A Marshall Plan for Africa

Colin Coleman

Africa could be the largest source of global economic growth over the next half-century. But during the same period, the continent could also trigger the next great European war.

Goldman Sachs projects that Africa’s GDP will grow from roughly US$3 trillion today to US$44 trillion in 2075, with its share of global GDP rising from 3% to 11%.

This would make the continent one of the world’s main growth engines, surpassed only by India, which is predicted to add US$46 trillion in GDP over the same period.

To put this in perspective, between 2030 and 2075, Goldman Sachs’ model predicts that Chinese GDP will rise by US$8,5 trillion less and the United States’ GDP by US$16,5 trillion less, than Africa’s.

In fact, by 2075, Nigeria is forecast to become the world’s fifth largest economy, with a GDP of US$13 trillion and Egypt the seventh largest, with a GDP of more than US$10 trillion.

At the same time, Africa’s population is set to rise from 1,4 billion to 3,3 billion in 2075, accounting for 32% of the world population, up from 18% today, according to the United Nations’ 2022 World Population Prospects report.


Two conclusions can be drawn from all this.

First, by 2075, nearly one-third of the world’s population will have to share 11% of global GDP.

While this represents an improvement on the current situation, it implies that African countries will still struggle to feed, clothe and provide income to all their inhabitants, likely triggering an explosion of migration to Europe.

Second, a small section of African society will benefit disproportionately from this period of wealth creation, while large segments of the population will most likely remain in poverty, implying a rise in inequality and an increasing risk of social unrest.

To be sure, Africa’s demographic dividend represents an immense opportunity for investors, especially in technology, consumer, clean-energy, agriculture, infrastructure and fintech industries.

But the risk of a humanitarian disaster grows with each passing day, as more people contend with poverty, joblessness and violent conflict.
The continent is, in fact, a ticking time bomb.

Global post-pandemic economic conditions, including the rising cost of capital, surging inflation and interest rate hikes, have hit African countries hard, closing capital markets to most African issuers.

The defaults of Zambia, Ghana and, most recently, Ethiopia are warning signs of a sovereign-debt crisis, offset only by Côte d’Ivoire’s successful bond issue in January and Kenya’s recent, albeit expensive, bond issue.

Equally worrying are spiking yields and the wall of debt coming due in countries like Kenya and Angola.

As a result, these countries have been forced to cut public spending to the bone and raise taxes, worsening social and business conditions.


Moreover, exchange rate fluctuations, which contributed to the dramatic collapse of Nigeria’s naira, have tightened financial conditions, reduced the supply of dollars and made it difficult for corporates to service foreign currency debts and repatriate their dollar revenues.

As humanitarian and sovereign debt crises build and business conditions deteriorate, multiparty democracy on the continent has begun to break down, reflected in the recent string of military coups in West and Central Africa.

The current situation has already fueled a sharp rise in migration.

This will increase sharply if Africa’s population growth is not coupled with improving economic conditions.

Worryingly, the International Monetary Fund’s current forecasts suggest GDP growth of around 4% in Sub-Saharan Africa for the next two years – well below long-term trends.

The impact of African migration on European countries’ domestic politics can already be seen in the increasing popularity of right-wing, anti-immigration parties across the continent.

The political tremors that massive African migration would trigger throughout Europe in the coming decades could even lead to the rise of fascism.

To avert this nightmare scenario, policymakers must act now.


The only answer is to fix the structural problems that plague Africa.

That means supporting homegrown African initiatives, including the Africa Continental Free Trade Agreement, innovative infrastructure-financing tools, peace and security missions.

The international community should consider implementing a comprehensive Marshall Plan for Africa, led by the G20.

By mobilising large-scale financing, boosting trade, investing in capacity-building initiatives and providing military and security support,

the G20 could collaborate with the African Union and leading African countries to accelerate economic growth, promote human development and ensure social stability on the continent.

For such a plan to work, the United States, European countries and China must come together to design, negotiate and implement this initiative.

A joint effort is needed to deliver structural transformation, as the best intentions of individual countries will not be enough to tackle Africa’s economic, social and political problems.

A G20-led Marshall Plan for Africa could help produce sustainable solutions to the continent’s biggest challenges.

When combined with homegrown initiatives and the nearly US$1 trillion annual GDP growth Goldman Sachs forecasts, it could provide

the incentive required to mobilise the massive private sector investment the continent needs.

  • * Colin Coleman, a former partner at Goldman Sachs, is an adjunct professor at Columbia Business School.
    – Copyright: Project Syndicate, 2024

Stay informed with The Namibian – your source for credible journalism. Get in-depth reporting and opinions for only N$85 a month. Invest in journalism, invest in democracy –
Subscribe Now!

Latest News