Africa is the future

My friend and colleague at Sebata Group, Thabo Wessie, once tweeted: "Economic growth will ride in the cockpit of technology." I think this is very true when one forecasts the African economic development trajectory.

Last year November, I wrote in this space painting a picture of Africa in 50 years' time. I indicated that Africa will benefit from the aging and declining populations in China, East Asia and Europe. Investors shun aging populations and are attracted to growing populations. The Financial Times has recently reported that the biggest economy in the world, the USA, is also experiencing an aging population phenomenon, and that is why, by 2050, about one in every five Americans will be aged 65.

Africa, on the other hand, will have more than 3 billion people by 2050. According to the report published by the African Development Bank (ADB): "Africa in 50 years' time", Africa is the only region where there will be about 1.87 billion people of working age. This means around 74% of Africans will be of working age.

The Americans and Europeans are tightening their migration regulations, and thus, instead of importing skilled labour, they move their firms to the countries that have such labour. In the past century, China was the best beneficiary of this kind of direct investment. However, due to China's 'one child' policy and the aging population, investors will move their manufacturing plants to Africa, where there is abundant labour.

The ADB foresees a massive decline in Africa's child mortality rate and deaths caused by HIV/Aids-related diseases. It is important to state that technology will play a crucial role to drive economic development in Africa. Africa is the only region that possesses half of the world's arable land and this will attract massive agricultural investments. African food production will feed the whole world, and the World Bank predicts Africa's agriculture and agribusiness markets are destined to top US$1 trillion in 2030.

Technology will play a crucial role to drive economic development in Africa.

Four technologies will be deployed to boost agricultural output in Africa; these include geographical information systems, nanotechnology, biotechnology and mobile technology. SA will become the biggest beneficiary of this African growth. There was a concern that SA was losing its status as the African gateway to Kenya and Nigeria. However, SA's membership of BRICS has restored this status.

Pretoria has shrewdly depicted SA as a representative of the whole African continent in BRICS. The former governor of the South African Reserve Bank, Tito Mboweni, argued against SA's hosting the headquarters of the BRICS Bank. I guess he said this to protect the market share of his employer, Goldman Sachs.

It is in Africa's interest and that of SA in particular to have the head offices of the BRICS Bank here, to drive infrastructure development. Due to the shortage of infrastructure in the form of roads, rail, boarder posts, airports, seaports, etc, it is cheaper for Nigeria to import food from Peru instead of Cameroon.

Other than the BRICS Bank, due to the fact that the Germans, Chinese, and other investors will mainly be operating in Africa, they will work with the African governments to build infrastructure that services their operations and transports their goods. In other words, infrastructure will be built through public private partnerships. It will be in the best interests of the investors to participate in the construction of the infrastructure. In some instances, the public (consumers) will also have to pay for this, in the form of taxes and payments, such as e-tolls.

My advice is that South Africans and other Africans should get used to tolls. Currently, due to the lack of infrastructure, trade among African countries is very limited. In 50 years' time, intra-African trade will increase substantially due to the availability of regional connectivity. This regional connectivity will be brought about by massive construction and/or enhancement of infrastructural projects. The availability of companies, firms, and infrastructure will inevitably lead to free labour movement.

Something good about labour movement is that it will increase the flow of remittances across the African countries. The incremental growth of populations, industrial production, agricultural activities and mining will require huge quantities of water. In certain parts of Africa, there is a lot of water in the ground and technology will be employed to extract such water.

Technology will also be used to harvest rain water. Africa is surrounded by two oceans, the Atlantic and the Indian. Technology will be employed to extract water from these oceans and make it consumable. Moreover, technology will play a critical role in the recycling of water. As a matter of fact, most production activities in manufacturing plants will be done with less water. Technology will play a critical role in promoting intra-continental trading and the supply of water.

I have already stated in my previous writings that SA has been the biggest gold producer for nearly a century, but that production has fallen recently, and the country is now the third-largest gold producer, after China and Australia. The world's largest deposits of platinum group metals, which are situated in Rustenburg, SA, will for the most part be depleted in 100 years' time.

Be that as it may, there are still vast quantities of mineral resources that are beneath African soil. Intensive exploration will unearth these minerals and oil-related resources. This will increase trade between Africa and other regions. It on this premise that I have absolutely no doubt that Africa is the future.