BY PETER EGWUATU
A new report from Ernst & Young (EY) has revealed that while the world needs to get used to a slower pace of growth across Rapid-Growth Markets (RGMs) relative to the past decade, a gradual recovery will see growth above 4.5% next year.
According to EY’s latest Rapid-Growth Markets Forecast (RGMF) released recently, a quarterly forecast for 25 markets that are becoming more important globally in terms of their overall weight in the world economy, their global influence and the business opportunities they offer to large corporations.
The report further revealed that s that by 2030, half of the world’s top 50 cities will be in rapid growth markets just as the report also suggests that over two-thirds of people in Nigeria, Ghana and Indonesia will live in cities by 2030.
RGMs have recovered somewhat from the financial turmoil in the second half of 2013 and early 2014, and a fast-growing population, strong investment rates and the rapid adoption of technologies, will continue to grow rapidly over the medium term.
Henry Egbiki, Regional Managing Partner for West Africa, Ernst & Young (EY), comments: “While near-term growth in several emerging economies hinges on the political will to implement second generation of reforms; in the medium term, fast-growing populations and increasing productivity are expected to lift growth, with cities especially in Africa and Asia, expected to be the epicenter of this growth.”
On urbanisation and new technologies increase growth potential, the report stated that the growing number of lower-middle income households with some disposable income is set to exceed 30 million by 2030 in Africa and South Asia – with incomes above US$5,000 but below US$10,000 in Africa and India. This growth will help to create markets of scale for mobile phone airtime cards and other consumer goods and services.
Commenting on exponential growth of cities, Egbiki says Africa is urbanising at an unprecedented rate. Data from Oxford Economics reveals that the urban population in Africa is projected to grow at least twice as fast as that of any other continent up until 2030.
Looking ahead, Egbiki strongly believes that investments are crucial to sustaining the demographical and industrial trends across rapid-growth markets.
According to him “In our view, RGMs that demonstrate the political will to move ahead with second-generation reforms to attract investments in infrastructure, offer stability and predictability in their rules for doing business and take tough measures to achieve macro-economic balances can see a growth dividend in the future.”