Africa 2024: A continent of opportunity

Africa 2024: a roadmap
We believe that Africa will be the economic and investment story of this century. However, it is a continent of 54 countries, each with its own potential, pitfalls and capacity to absorb different forms of investment. In this second edition of our Africa series (the first was published in 2021), we outline the challenges facing the continent of Africa, alongside the potential that we believe exists. We examine each country in turn and draw conclusions about the possibility and desirability of investments.
Why Africa?
Before turning to the country detail, it may be worth outlining why we think Africa represents such an opportunity. First, Africa is big, accounting for 23.0% of the world’s surface area and 24.3% of its agricultural land (see Figure A1, which puts Africa’s resources in a global context). It has the capacity to be an important source of food.
It is also home to some of the world’s biggest mineral reserves. In particular, it is well endowed in important industrial metals such as platinum group metals (90.6% of global reserves), cobalt, uranium and graphite, while also being an important source of gold and diamonds. The “Largest African countries” information in Figure A1 shows which countries are best endowed in each category.
Africa would appear to have limited hydrocarbon energy resources but it is well endowed with important renewable sources. Our own calculations (based on the intensity/duration of sunlight and land surface area) suggest that Africa has 30% of the world’s solar resources. However, that is an indication of potential and in 2022 Africa accounted for only 1.4% of global solar energy generation. With appropriate investment, Africa could become a world leader in the generation of such energy.
Figure A1 – Resources of Africa in a global context (% of global total)
|
Africa |
Americas | Asia | Europe** | Oceania | Largest African countries |
Working age (15-64) population (2020) |
15.0 |
13.4 | 61.5 | 9.5 | 0.6 | Nigeria, Egypt, Ethiopia |
Working age (15-64) population (2100) | 41.4 | 9.8 | 43.0 | 5.1 | 0.6 | Nigeria, D.R. Congo, Ethiopia |
Surface area | 23.0 | 29.3 | 23.9 | 17.3 | 6.5 | Algeria, D.R. Congo, Sudan |
Agricultural land | 24.3 | 23.5 | 34.8 | 9.6 | 7.9 | Sudan, South Africa, Nigeria |
Inland water area | 9.9 | 48.5 | 19.5 | 20.7 | 1.5 | D.R. Congo, Tanzania, Uganda |
Forestry (area) | 15.6 | 39.3 | 15.4 | 25.1 | 4.6 | D.R. Congo, Angola, Tanzania |
Fisheries production (2021) | 7.0 | 13.0 | 69.7 | 9.4 | 0.9 | Egypt, Morocco, Nigeria |
Oil reserves | 7.2 | 32.7 | 53.0 | 7.0 | 0.1 | Libya, Nigeria, Algeria |
Natural gas reserves | 6.9 | 12.3 | 58.0 | 21.6 | 1.3 | Nigeria, Algeria, Egypt |
Coal reserves | 1.3 | 25.2 | 30.9 | 27.9 | 14.7 | South Africa, Zimbabwe |
Solar resource*** | 31.0 | 27.2 | 21.5 | 12.0 | 8.3 | Algeria, D.R. Congo, Sudan |
Renewables power generation (2022) | 1.2 | 25.3 | 46.3 | 25.2 | 2.0 | South Africa, Egypt, Morocco |
Nuclear energy generation (2022) | 0.4 | 34.8 | 28.7 | 36.1 | 0.0 | South Africa |
Hydroelectricity generation (2022) | 3.6 | 33.2 | 44.5 | 17.7 | 1.0 | Ethiopia, Mozambique, Zambia |
Electricty generation (2022) | 3.1 | 23.8 | 54.6 | 17.4 | 1.1 | South Africa, Egypt, Algeria |
Gold production (2022) | 25.3 | 29.7 | 23.2 | 11.1 | 10.6 | Ghana, Mali, Burkina Faso |
Diamond reserves | 39.7 |
50.6 | Botswana, D.R. Congo, Angola | |||
Platinum Group Metals reserves |
90.6 | 1.6 | 7.8 | South Africa, Zimbabwe |
||
Cobalt reserves | 58.4 |
7.3 | 7.6 | 3.1 | 16.4 | D.R. Congo, Zambia, Madagascar |
Graphite reserves | 23.9 | 29.6 | 37.7 | 7.7 | Mozambique, Madagascar, Tanzania | |
Lithium reserves | 1.1 | 54.4 | 10.7 | 0.2 | 22.1 | Zimbabwe |
Rare earths reserves |
1.6 |
20.4 | 63.1 | 9.9 | 4.9 | Tanzania, South Africa, Madagascar |
Titanium reserves | 11.7 |
12.9 | 41.7 | 4.9 | 28.7 | South Africa, Madagascar, Mozambique |
Uranium reserves |
21.8 |
16.9 | 23.8 | 12.8 | 24.8 | Namibia, Niger, South Africa |
Notes: Reserves are shown where possible but production is used in cases where reserves are not available. Totals across regions may not always add up to 100% because some sources use “Other countries” as a category, with no regional detail. See appendices for detailed source information. *Working age population is 15-64. ** Europe includes Greenland and Russia *** Solar resources is the product of global horizontal irradiance and surface area.
Source: Energy Institute Statistical Review of World Energy, International Atomic Energy Agency, International Hydropower Association, NASA, Nuclear Energy Agency, United Nations, US Geological Survey, World Bank, World Gold Council and Invesco
Further, according to an Everoze analysis conducted for the International Finance Corporation (IFC), Africa also has substantial potential to develop wind energy: enough to generate 7-times the global output of electricity in 2020 and to satisfy the continent’s electricity demands 250 times over – see here. The Everoze analysis identified Algeria as the African country with most wind energy potential (and which we also identify as having the most solar potential).
However, perhaps the most important resource available to Africa is its human capital. Though it only accounted for 15.0% of the world’s working-age (15-64) population in 2020, United Nations’ projections suggest its share will rise to 41.4% by 2100, close to that of Asia which in 2020 accounted for 61.5% (see Figure A1).
In fact, Africa is the only region expected to experience decent working-age population growth to the end of the century with annualised growth of 1.5% predicted between 2020 and 2100. The only other region expected to show growth over that timeframe is Oceania (+0.4% annualised), though if we split the Americas, North America is expected to register annualised growth of 0.02%. At the other end of the spectrum, Europe’s working age population is expected to shrink by an annualised 0.5% to 2100.
This matters because we think economic growth is linked to population growth and, on this basis, we expect Africa to continue growing faster than the rest of the world (World Bank data suggests that sub-Saharan Africa enjoyed annualised real GDP growth of 4.0% from 2000 to 2022, while the world economy enjoyed growth of 2.9%).
It is also important because Africa will have an abundance of a resource (workers) that will become increasingly scarce in many other parts of the world. Coupled with enormous potential for renewable energy, plentiful agricultural land and mineral resources, this demographic advantage suggests Africa could become both the factory and the breadbasket of the world.
As outlined in the next section (“Challenges abound but the opportunities are enormous”), the formation of the African Continental Free Trade Area (AfCFTA) and the accession of the African Union to the G20 are important steps that could help Africa realise its potential.
What are the obstacles?
Realising this potential will rely on the ability to attract investment flows and this is perhaps the biggest challenge facing the continent. As evidenced in the individual country sections and the cross-country comparison section, many countries are either in a state of conflict/crisis, are distrusted by the outside world or do not have the legal frameworks, institutions and financial markets required to attract funding from private overseas sources. The military coups in Burkina Faso (2022, twice), Gabon (2023), Guinea (2021), Mali (2020 and 2021), Niger (2023) and Sudan (2021) are cases in point.
As we outline in the next section, apart from obstacles that are inherent to Africa, the involvement of China, Russia, Europe and the US has not always been to the benefit of the continent and the challenge now is to harness such interest in a positive way.
Hence, the challenge for the outside investor is to spot not only the potential but also the feasibility and the particular risks that can accompany investment in Africa. However, each country is different and in what follows, we try to distil the information contained in the rest of this document to an assessment of the likely source of funds for each country (aid, multilateral financing vehicles, non-governmental organisations and overseas private sources such as businesses and institutional investors).
What’s in this document?
To help make informed decisions, we have compiled a wide range of indicators for each of the 54 countries.
In the two-page country sections, the following information is shown in chart format: demographic projections to 2100; economic structure; historical data for growth, inflation, unemployment, government budget, external balances, debt ratios and credit ratings; the evolution of risk metric rankings (political stability, corruption perceptions, business operational risk and competitiveness); the path of CO2 emissions (both per capita and per unit of economic activity) and financial indicators (policy rates, bond yields and exchange rates).
Also contained within those country pages is tabular information such as: basic information (formal country name, capital, currency, language, religions, form of government and next election dates); surface area, population, GDP, GDP per capita and World Bank income classification; demographic and social indicators (population forecast, life expectancy, education/literacy rates and urbanisation rates); economic data (mobile phone penetration, natural resource contribution to GDP, migrant remittance inflows, foreign direct investment, net international investment position, FX reserves, major exports and major export markets); political and business environment metrics (EIU Democracy Index and Corruption Perceptions Index) and investment data (investment freedom, stock market capitalisation and largest quoted companies).
Finally, the cross-country comparisons section shows a ranking of countries (and, where possible, positioning within a global context) for a range of concepts: size, demographic dividend, economic structure, industrialisation & urbanisation, stability, business environment, social indicators, economic potential, adoption of technology, openness to investment, external financing and climate change.