Telling Africa's Growth Story Part 1
Telling Africa’s Growth Story
As Africa’s global economic clout rises, telling and understanding the continent’s growth story is becoming critical both for Africans and for all of its partners, current and potential.
The core of Africa’s Growth Story rests on three core pillars: Connectivity, Technology Appropriation; and last but not least, the Better Governance Paradigm.
African growth is undeniable: the 55 countries of the African continent started the millennium with an aggregate GDP of US$587bn in 2000, then reached US$1 trillion (US$1tn) in 2007, US$2.3tn in 2018 anUS$3.4tn in 2020.
This means that over 2000-2020, a time period which included the 2008 global financial meltdown and economic crisis, the 2014 commodities crunch of 80% and the start of the Covid-19 (C19) global pandemic lockdowns, Africa’s GDP has multiplied by 6, from US$587bn to US$3.4tn. (for comparison, Germany’s current GDP is US$3.8tn.)
Based on the average of the past 5 years, Africa’s GDP is on course for US$5tn in 2025, US$10tn in 2030 and US$20tn in 2035; roughly the size of US GDP today.
In 2018, foreign direct investment (FDI) in Africa surpassed US$100bn.
Seven of the top 15 countries in the world for extreme poverty reduction between 2000 and 2015 are African countries. The global leader is Tanzania which reduced its extreme poverty rate from 86.1% to 49%.
These are just some of the highlights of the ongoing Africa Growth Story, but because these milestones are rarely if ever tied together in a coherent narrative, a story as impactful to the global economy as the Four Asian Tigers, the EU integration of Eastern Europe’s former Warsaw Pact countries, India’s liberalization or China’s Reform and Opening Up, is rarely recognized or analyzed.
So, let’s begin now to unfold the story of Africa’s growth.
THE CONNECTIVITY of GOODS, ENERGY and DATA
The first core pillar of African growth is African connectivity, the circulation of goods, energy and data which enables growth to take off. The continent’s specificity is that the 55 African nations are simultaneously rolling out connectivity in these fields at the domestic, sub-regional, continental and global levels.
The Connectivity of Goods or Physical Connectivity
A good example of physical connectivity are Cameroon’s burgeoning connections to its neighbors in Central Africa:
-the Yaounde-Brazzaville Corridor with Congo,
-the ‘Ring Road’ linking with northeast Nigeria,
-the Cameroon-Nigeria Cross River Bridge,
-the Ngueli Bridge and the dry ports on the Douala-N’djamena Corridor with Chad and on Beloko along the Douala-Bangui Corridor with the CAR.
All of these are part of a wider network of domestic and sub-regional infrastructure aimed at boosting Central Africa’s internal trade and global connectivity by connecting the main economic centers of its landlocked countries to the international deepwater ports of Limbe, Kribi and Douala on Cameroon’s Atlantic coast. This sub-regional network forms the Central African leg of the Trans-African Highway network (TAH) rising throughout the continent.
The ongoing Lagos-Abidjan Corridor connecting Nigeria to Ivory Coast through Ghana, Togo and Benin to also boost regional and global trade, are part of the West African leg of the TAH. The Trans-Sahara Road accomplishes the same between North, West and Central Africa by linking together Tunisia, Algeria, Mali, Niger, Chad and Nigeria.
In East and Southern Africa, the strategic corridors of Nacala connecting Zambia and Malawi to Mozambique’s Indian Ocean port city Nacala, the North-South Corridor connecting the Great Lakes region from northern Rwanda to Zambia while servicing eight countries in total, the Lobito Corridor connecting Zambia and the inland states of the DRC to Angola’s Lobito port, and the Nairobi-Lusaka Corridor linking Kenya to Zambia via Tanzania, are all part of the TAH leg in their respective sub-regions.
In complement to the TAH, the Africa Integrated High-Speed Railway Network is also taking shape, with the African Union (AU) aiming to connect the continent’s main cities and economic centers with 62 connections of 74,000 km by 2063. The network is starting with three pilot lines set to be completed by 2033: the Dar-Es Salam to Kigali, the Kampala to Bujumbura and the Johannesburg-Walvis Bay-Gaborone. Notwithstanding, the independent national high-speed rail projects already in operation such as Morocco’s Al-Boraq (Casablanca to Tangiers), Kenya’s SGR (Nairobi to Monbasa), Tanzania’s SGR line (Dar Es Salam to Morogoro) or the Addis-Ababa-Djibouti line (Ethiopia and Djibouti); or the high-speed rail lines still in construction like the upcoming Kumasi-Takoradi line in Ghana.
The Connectivity of Energy
African connectivity also extends to the circulation of energy and the energy sector as a whole, and it often parallels the continent’s transport connectivity.
The West African Gas Pipeline (WAGP), the sub-region’s first gas transmission system, is operating along much of the same route as the Abidjan-Lagos Corridor in linking Nigeria, Benin, Togo and Ghana over 678 km.
The East African Crude Oil Pipeline (EACOP) set to ferry crude from Uganda’s Lake Albert oilfields to Tanzania’s Tanga port will compound East Africa’s burgeoning transport connections with oil and gas processing, refining and storage facilities.
Similarly, the Trans-Mediterranean (Transmed) connects North Africa’s Gas to Europe through Algeria, Tunisia and Italy. And its spare capacity has emerged as a precious lifeline for Europe as gas supplies have become scarce under the impact of the Ukraine conflict.
The African Renaissance Pipeline under construction aims for its part to set up a direct gas transportation network throughout Southern Africa, from an initial route linking Mozambique’s massive Rovuma Basin gas fields to Springs in South Africa, and from there connecting branches to Eswatini, Zimbabwe, Zambia, DRC, Botswana, Malawi, as well as to both of the initiators domestically.
Completing this oil and gas activity, the upcoming Central African Pipeline Network is set to organize oil and gas production, refining and exports too, along three pipelines: the Central North for Cameroon, Chad and the CAR, the Central West for Equatorial Guinea, Congo and Gabon, and the Central Southern for Angola, the DRC, Rwanda and Burundi.
Far from being limited to hydrocarbons, African energy connectivity also includes hydropower as a prime source of energy for domestic consumption and for pan-African export.
Next to the growing pains of the mammoth 11,000 MW Grand Inga dam project in the DRC, set to produce as much energy as 20 nuclear power plants and to provide electricity from South Africa to Nigeria among others, many other hydropower projects are being completed and coming online. The 200MW Kiira and 180MW Nalubaale hydropower plants and the 250 MW one in Bujagali have ended the chronic ‘load shedding’ in Uganda. All three and the Grand Inga will be part of the East Africa Power Pool, the integrated electricity market being built by East Africa and Nile River countries, in spite of the tensions caused between Ethiopia and Egypt by the completion and launch of the 6,000MW Grand Ethiopian Renaissance Dam (GERD).
The 420MW Nachtigal dam and the 810MW Grand Eweng both on Cameroon’s Sanaga River are similarly centerpieces for an emerging Central Africa Power Pool (CAPP).
For its part, the 3,050MW Mambila hydropower project set to transform electricity access and the economy in eastern Nigeria will integrate with the emerging West African Power Pool (WAPP). While the Southern African Power Pool (SAPP) has been firmly guiding the region’s power market and access since 1995.
Nuclear energy is a future major contributor to African power pools. The advent of small modular reactor (SMR) technology is offering an entry point for African economies: SMR consists in building reactors of 10-100MW at a cost ranging from tens to a few hundred million US dollars (USD) each, which can be placed individually in remote locations and whose output can be combined as needed; as opposed to the traditional multibillion USD, multi-GW nuclear power plants. In consequence, just as with nanosatellites in the space sector, SMR reactors are popular with African countries as a solution to an immediate need, here increasing power output and access while limiting carbon emissions, and as a route to critical long term technologies.
The momentum for African nuclear energy is thus rising with rival global powers vying to offer expertise and partnerships to develop the continent’s industry: a consortium of US and Japanese companies (NUScale Power and IHI Corp) have started working with Ghana as part of the FIRST program (Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology) alongside Namibia, Rwanda, Kenya and South Africa. While Russia’s Rosatom, the global leader in nuclear plant construction, is building a nuclear science center equipped with+ a 10MW water-cooled reactor in Rwanda, as well as developing similar partnerships throughout Africa including Uganda, Ethiopia and South Africa. France and Canada are also offering their own SMR technology and partnerships to African nations.
Renewables are also a rising contributor to Africa’s national grids and regional power pools. All countries assign in their national energy mixes at least 20-25% to solar (PV), wind, geothermal and bioenergy. All segments of renewables are booming: as of 2020, there was 10,431GW of installed PV capacity, with South Africa’s massive cluster in Northern Cape Province, Morocco’s Noor Ouarzazate Solar Complex and Egypt’s Benban Solar Park leading African output. Kenya is leading the continent in geothermal with 863MW of installed capacity (7th globally) and an upcoming multimillion-dollar geothermal training center to share Kenyan expertise with its East African neighbors. Wind power and bio-energy are also present in North, East Africa and the Southern Cone, though from low bases. Bio-energy has particular potential in the agriculture supply chain. Off-grid solar, now a multibillion-dollar business in West, Central and East Africa providing last mile electricity access in rural areas, completes the picture of a thriving African renewables where green bonds can both accelerate growth and reduce carbon emissions.
The Connectivity of Data / Digital Connectivity
Data connectivity is central to the rising African connectivity as digital networks are connecting African peoples, enabling the continent’s technology and powering Africa’s digital economy.
The first and main exhibit is the Cairo-to-Cape Town fiber optic cable. The cable connects Egypt to South Africa through one single route cutting through the whole continent. Along the way it provides high speed broadband to citizens of both countries, and to all the others along the route or to those who connect to that pan-African cable. Cassava Technologies (formerly Liquid Intelligent Technologies) the company which built the cable, has now also completed an East Africa-West Africa fiber optic cable connecting the undersea cables on the continent’s Atlantic and Indian ocean coasts. These two routes are part of Cassava Technologies’ One Africa Broadband network. It has connected the DRC to it through a 2,600 km cable, as well as neighboring Zambia, Tanzania, Botswana. With over 73,000 km of pan-African fibre, the company aims to create a network linking the continent as a whole.
However Cassava Technologies isn’t the only player in Africa’s digital connectivity, the Central African Backbone Project is another fibre optic cable network built by Cameroon’s telecoms utility Camtel and is based on a Cameroon-Chad route: connecting in phases to the CAR, Gabon, the Republic of Congo, Equatorial-Guinea, Sao-Tome and Principe, and the DRC; currently in its last phase.
These pan-African networks are in addition to dozens of national fibre optic cable networks that have been rolled out in individual African nations.
A boom in undersea cables is underway to complement the land fibre ones: the South Atlantic Inter Link (SAIL) between Cameroon and Brazil, Meta’s 2Africa and Google’s Equiano, and several others.
Connectivity of Goods, Energy and Data leads to industries
This combined surge in the connectivity of goods, energy and data is leading to a surge in industrial parks, special economic zones (SEZs) and manufacturing industries.
In Senegal’s Diamniadio New City, the country’s first data center is now operating as well as the Diamniadio International Industrial Platform (DIIP2) where garments, PVC pipes, food packaging, magnetic e-cards and electric bicycles are produced. Nigeria’s Lekki free trade zone is hosting the massive Dangote refinery plant and manufacturing for multiple industries including steel, construction and building local and foreign automobiles; while also emerging as an infrastructure hub and major urban center. Cameroon’s Kribi Port Industrial Zone also combines its role as port, highway and railways hub with that of emerging regional center for diverse industries including oil refinery, steel, agro-processing and others. Other emerging industrial parks and SEZs include Bagamoyo, Tanzania, Doraleh, Djibouti, Lamu, Kenya, Maputo, Mozambique, Boke-Dapilon, Guinea, and Owendo, Gabon. Overall, there are more than 40 emerging industrial parks/SEZ across Africa.