Don’t celebrate Africa’s economic growth just yet

The majority of humanity – some four billion people – live in high-density slums and that number will increase as people continue to flock to urban areas, seeking a ‘better life’.

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Nowhere is this more evident than in Africa, according to Dr Tashmia Ismail, head of the Inclusive Markets Programme at the University of Pretoria’s Gordon Institute of Business Science (GIBS).

A list of the world’s 10 fastest growing economies shows African dominance but this may not be cause for as much celebration as is currently touted, Ismail told Standard Bank’s Impumelelo Social Innovators Event. A world map looking at capital consumption shows the US, Europe and Japan as ‘obese’ in comparison to the ‘dental floss’ of Africa and lower income areas of South America and India, said Ismail.

Reports from Credit Suisse in 2014 put 44% of global wealth in the hands of 0,7% of the planet’s population (35 million people) and noted that close to 70% of the world’s population controls 2% of global wealth. “This is the paradigm that controls global economy and it is one of extraction,” said Ismail, “and it is a model that compounds global inequality.”

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The private sector needs to start thinking about the business models it uses, said Ismail. Simple, sustainable models mean a breakaway from the restrictive quarterly reports of economic analysts. If we start changing our definitions and rethinking roles and identities we can begin to shift paradigms, she said. “There are business models where relationships are being re-imagined with powerful impacts.”