Ideal Tax Operation

Africa’s Main Obstacles to Fast Growth

Growth is on the incline in the African continent recently, with seven out of ten of the world’s currently fastest growing economies being in Africa. Despite this positivity though, the number of people living in poverty in sub-Saharan Africa has increased as well, up 40% to 414 million from 1990 to 2010.

The problem facing Africa as a whole, is the present lack of available employment for the citizens of each country. It’s estimated that around 12 million people will be entering the workforce every year over the next decade, but unfortunately this just means that there are just increasingly more unemployed people, with 60% of the unemployed population being the youth just entering the market.

Creating employment through better infrastructure

The first step that each African country should take to curb this high unemployment rate is to greatly improve their manufacturing, agriculture, retail, and hospitality sectors. Within this improvement, the use of available technology needs to be integrated at a fundamental level across all sectors, as well as fueling new business and employment opportunities of its own.

Innovations in mobile technology have already enabled African countries to grow in leaps and bounds, as well as allowed the average citizen access to a level of technology which they’ve never experienced, which in turn has served to bring up their standard of living significantly. These advancements have served to not only improve communication within Africa, but has also resulted in a more connected commerce system, allowing for a higher economic flow within countries pushing better internet penetration.

When China found itself in a similar position with improved broadband and communication systems in place, it opened up the country’s workforce to outsourced employment options that serviced employers from all over the world. As Africa’s broadband penetration increases, the more opportunities the continent will find open to them in the future.

Africa’s greatest stumbling block towards improved connectivity though, lies on the ground floor, in each country’s current physical infrastructure. In order to allow undeterred growth, all transportation infrastructure, such as airports and roads, need to be upgraded, as well as improved cabling needs to be laid, to facilitate better electricity and internet penetration throughout the continent.

Currently Nigeria, Africa’s largest economy, doesn’t even generate as much electricity as the small island of Singapore, despite being home to expansive natural gas reserves.

Foreign Investment

It’s a tall order for countries to simply improve on every quarter, and so in order for Africa to take full advantage of their current growth potential, there is a big need for foreign investment.

Unfortunately, investments require long term stability, in order to attract big investors, and Africa is still not the safest investment, with many countries experiencing ongoing unrest and constant political uncertainty. It is because of this, that Africa must look within its own boarders for valuable aid and alliances.

At the moment, Africa has the lowest rate of intra-trade of any continent globally, at a mere 15% of total trade annually. This is slowly being changed by the emergence of regional blocs in Southern, East and West Africa encouraging greater cross-border trade, but these improvements still have a way to go before a sizeable change is felt.

Beyond these regional blocs, a functioning African Union needs to be developed, allowing for easy trade between all countries. Only when this happens will Africa be able to stand on its own to facilitate its estimated levels of growth in every sector. An African Union, much like the European Union, will mean that there will be a better flow of wealth between the various African countries, enabling those with more natural resources to aid those with less, bringing the whole continent to a better economic level overall.


  1. Viswanathan Shankar, “Africa’s inclusive growth potential”, Business Day, 4 August 2014. Available at:
  2. Nicole Cassandra Naidoo, “Accra Boasts Highest Inclusive Growth Potential”,, 11 June 2014. Available at:
  3. Kate Douglas, “Ranked: African cities with the top potential for inclusive growth”, ICF Africa, 17 June 2014. Available at: 
David Okwara

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