What do the 2020s have in store for investors? Big-picture thinker David Dowsett sets out the ten trends he foresees emerging over the next decade, along with their investment implications.
TREND 8: The rise of Africa
The increasing importance of the African continent has long been forecast but has been held back by corruption and economic mismanagement. Things will change in the 2020s due to the raw power of population change.
As the rest of the world gets older, Africa doesn’t. The median age in Africa is 18, in Japan it is 46. Of the 800 million addition to global population forecast to occur by 2030, half of it will be in Africa.
Nigeria’s population will grow by 70 million of the next 10 years, more than any other country except India. The region’s share of global GDP will rise slowly but accordingly.
Economic policy management has generally improved over the past decade. Regional powers such as Nigeria, Kenya and Ethiopia have seen the benefits of lower inflation and can act as signposts for the rest of the region.
Egypt has recovered from the uncertainties of the Arab Spring to become a popular fixed income investment. Africa as a region is now firmly established in the ‘frontier’ space; over the next decade it will become a more mainstream investment destination.
Africa’s importance will also rise for geopolitical reasons. China’s influence has exploded due to the ‘One Belt One Road’ programme. This reflects the Continent’s mineral wealth but will not go unchallenged.
The US, for geostrategic reasons, and Europe, because of its concern about migratory flows, will look to increase their presence in the 2020s.
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