Economic Growth and Development in Africa

Economic growth in Africa is currently on an upswing according to the World Bank, after a two-decade-long decline which ended in 2016. Aggregate growth in Africa is predicted to reach 3.2% in 2018 and 3.5% in 2019, with countries including the Ivory Coast, Ethiopia, and Kenya expected to exceed this. The World Economic Forum reported in 2015 that small and medium-sized enterprises (SMEs) accounted for 80% of the region’s employment. A 2017 paper by Dr. Samuel Muiruri Muriithi of Daystar University, Kenya, estimates that this figure is now closer to 90%. Given the importance of SMEs to the region, it is necessary that they can function efficiently as drivers of economic growth. Muriithi points to issues with lack of funding and inadequate training for managerial staff, as well as region-specific issues such as power shortages, which prevent SMEs reaching their potential.

The region relies heavily on SMEs to support economic growth and create jobs for the local community. To meet these aims, SMEs need to have growth which is sustainable, and sufficient access to capital during economic downturns. During a downturn, the costs of rent, salaries, and goods and services may exceed the profits taken by the business. With the number of Africans joining the working-age population set to exceed that of the rest of the world combined by 2035, employment opportunities are essential. Job opportunities will facilitate the growth of a new middle-class, many of whom will live and spend locally if the rate of job creation is enough to meet the demand. The success of SMEs in Africa is not only beneficial for the communities in which the jobs are created, but they benefit the entire global economy. The opportunities created by Africa’s growing economy is why Geneviève has pledged to invest in 150 small businesses in the Ivory Coast.