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Western media are missing a big story in Africa, and it's not the World Cup.
Africa is not an amorphous continent. It is 53 individual countries with different challenges and rates of development. It is, in the words of a recent study by London's Chatham House think-tank, “the foundation of the global supply chain.” Just look at the figures. It has almost 40 percent of the mineral resources required for global industry, 15 percent of the world's agricultural land, as well as 10 percent of the fresh water supplies. ” The United States now imports more oil from Africa (22 percent) than from the Middle East (17 percent).
It is true that many African countries suffer from poverty and instability. Africa is taking off from a very low base. Its share of global trade is less than 4 percent. Its combined economies total less than 2 percent of global income. But from an investor's point of view, that is an opportunity as well as a challenge.
In the past decade, a lot has been happening in Africa, but most of the Western media haven't found that newsworthy. Economically, it has become one of the world's fastest growing regions. Almost 75 percent of African children go to school compared to 58 percent ten years ago. Mobile phone subscriptions have ballooned from 55 million to 350 million in five years. An estimated 330 million Africans are now considered middle class. African growth is not just being fueled by rising commodity prices. Africans themselves are becoming increasingly important consumers.
China knows this, as do a number of other emerging economies such as Turkey and Brazil. But the developed western countries seem stuck in a post-colonial mindset that sees Africa as a foreign aid problem rather than an investment opportunity. That's not only short-sighted. It's stupid. Just ask the Chinese entrepreneurs who are building and investing all over Africa.
As the McKinsey Global Institute (a business research consultancy) points out in a recent study, investors and businesses cannot afford to ignore the continent's potential. The Western media are missing a big story. And it has nothing to do with soccer.