The fundamentals for continued growth remain strong in Africa, though the continent’s growth path has experienced diverging trajectories over the last five years, said Omid Kassiri, McKinsey & Company Partner in the Nairobi Office during his speech made at the China office of the Bill & Melinda Gates Foundation in Beijing on December 6, 2016.
Kassiri was invited to make the speech by China-Africa Media Reporting and Research Project of Israel Epstein Center for Global Media and Communication at Tsinghua University. His presentation focused on the McKinsey report on the African economy titled Lions on the Move II: Realizing the Potential of Africa’s Economies, released by McKinsey Global Institute, the consulting firm’s business and economic research arm, in September 2016.
The economies of Egypt, Libya, and Tunisia were negatively affected by the political turmoil of the Arab Spring, and Africa’s oil exporters were left vulnerable due to the decline in oil prices. However, the rest of Africa continues to enjoy strong and often accelerating growth, according to the report.
Manufacturing is a vital engine of economic development. Kassiri pointed out that the manufacturing base is quite low and has been growing slowly in Africa. “There is potential to double manufacturing output in Africa over the next 10 years,” he told ChinAfrica. “African countries and government policy makers need to take bold action to achieve this.”
Kassiri also said that Africa needs to create a sound environment for companies to grow, as demonstrated by the proportionally low number of large companies across many parts of the continent. China has become an increasingly important partner in Africa’s growth agenda. He called on African countries to develop a robust and fact-based Chinese strategy and to come up with their own approach to engaging with China in a proactive way. “Sit together with Chinese counterparts and come up with policies and approaches that help strengthen the ties,” he recommended.
Furthermore, Kassiri advised Chinese companies investing in Africa to have a long-term mindset. “As you come and establish yourself, learn about the local culture and opportunities, integrate yourself with the local business community, and you will reap the benefits of this approach,” he said.
He believes the opportunities are now considerable and growing in Africa. “Africa has a young population and a growing labor force, which is a highly valuable asset in an aging world,” he said. “The continent is expected to enjoy the fastest urbanization in the world, with over 190 million people moving to urban centers and 15 cities with a population of over 5 million people expected by 2025.”
“To lock [in] the opportunities, both the Chinese and Africans have an important role to play in shaping the future together,” he said, adding that in this way the future will be mutually beneficial and sustainable.
