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What are Africa’s Growing Industry Sectors in 2021?

While the developing economies of Africa were once reliant on minerals and natural resources for their wealth, this trend has begun to change following a process of concerted diversification.

To this end, the continent is now becoming one of the most respected and fastest-growing economic regions in the world, with nations such as Nigeria, South Africa and Angola all recording exponential growth and diversification.

But what are the key industry sectors driving this evolution, and how have they impacted Africa’s economy from a financial perspective?

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An Overview of Africa’s Economy

The Sub-Saharan African economy is incredibly rich in potential, as it’s home to one billion people (half of whom will be under 25 by the year 2050).

The region is also now home to the world’s largest free trade area and a 1.2 billion-person marketplace, creating a rich diversity of opportunity for businesses across a broad range of industries.

Of course, the Coronavirus pandemic took a heavy toll on this fast-growing economy, with Sub-Saharan Africa reporting a contraction of 2.1% through 2020 overall. The pandemic also plunged the region into its first recession in more than 25 years, with activity contracting by approximately 5% on a per capita basis.

The good news is that real GDP is projected to grow by 3.4% in 2021 according to African Development Bank Group, so that the region can continue to realise its full economic potential in the near, medium and longer-term.

 

What are the Three Top Growing Sectors in Africa?

With economic growth projected for 2021 and beyond, there are several sectors that are poised to experience the benefits of this. Here are three of the fastest-growing entities.

 

  1. Agriculture and Agro-Processing

Interestingly, Covid-19 also saw strong agricultural growth in Africa, with this continuing a trend that has persisted for a considerable period of time.

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This reflects the fact that agriculture contributes massively to South Africa’s overall GDP, which is in turn underpinned by a fast-growing population and increased demand for food supplies.

The statistics show that the region was the only industrial sector to record positive growth during the last quarter of 2020 (when compared to the previous reporting period).

So, it would seem silly to suggest that agriculture and agro-processing won’t continue in the same vein, especially with food demand continuing to soar across the board.

 

  1. Banking and Fintech

It’s estimated that 23.5% of the people in the region of Africa are unbanked, with a staggering $1.04 billion in cash currently held outside of traditional banks.

While banks are looking to correct this imbalance, it’s the fintech space and innovations such as cryptocurrency that are doing the most to improve financial inclusion in the region. Improved accessibility to the financial markets has also helped in this respect, with various investment vehicles seeing significant spikes in demand through 2020 alone.

According to Forbes, Forex trading in particular has seen an unprecedented spike in numbers across Africa during the last 12 months, especially amongst younger traders. This tech-savvy demographic has driven a 477% increase in forex trading volumes in the region according to Forbes, thanks largely to the Covid-19 pandemic.

This trend has also been driven by the rise of reputable forex accounts that offer a $30 welcome bonus, which has increased market accessibility nationwide.

 

  1. The Mining Industry

For all of its economic diversification plans, Africa remains incredibly rich in natural resources and reserves.

In fact, it’s home to around 30% of the world’s natural reserves, with South Africa producing the largest share of this percentage.

The region is also the world’s largest producer of platinum and gold, and the fourth most prolific producer of diamonds worldwide.

This creates significant demand for such materials across the board, and this is likely to increase further as economic prosperity returns.

 

 

 

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