S4E2 Grit & Growth | Africa’s Economic Horizon: A Conversation — Acha Leke, Chairman McKinsey Africa

S4E2 Grit & Growth | Africa’s Economic Horizon: A Conversation — Acha Leke, Chairman McKinsey Africa

Africa's Economic Growth

  • Africa's growth has slowed down from 5.1% in the 2000s to 3.4% in the last 10 years.
  • Some countries, such as Ethiopia and Rwanda, have consistently grown above the average, while others, such as Nigeria and South Africa, have slowed dramatically.
  • Non-resource economies that have attracted foreign direct investment and implemented investor-friendly policies tend to be long-term growers.

Digital Transformation in Africa

  • Digital technology is seen as crucial for transforming productivity in Africa, but its impact on agricultural productivity and other productive sectors is still unclear.
  • Digital transformation has led to significant improvements in governance, financial services, agriculture, and energy.
  • Expanding digital services across the continent faces challenges due to regulatory requirements and cross-border complexities.
  • Harmonization of regulations is crucial for achieving scale and facilitating cross-border trade.

Fintech and Venture Capital in Africa

  • The fintech sector in Africa has experienced rapid growth, but not all companies will succeed.
  • Consolidation and mergers are likely as the environment becomes more competitive.
  • Venture capital funding for African startups decreased in 2023 due to global cooling trends and limited VC money raised from Africans.
  • Patient capital models and permanent capital vehicles are needed to support long-term growth and profitability of African businesses.

The Role of Large Companies in Africa

  • Large companies drive innovation and contribute significantly to tax revenues.
  • They help grow the supply chain of small and medium-sized enterprises (SMMEs) that feed into them.
  • The focus on large companies is important because they contribute a substantial portion of tax revenue and drive economic growth.

Agriculture and Population Growth in Africa

  • The agriculture sector is shifting away from agriculture and into services, but agricultural productivity has increased due to the substitution of capital for labor.
  • Africa's population is growing rapidly, and by 2050, one out of every four people in the world could be African.
  • Africa will have the largest working-age population in the world by 2050, and the continent will need to skill and train its workforce to provide digital services.

The Future of Work in Africa

  • Rapidly improving and often free AI tools will lead to job losses, but new jobs will eventually be created.
  • Countries that are proactive in thinking about how technological changes will affect them and in preparing their workforce for the future will be the most successful.


  • Africa has the opportunity to reignite its growth through a digital revolution and increased productivity.
  • The growth of Africa's large economies is crucial for overall economic growth on the continent.
  • South Africa, the largest economy in Africa, needs to reverse its slow growth.

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