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The Fastest Billion
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more corrupt than is normal at these income levels. Renaissance does expect an
across-the-board 24% improvement in the corruption score by the mid-2020s,
with a further 10% improvement the decade after. Those countries that outper-
form on this index will do best in attracting foreign equity interest, including
South Africa, Ghana and Rwanda. Those that underperform will still attract debt
investors. Locals and foreign investors will feel the benefits of lower corruption,
and governments can accelerate the process via Ease of Doing Business reforms,
which pioneers such as Rwanda have enacted in recent years.
Africa’s place in the world economy will shift
Today the continent is using the benefits of high commodity prices and ex-
ports to China, to begin the process of infrastructure investment that accelerates
growth. Renaissance sees huge room for this to expand. As the renowned econo-
mist Paul Collier has shown, in the year 2000, Africa had 20% of the discovered
sub-soil resources per square mile that OECD countries have. The missing 80%
is now being discovered. New iron ore projects in western and central Africa
could add nearly 600mnt of output by 2022. Mozambique is on course to be
one of the largest coking coal exporters by 2020. Commodity export growth,
in minerals and agriculture, will be key themes in coming decades. They should
help jump-start growth like the 33% GDP rise in 2012 that Sierra Leone assumes
on the back of new mining production.
Each year, in the oil sector alone, a major new discovery is heralded, from
Ghana to Uganda and most recently Kenya, pushing Africa’s share of world oil
reserves to 10%. African oil production growth has already been the fastest in
the world over the past 10 years, all of it in SSA. From 316,000 b/d in 1965,
bringing in $1 billion of revenue (in 2011 dollars), SSA now produces 5.8 Mb/d,
equivalent to all of China’s import needs, and delivering $235 billion of oil rev-
enue annually or 20% of 2011 GDP.
3
Renaissance expects volume increases to
ensure this tops $300 billion even with no change in oil prices by 2019. Nearly a
trillion dollars of oil revenue every three years means unprecedented inflows of
foreign exchange to fund imports of investment and consumption goods.
Rapid economic growth means growing African demand for resources. Do
not be surprised if Nigerian steel consumption rises from 1.6mnt annually today
to 115mnt annually by 2050. African motor vehicle sales of 8 million by 2020
may reach 14 million by 2030, higher than the US today. The next Geely or Tata
may well be found in Nigeria, Kenya or Ethiopia. Road and rail transportation
3
U.S. Energy Information Agency, International Energy Statistics database, accessed 7
September, 2012