PWC’s new report ‘Global Economy Watch’ highlights sub-Saharan Africa as the fastest growing region in Africa, with economic hubs such as Lagos, Kinshasa, Nairobi and Johannesburg.
The report identifies the ‘Next 10’ biggest cities in the region that will attract major foreign investment. These include Dar es Salaam, Tanzania and the Luanda capital of Angola.
According to a PWC press release, Stanley Subramoney, Strategy leader of PwC’s South Market Region, says: “The report projects that economic activity in the ‘Next 10’ cities could grow around $140 billion by 2030. This is roughly equivalent to the current annual output of Hungary.”
“In addition to the trends with regard to high rates of GDP growth, rapid urbanisation and the so-called demographic edge that sub-Saharan Africa possesses, a number of other economic phenomena in the region are starting to appeal to the global investment community,” says Dr Roelof Botha, economic advisor to PwC.
Major investment areas include exploiting discoveries in the burgeoning mining sector and tapping into newly found energy resources, namely gold and gas. It is projected that there will also be significant private sector investment in infrastructure and capital formation.
Subramoney maintains that there are three challenges that could possibly stifle the growth of the ‘Next 10’ big cities – “Low quality of ‘hard’ infrastructure like roads and railways; Inadequate ‘soft’ infrastructure like schools and universities, and Growing pains arising from political, legal and regulatory institutions struggling to deal with a bigger and more complicated economy”
“The challenges that policy makers face is to convert Africa’s demographic dividend into economic reality by overcoming these hurdles. History suggests this will not be a quick or easy process. Infrastructure development is a key driver for progress across Africa and a critical enabler for sustainable and socially inclusive growth. However, investors should form their own plans to mitigate these problems by supporting infrastructure skills and development programmes,” concludes Subramoney.