KEY GROWTH SECTORS:
While the extractive and commodities sectors have traditionally driven Africa’s economic development, new trends in GDP growth, population expansion, and infrastructure development highlight new sectors for transformative growth.
Sub-Saharan Africa holds the majority world’s arable land suitable for agricultural expansion. To seize this promise, however, critical investments in human capital and infrastructure are needed. While Africa’s agriculture sector employs 65% of the labor force, it only generates 29% of GDP. Part of this inefficiency stems from a tradition of smallholder farming: smallholder farms comprised of less than one acre represent 80% of all farms in sub-Saharan Africa. In addition, farmers do not have reliable and consistent access to markets or efficient infrastructure. A clear sector for growth, it is not yet living up to potential.
Clear opportunities for growth and investment exist linking small holder farmers to markets and building the infrastructure necessary to make African agricultural production more efficient. Without technologically efficient inputs or machinery, small holder farmers cannot produce effectively. Without affordable access to power and water, the cost of agricultural production and processing is too prohibitive for investment and a lack of modern, maintained roads leads to extremely high transport costs, Storage infrastructure remains vital to reducing postharvest losses and evening out supply against demand.
Investment and partnership opportunities in the agriculture sector are both enticing business opportunities and key to the continent’s economic growth.
The World Bank and Agriculture in Africa
World Development Report 2008: Agriculture for Development
Agriculture and Rural Development
Slideshow: Agriculture in Africa
Website: The Global Food Crisis
Africa’s Path to Growth: Agriculture
With projections of continued population growth, economic development, and a growing non-communicable disease burden to match communicable health challenges, healthcare remains a key growth sector for sub-Saharan Africa. In fact, some estimate that Sub-Saharan Africa’s healthcare market will rocket to $35 billion by 2016, with further increases on the near horizon.
Large populations in sub-Saharan Africa remain critically underserved by the health care industry, and despite government efforts to bring social services to remote and rural regions, over fifty percent of Africans lack reliable access to a hospital or physician. Shifting demographics—with more people moving to urban centers from rural areas—furthers this service deficit. In addition, rapid economic growth and an emerging middle class have dramatically increased demand for both basic and boutique health services. Investments in healthcare education and training are also critical, as the availability of qualified medical personnel lags far behind the rest of the world. In addition, as hospital development across Africa increases, so too will opportunities for international healthcare investors involved in hospital equipment, pharmaceuticals, medical technologies and other related services and products.
ICT AND TELECOMMUNICATION
Tremendous growth in Africa’s information and communications technology (ICT) sector is rapidly changing the continent’s macroeconomic landscape and offers significant opportunities for multinational investment. Digital technology is fast becoming part of everyday life in the region, with smartphone use already firmly established for individuals and business and African governments embracing ICT development as a critical component of their development plans.
Internet usage alone in Africa grew 27% between 2009 and 2013, and total mobile subscriptions in sub-Saharan Africa stood at about 70% at the end of 2013. Mobile banking is among increasingly popular services, with 58% of mobile users in the region showing an interest in using mobile banking and mobile wallets in future. Other key sectors such as agriculture, health, education and governance are experiencing remarkable growth using the power of ICT. With new developments in technology allowing Africa to “leapfrog” the traditional development of the telecommunications and technology secotrs, the market will continue to expand and transform.
The figure above shows the mobile market penetration in Sub- Saharan Africa