But in the last decade, things suddenly began to change. Improved governance, better market-friendly policies, the decline of civil wars, as well as the establishment of democracy began to yield accelerating economic stability and growth.
In telecommunications, Africa has more people connected to a mobile network than the whole of Europe; economic growth, though not quite the 7% needed to achieve the Millennium Development Goals (MDGs) set by the World Health Organization in 2000, was relatively close at 5–6% in the last decade, according to a report by the Commission for Africa in 2010.
The February 2013 edition of the African Business newsmagazine stated that if current growth continues, by 2050 roughly 300 million Nigerians will enjoy an average income of $10,000 with a GDP of $3 trillion, similar to Germany today.
Africa's economic output has almost tripled in the last ten years; more wealth has been created in Africa in the last decade than any other time in its history, writes Evelyn Mhango, an economist in the "Fastest Billion."
The reasons for this explosive growth are manifold:
» Improved government policies have increased the scope for the private sector to grow, and have created the low-debt, low-inflation, much improved macro-conditions that have enabled this growth.
» According to Ernst & Young's (EY) African Attractiveness Survey, the strengthening of regulatory and legal systems, privatization of public enterprises and the opening up of economies to international trade have led to the quintupling of exports, record inflows of FDI and a doubling of per capita GDP.
» Increased democracy and the sharp decline of civil wars.
» David Mataen's book, Africa, the Ultimate Frontier Market, lists eight megatrends that have driven Africa's current and future economic realities: population growth and demographic shifts; cultural revolutions; rapid urbanization; commercialization of essential services such as healthcare; deregulation and liberalization; growth of credit; capital market development; and consolidation and evolution of intra-African markets.
» The recent debt relief through the IMF/World Bank Highly Indebted Poor Countries Initiative (HIPC) have enabled African countries to divert much-needed funds earmarked for debt repayments into health, education and infrastructure.
According to TIME magazine (December 3, 2012), business increasingly dominates foreign investment in Africa. Investment first outpaced aid in 2006, and now doubles it. This growth was, contrary to popular belief, spread across various sectors.