Africa's economic growth is set to accelerate, according to development economist Joe Studwell. In his book, How Africa Works: Success and Failure on the World's Last Developmental Frontier, Studwell argues that the continent's growth is driven by urbanisation, demographics, and foreign investment. He expects African economies to grow at an average rate of 4% per annum, with some countries experiencing growth rates of 9-10% per annum, comparable to East Asia.
The demographic story is a key factor in Africa's growth, with the population density expected to reach Asia's levels in 1960 by 2030. This, combined with the continent's faster urbanisation rate than anywhere else, will drive growth by creating efficient labour divisions, affordable infrastructure, and higher-yielding agriculture.
Foreign direct investment from China and the Middle East is also playing a significant role in driving growth. Chinese firms are investing in Africa due to better margins than in China, while the Middle East is branching out into services such as ports and real estate. However, Studwell notes that there is no evidence of a grand strategy by China to secure dominance of these areas.
The growth of Africa's economies has significant implications for global trade and the UK economy. As African economies grow, they will become increasingly important trade partners for the UK, potentially leading to increased trade and investment between the two regions.