As the global economy falters on the back of geopolitical tensions and rising trade barriers, Africa’s resilience shows just how far the continent has progressed in recent years.

The region’s growth has historically been driven by commodity prices, making it vulnerable to slowdowns in other markets. Now, however, Africa’s fastest-growing countries are not simply rich in commodities — they have diversified economies and sound policies.

According to International Monetary Fund projections, GDP growth in Sub-Saharan Africa is expected to accelerate to 3.6% in 2020 and 4.2% by 2024. Over the medium term, growth is projected to average above 5% for about two-fifths of those economies.

Africa’s challenges are well known, but it is clear its economy is gaining traction. And the African Continental Free Trade Area agreement, which is set to boost intra-African trade after its implementation next year, will further drive growth and shield the region from downturns in other markets.

As Africa’s economy has gained traction, so has recognition of the continent’s potential. In the first six months of the year, Standard Bank provided expansionary funding for multinationals and large domestic corporates across the region worth R92bn. Growth-boosting investments have continued into the second half, including in East Africa’s consumer goods sector.

There is investor interest in physical infrastructure, in critical sectors such as health care and education, and in digital infrastructure, including data centres. These will deepen financial inclusion and enable e-commerce, leading to higher incomes and increased consumer spending.

For foreign and domestic investors, the African growth story is as compelling as ever

For many foreign and domestic investors, the African growth story is as compelling as ever.

There is a deep well of opportunities in the infrastructure segment, oil and gas, agriculture and agri-processing, energy, minerals, tourism and digital technology, among others.

Given Africa’s natural solar resources, for example, opportunities in the renewable energy segment are extensive.

At the same time, Africa’s agricultural industry is still punching below its weight, considering that the continent holds 60% of the world’s uncultivated land. Financing the agricultural value chain will be a key driver of growth.

Africa will be home to slightly over a quarter of the world’s population by 2050, according to UN forecasts. Moreover, more than four in 10 people on the continent will be below the age of 20. It is therefore imperative that staff development, education, skills, job creation and enterprise development are accelerated for the growing youth segment.

Doing business

Encouragingly, the barriers to doing business on the continent are gradually being lowered.

For instance, the availability of bank-intermediated trade finance has long been an impediment to the growth of small and medium-sized enterprises as well as larger organisations.

The African Development Bank estimates that there is a shortfall of at least $100bn.

But African governments are starting to encourage digitisation to boost trade, and digital solutions are starting to improve access to trade finance. (For now, though, it remains heavily paper-based — and disrupted by national borders.)

There is also potential for further digitisation of the physical supply, financial supply and documents chains, and Standard Bank is working with regulators in that regard.

Unleashing Africa’s entrepreneurial capabilities is crucial for uplifting the continent’s people. So is doing business responsibly.

As investors increasingly shift their attention towards Africa, Standard Bank has committed to doing the right business, in the right way, to build a sustainable future.

• David-Borha is CE for Africa regions at the Standard Bank Group

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