This brief note takes a look at innovation and emerging economics in Africa. Rockefeller Foundation is situated in Nairobi, Kenya, and serves as the focal point for its work in the sub-Saharan region. Kenyan stock market is very vibrant, and in 2019 Africa would be a good bet for growth in stock markets. M-Pesa, an avatar (not to be confused with James Cameroon’s movie) for mobile money transfer and micro-finance, is a riveting success in Africa and chiefly responsible for financial inclusion in the country.
Africa is expected to grow at 4 percent (3.7 percent according to WTO estimates) this year, with consumption and investment as key pillars of growth. Innovation is fast becoming an enabler for economic development. Apart from political instability and extreme weather, the major macro problem for Africa is the rise in the dollar, which hurts its external financing option.
The ongoing US-China trade risk affects Africa in many ways, further denting growth to a bit less than 4%. A continent that is a precursor for high inflation has seen some respite recently. ADB estimated from a high of 12.6% in 2017, inflation to curtail to 8.1% in 2020. The continent has the fastest-growing working-age population, which will result in one of the largest if not the most considerable unemployment rates globally in the years to come.
Innovation, e.g., M-Pesa and sustained economic development, could bridge the gap, but Africa’s tune to the cyclical commodity wave remains a challenge ahead. Ethiopia, the Queen of Africa, plans to launch a domestic stock market by 2020 and privatize telecoms by the end of this year. Ethiopia’s GDP is more prominent than Kenya, a feat shared by only two countries, Nigeria and South Africa, in the continent but remains without an organized capital market.