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Agriculture and Biodiversity
Another reason why Africa is important to the world is agriculture and biodiversity. Foresight Africa reported that 200 million hectares in sub-Saharan Africa are uncultivated and are ready for production use.
The coffee, tea, and cocoa produced in Africa have a ready market globally. The uncultivated land is a potential for investors to grow crops and feed the world. The continents grow different herbs and plants that are used in pharmacology.
The biodiversity in Africa is extraordinary. The continent has between 50,000 and 73,000 species of plants. Also, there are more than 100,000 invertebrate species, numerous mammals, birds, and freshwater fish.
Partnership with International Communities
For a long time, Africa has been an active participant in global forums. For instance, in the African Union and United Nations. The continent’s voice, view, and influence are necessary for climate change, human rights, and peacekeeping.
Besides individual investors showing their interest in investing in Africa, governments and international organizations have also been at the forefront. These organizations are offering additional platforms for the investors to earn more revenue. They do so by offering support and facilitating investments in Africa.
According to the United Nations, these partnerships should be done with lots of respect, transparency, and knowledge of mandates and comparative advantage.
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Security and Stability
African nations have made recognizable progress in political stability and governance. They’re supporting each other in peace initiatives. Such programs attract foreign investors who realize the environment is ideal for entrepreneurship. A security threat in Africa is a global threat; thus a need to come together and seek peace.
Offers Tourism Opportunities
Besides the biodiversity, Africa has amazing and unique wildlife. This attracts people from all over the world. According to UNESCO, there are 145 world heritage sites in Africa. They, too, attract visitors. From visiting the pyramids in Egypt to the Royal Palaces in Abomey, Benin. From Fort Jesus in Mombasa, Kenya, to the amazing Dinka tribe in South Sudan.
The natural beauty and cultural diversity across the continent are another reason why Africa is important to the world. Foreign investors are looking at the opportunities to explore tourism and hospitality across Africa.
Africa is not only a growing continent but also home to undiscovered natural resources. Statistics all point to expected economic growth. The youthful population is a ready market for different new products. The reasons why Africa is important to the world are many. What else can you add to our list?
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