The McKinsey Global Institute has successfully managed to grasp the initiative to do what no other organisation is doing in this day and age, putting Africa on the map. In this report, the institute strives to reverse the stereotypes Africa has garnered over the years: a continent reeking of poverty and the epitome of destitution. It seeks to enlighten and expose the legitimacy Africa possesses - burgeoning cities, innovation in everything from fintech to clean energy, opportunities for robust and inclusive growth that harness its natural resources and abundant human potential to increase prosperity not only in Africa, but across the world. This analysis report shall conceptualise the McKinsey theoretical synopsis and aim to bring it home.
Production; is the highest means of wealth in Africa. With incessant natural resources that lie all across the continent waiting to be placed to beneficial use for everyone. In Zimbabwe, gold is produced at a whopping 35.38 tonnes annually which equates to $2 292 835 294.4 every single year, which makes half of the country’s annual budget from gold only. Agriculture, which is the primary source of income in the whole continent, obviously produces more(with 60-70% of the population being employed in this sector). Therefore, agriculture and mining are great investments in Zimbabwe and one needs a legal team to understand company, mining and land laws in Zimbabwe.
Such vast productions in the natural resources sector provide a ripple effect on the service industry which has grown over the past 20 years. Within Africa, the service sector has contributed 56% of economic output in the last 4 years. Service might not be the primary source of income, but it sure is the back bone of all productions in Zimbabwe. For instance, the economy relies on the law fraternity to perfect legal processes such as partnerships, transactions, mergers, taxes and the list goes on. Such vital initiatives are attainable, they simply require skilled service providers.
There is massive opportunity for growth in Africa as only 10% of its imports and 17% of its exports are intraregional i.e within the continent. Africans have adopted the initiative to trade within their continent and this has mirrored on to the international market as shown by the glaring yearn of companies to dip their toes in this enriched continent. There have been measures put in place to erase border constraints that inhibit intracontinental trade and to enhance the economy – African Continental Free Trade Agreement.
There is room to increase productivity of all sectors within Africa: the service sector, agriculture, mineral resources inter alia. The tools are present, rich natural resources, thriving cities and emerging innovations. It is imperative to note that while investing in Africa is not without its challenges, the continent's potential and opportunities cannot be ignored. With the right approach, due diligence, and commitment, investors can participate in Africa's economic growth and contribute to its transformation, while reaping the benefits of a high return on investment.
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By Rutendo Sarah Gukwa
Intern at Gambe Law Group