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  • Africa is booming.

  • Per capita incomes since the year 2000

  • have doubled,

  • and this boom is impacting on everyone.

  • Life expectancy has increased by one year

  • every three years for the last decade.

  • That means if an African child is born today,

  • rather than three days ago,

  • they will get an extra day of life

  • at the end of their lifespan.

  • It's that quick.

  • And HIV infection rates are down 27 percent:

  • 600,000 less people a year are getting HIV

  • in sub-Saharan Africa.

  • The battle against malaria is being won,

  • with deaths from malaria down 27 percent,

  • according to the latest World Bank data.

  • And malaria nets actually are playing a role in that.

  • This shouldn't surprise us,

  • because actually, everybody grows.

  • If you go back to Imperial Rome

  • in the Year 1 A.D.,

  • there was admittedly about 1,800 years

  • where there wasn't an awful lot of growth.

  • But then the people that the Romans

  • would have called Scottish barbarians, my ancestors,

  • were actually part of the Industrial Revolution,

  • and in the 19th century, growth began to accelerate,

  • and you saw that get quicker and quicker,

  • and it's been impacting everyone.

  • It doesn't matter if this is the jungles of Singapore

  • or the tundra of northern Finland.

  • Everybody gets involved. It's just a matter of when

  • the inevitable happens.

  • Among the reasons I think it's happening right now

  • is the quality of the leadership across Africa.

  • I think most of us would agree that in the 1990s,

  • the greatest politician in the world was African,

  • but I'm meeting brilliant people

  • across the continent the entire time,

  • and they're doing the reforms

  • which have transformed the economic situation

  • for their countries.

  • And the West is engaging with that.

  • The West has given debt forgiveness programs

  • which have halved sub-Saharan debt

  • from about 70 percent of GDP down to about 40.

  • At the same time, our debt level's gone up to 120

  • and we're all feeling slightly miserable

  • as a result.

  • Politics gets weaker when debt is high.

  • When public sector debt is low,

  • governments don't have to choose

  • between investing in education and health

  • and paying interest on that debt you owe.

  • And it's not just the public sector which is looking so good.

  • The private sector as well.

  • Again, in the West, we have private sector debt

  • of 200 percent of GDP in Spain,

  • the U.K., and the U.S.

  • That's an awful lot of debt.

  • Africa, many African countries,

  • are sitting at 10 to 30 percent of GDP.

  • If there's any continent that can do what China has done --

  • China's at about 130 percent of GDP on that chart --

  • if anyone can do what China has done

  • in the last 30 years,

  • it'll be Africa in the next 30.

  • So they've got great government finances, great private sector debt.

  • Does anyone recognize this? In fact, they do.

  • Foreign direct investment

  • has poured into Africa in the last 15 years.

  • Back in the '70s,

  • no one touched the continent with a barge pole.

  • And this investment is actually Western-led.

  • We hear a lot about China,

  • and they do lend a lot of money,

  • but 60 percent of the FDI in the last couple of years

  • has come from Europe, America, Australia, Canada.

  • Ten percent's come from India.

  • And they're investing in energy.

  • Africa produces 10 million barrels a day of oil now.

  • It's the same as Saudi Arabia or Russia.

  • And they're investing in telecoms,

  • shopping malls.

  • And this very encouraging story, I think,

  • is partly demographic-led.

  • And it's not just about African demographics.

  • I'm showing you the number of 15- to 24-year-olds

  • in various parts of the world,

  • and the blue line is the one I want you to focus on for a second.

  • Ten years ago, say you're Foxconn

  • setting up an iPhone factory, by chance.

  • You might choose China,

  • which is the bulk of that East Asian blue line,

  • where there's 200 million young people,

  • and every year until 2010 that's getting bigger.

  • Which means you're going to have new guys

  • knocking on the door saying, "Give us a job,"

  • and, "I don't need a big pay rise, just please give me a job."

  • Now, that's completely changed now.

  • This decade, we're going to see a 20- to 30-percent

  • fall in the number of 15- to 24-year-olds in China.

  • So where do you set up your new factory?

  • You look at South Asia, and people are.

  • They're looking at Pakistan and Bangladesh,

  • and they're also looking at Africa.

  • And they're looking at Africa

  • because that yellow line is showing you

  • that the number of young Africans

  • is going to continue to get bigger

  • decade after decade after decade out to 2050.

  • Now, there's a problem with lots of young people

  • coming into any market,

  • particularly when they're young men.

  • A bit dangerous, sometimes.

  • I think one of the crucial factors

  • is how educated is that demographic?

  • If you look at the red line here,

  • what you're going to see is that in 1975,

  • just nine percent of kids

  • were in secondary school education

  • in sub-Saharan Africa.

  • Would you set up a factory

  • in sub-Sahara in the mid-1970s?

  • Nobody else did.

  • They chose instead Turkey and Mexico

  • to set up the textiles factories,

  • because their education levels

  • were 25 to 30 percent.

  • Today, sub-Sahara is at the levels

  • that Turkey and Mexico were at in 1975.

  • They will get the textiles jobs

  • that will take people out of rural poverty

  • and put them on the road to industrialization and wealth.

  • So what's Africa looking like today?

  • This is how I look at Africa.

  • It's a bit odd, because I'm an economist.

  • Each little box is about a billion dollars,

  • and you see that I pay an awful lot of attention

  • to Nigeria sitting there in the middle.

  • South Africa is playing a role.

  • But when I'm thinking about the future,

  • I'm actually most interested

  • in Central, Western and Southern Africa.

  • If I look at Africa by population,

  • East Africa stands out

  • as so much potential.

  • And I'm showing you something else with these maps.

  • I'm showing you democracy versus autocracy.

  • Fragile democracies is the beige color.

  • Strong democracies are the orange color.

  • And what you'll see here is that most Africans

  • are now living in democracies.

  • Why does that matter?

  • Because what people want

  • is what politicians try,

  • they don't always succeed, but they try and deliver.

  • And what you've got is a reinforcing positive circle going on.

  • In Ghana in the elections, in December 2012,

  • the battle between the two candidates

  • was over education.

  • One guy offered free secondary school education

  • to all, not just 30 percent.

  • The other guy had to say,

  • I'm going to build 50 new schools.

  • He won by a margin.

  • So democracy is encouraging governments

  • to invest in education.

  • Education is helping growth and investment,

  • and that's giving budget revenues,

  • which is giving governments more money,

  • which is helping growth through education.

  • It's a positive, virtuous circle.

  • But I get asked this question,

  • and this particular question makes me quite sad:

  • It's, "But what about corruption?

  • How can you invest in Africa when there's corruption?"

  • And what makes me sad about it

  • is that this graph here is showing you

  • that the biggest correlation with corruption is wealth.

  • When you're poor, corruption is not your biggest priority.

  • And the countries on the right hand side,

  • you'll see the per capita GDP,

  • basically every country

  • with a per capita GDP of, say, less than 5,000 dollars,

  • has got a corruption score

  • of roughly, what's that, about three?

  • Three out of 10. That's not good.

  • Every poor country is corrupt.

  • Every rich country is relatively uncorrupt.

  • How do you get from poverty and corruption

  • to wealth and less corruption?

  • You see the middle class grow.

  • And the way to do that is to invest,

  • not to say I'm not investing in that continent

  • because there's too much corruption.

  • Now, I don't want to be an apologist for corruption.

  • I've been arrested because I refused to pay a bribe --

  • not in Africa, actually.

  • But what I'm saying here is that

  • we can make a difference

  • and we can do that by investing.

  • Now I'm going to let you in on a little not-so-secret.

  • Economists aren't great at forecasting.

  • Because the question really is, what happens next?

  • And if you go back to the year 2000,

  • what you'll find is The Economist

  • had a very famous cover, "The Hopeless Continent,"

  • and what they'd done is they'd looked at growth

  • in Africa over the previous 10 years -- two percent --

  • and they said,

  • what's going to happen in the next 10 years?

  • They assumed two percent,

  • and that made it a pretty hopeless story,

  • because population growth was two and a half.

  • People got poorer in Africa in the 1990s.

  • Now 2012, The Economist has a new cover,

  • and what does that new cover show?

  • That new cover shows, well, Africa rising,

  • because the growth over the last 10 years

  • has been about five and a half percent.

  • I would like to see if you can all now become economists,

  • because if growth for the last 10 years

  • has been five and a half percent,

  • what do you think the IMF is forecasting

  • for the next five years of growth in Africa?

  • Very good. I think you're secretly saying

  • to your head, probably five and a half percent.

  • You're all economists, and I think,

  • like most economists, wrong.

  • No offense.

  • What I like to do is try and find the countries

  • that are doing exactly what Africa has already done,

  • and it means that jump from 1,800 years of nothing

  • to whoof, suddenly shooting through the roof.

  • India is one of those examples.

  • This is Indian growth from 1960 to 2010.

  • Ignore the scale on the bottom for a second.

  • Actually, for the first 20 years,

  • the '60s and '70s, India didn't really grow.

  • It grew at two percent

  • when population growth was about two and a half.

  • If that's familiar, that's exactly what happened

  • in sub-Sahara in the '80s and the '90s.

  • And then something happened in 1980.

  • Boom! India began to explode.

  • It wasn't a "Hindu rate of growth,"

  • "democracies can't grow." Actually India could.

  • And if I lay sub-Saharan growth

  • on top of the Indian growth story,

  • it's remarkably similar.