Linked herein an interesting McKinsey video from the 2010 Fortune Global Forum in Cape Town, South Africa where McKinsey Publishing’s Rik Kirkland spoke with Absa’s Maria Ramos, Coca-Cola’s Bill Egbe, and McKinsey’s Norbert Dörr about the sustainability of African growth and its related, underpinning fundamentals. One primary founding factor supporting output remains the African consumer; 80 million households earn at least the equivalent of $5,000 annually, the point where discretionary spending commences—an increase of 60 percent in eight years and trending towards an eventual target of 125 million. Moreover, continued urbanization will see an increase from 40 to 50 percent of Africans living in big cities by 2030.
Ramos, for one, pointed out the poential depth of the continent’s untapped potenial:
“There are 20 companies in Africa with revenues of over $3 billion. For the size of our continent, we need many more companies with revenues of $3 billion or more. Additionally, there are millions more small- and medium-sized entrepreneurs. They, too, need access to finance. Now, if we are able to do that and to open up those markets, you unlock economic value and entrepreneurship. And Africa is a place of entrepreneurship.”
These points fit in nicely with some of those made by Manoj Kohli, head of Bharti Airtel Ltd’s international operations, in a recent intervuew. Looking forward, he said, the African population will double to two billion people whereas India will go up to 1.6 billion and China, up to 1.4 billion. Moreover, “[Africa] has consumer spending of $1.4 trillion, which is far higher than India’s; a middle class of half a billion. T he median age is 17-18 (which is much lower than the Indian median age of around 24-25); and 25% of global youth will be in Africa.