Africa’s human capital, cities and services to rekindle continent’s economies — MGI report

African governments will need to ramp up investments in digitization, infrastructure, service industry and also to develop talent, and to foster regional collaboration, as a way to improve and increase the productivity of all sectors, which will in turn power Africa’s economic growth going forward, according to a new report by the McKinsey Global Institute (MGI).
The report entitled ‘Reimagining Economic Growth in Africa: Turning Diversity into Opportunity’ argues that while the continent is blessed with a young and vibrant population, rich natural resources, thriving cities, and emerging innovations, African governments need to tap into all these assets to enhance output and add value. It says that individual successes achieved at granular levels in countries, cities, sectors, and companies should serve as “beacons of innovation, productivity, and growth.” McKinsey’s new research indicates that abundant growth and development are still happening in Africa, and, more than ever, are vital for the welfare of the world.
The future of Africa lies in its vibrant cities, the report says, noting that although 57% of the population lived in rural areas in 2019, the continent is urbanizing faster than any other place on the planet. But it urges African governments to invest in the continent’s primary and secondary cities’ infrastructure to support businesses and workers so they can deliver the high productivity needed to increase the pace of economic growth on the continent. Compared to other emerging economies like China and India, Africa’s GDP grew at a relatively slower pace between 2000 and 2019 and even slower over the last decade. But since Africa’s population grew the fastest, at 2.6%, in the same period, this has led to the GDP per capita to remain low, with millions of people still living in absolute poverty. To that end, “critical to the continent’s ability to accommodate its rising population is the built environment and its supporting infrastructure — transportation, power, water and telecom systems,” the MGI report concludes.