Lion Economies (Africa) – What is, definition and concept | 2022

The lion economies are a group of African countries with high potential for economic growth.

The countries that make up this group are: Ethiopia, Ghana, Kenya, Mozambique, Nigeria and South Africa. This name is analogous to that of Asian tigers. In this case, the analogy is due to the lion population in Africa. In addition, because the organization of the lions is in a pack, where individuals cooperate for the collective good. Unlike the lonely tigers.

The exploitation of raw materials and agriculture are sectors of vital importance to sustain the expectations of economic growth. However, more complex sectors such as commerce, manufacturing and telecommunications, for example, are taking more and more ground.

Basis of economic growth

Economic growth in African countries is not only due to the boom in natural resources. There are policies that have been adopted that have allowed the countries of the continent to be seen with positive expectations. Some of these reasons include:

  • Reduction of political conflict, improve macroeconomic imbalances and create a friendlier environment for the private sector.
  • Greater access to the international financial market and better relations with foreign capital.
  • Growing workforce thanks to social and demographic trends. Likewise, urbanization and displacement from the countryside to the cities.
  • Rise of a new middle class that has greater purchasing power to consume and boost production.
  • The industries leading the paradigm shift are: Retail, Telecommunications, Banking, Infrastructure, and Agriculture.

Outlook for the lion economies

There are elements that indicate that the future of these economies is promising. Some of these reasons are as follows:

  • As long as the global energy matrix requires oil and natural gas, Africa will have growth potential. These revenues should be used to promote economic dynamism to take full advantage of commodity cycles.
  • Also, the continent has an abundance of other natural resources such as minerals and arable land. For example, Africa has 40% of the world’s gold reserves and 90% of the chrome reserves.
  • Changes in the environment to facilitate private investment will be of great help in the future. Investments are made in infrastructure, technology and technical knowledge are shared.
  • As cities are populated with specialized jobs, the middle class consumer will take on a greater role. In 30 years (1980-2010), the number of Africans living in cities went from 28% to 40%.
  • Population growth will expand the labor force. By 2040, the continent’s economically active population is expected to exceed that of China and India.
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Problems to be solved for the lion economies

The countries in this group have problems to solve. Despite advances in resolving political, economic and social crises, they remain highly exposed to oil market cycles. In times of cycle of raw materials, they present improvements in their macroeconomic indicators. However, at the end of the cycle, growth slows down considerably.

However, they are problems to be solved and it is still expected that these economies will form an important part of global growth.

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