Increased worldwide demand for African goods, better macroeconomic management and improved infrastructure suggest the continent will be growing rapidly in 2020.
There are many competing visions of Africa in 2020. But what will it actually resemble? The pockmarked fields of Borneo, strip-mined of their nutrients by Asian agribusiness giants? The bounteous, fertile and job-rich cerrado zone of Brazil? The well-organised suburbs of Singapore? The sprawling slums of Bangalore?
The economic roller coaster of recent years clouds the crystal ball. The double-dip recession in the West is finally weighing on Asian dynamism. Larry Summers, former US treasury secretary, warns of a "lost decade" ahead for the eurozone.
World Bank chief Africa economist Shanta Devarajan has been running the numbers and is relatively sanguine. "Suppose the world was to go into a 10- year Japanese-style low-growth recession, what does that mean for Africa? It turns out this only has a modest effect on the forecast."
Why? The world in 2020 will be more populous, more urban and will require more of everything: energy, water, food, minerals, clothes, white goods and smart-phone applications. Africa, with its proven resource base and its potential to move into both agribusiness and low-end manufacturing, is at the sweet spot of global demand.
China, India, Brazil and other emerging economies still have headroom for growth and their own domestic markets to address. Klaus Rohland, country director for China at the World Bank, says: "China will move from 50% to 70% urbanisation by 2030 – that's the population of Indonesia or the United States moving into the cities over the next 20 years." India is expected to add more than 200 million people to its cities by 2025.
And emerging markets are starting to spend. The Boston Consulting Group estimates the next billion middle-class consumers will add $10trn to global GDP by 2020. As tastes diversify with rising living standards, global meat consumption rises.
The grain required to feed this livestock will stretch African agricultural capacity, and push land grabs into the spotlight.
New oil finds in the Gulf of Guinea, and gas along the east coast, mean sheer export volumes will compensate for some of the drop in price. Charles Robertson, chief economist at Renaissance Capital, expects Africa's oil revenues to rise to $300bn by the end of the decade, which is more than three times what the continent needs to spend each year to close the infrastructure gap.
So there should be a floor under commodity prices, even if they may not be as high as 2007-2008.
Spreading the wealth
More importantly, there is a growing group of African leaders seeking to use and retain resource revenue more effectively.
The deputy chair of the budget committee in Uganda's parliament, Remigio Achia, believes that the old tricks used by corrupt politicians and businesses to spirit money out of the continent cannot continue. "Transfer pricing and mispricing – all these things are hard to understand and articulate to a wider population, but they are critical to the fight."
It is not just the external picture that looks healthy. Powering Africa through 2020 will be the huge reserve of domestic demand that has built up over the past decade. The African Development Bank has said that the African middle class already rose to 313 million people in 2010. Consultants at McKinsey & Company claim that by 2030 Africa's largest 18 cities will have a spending power of $1.3trn.
This belies the precarious conditions of these families. Our own survey of middle-class families showed them struggling to stay afloat. But there is a tangible increase in local spending, visible in the healthy bottom lines of retail, telecom and construction companies on the continent.
More than 50% of urban Africans say they have accessed the Internet in a single month, on par with reported usage in Brazil and China, according to McKinsey. Small wonder that BlackBerry makers Research in Motion set up a second application research lab in South Africa in November.
Consumer goods rush
Other multinationals are sharpening their teeth. The scramble for Africa's fast-moving consumer goods segment is now well documented, with companies like Nestlé, Kimberly-Clark and Yum! Brands all ramping up operations.
French cosmetics company L'Oréal is setting up factories in Kenya. India's Godrej Consumer Products has entered the market in Nigeria and South Africa, with Marico, Dabur India and Emami hot on its heels.
African companies are stepping up to the challenge of meeting African demand rather than allowing the prize to go to foreign multinationals. The turnover of Africa's top 500 companies grew from $393bn to just under $690bn between 2005 and 2010, according to our annual survey.
These African champions have a home advantage. Agribusiness is a priority. There are eight large juice manufacturers in Nigeria – all of whom import their raw materials.
In March 2012 Teragro, a subsidiary of Transcorp, inaugurated a juice concentrate factory in Benue State that can produce 4,000tn of orange, pineapple and mango concentrate a year.
"The market is there – even with expansion, we are only making enough to supply one of the major juice manufacturers," says Teragro chief executive Jide Adedeji.
Some companies are linking with giants such as Olam and Tata Chemicals to bring in knowhow and technology.
Christina Stolte, research fellow at the German Institute of Global and Area Studies, says: "Brazilian companies are targeting the EU ethanol market and are setting up joint ventures with African partners to tap Brazil's vast experience in green energy."
By 2020, the European Union requires all petrol to contain at least 10% ethanol – a market of more than 150bn litres a year according to the Organisation for Economic Co-operation and Development.
Nigeria's Oando also sees retail demand and is targeting cooking gas. Chief executive Wale Tinubu explains: "Currently the penetration rate of LPG [liquefied petroleum gas] in Nigeria is estimated at 0.4kg per capita [the lowest in Africa] and total consumption at 60,000tn per annum versus its potential capacity of 580,000tn per annum given the average consumption of 3.8kg per capita."
This is dwarfed by the continent's demand for electricity. Nigeria is inching toward the provision of reliable power, with the announcement, nearly a decade after the original proposals, of several new privatisation deals.
Ethiopia's new dams are set to light up East Africa once the 6,000MW Gibe III dam is complete.
Morocco is partnering with Spanish companies to create electricity from the Sahara with solar energy.
The gas finds off the coast of Mozambique and Tanzania will in part be funnelled to thirsty power pools in Southern and Eastern Africa, especially if the US shale-gas revolution continues to depress export prices.
With more electricity comes the push for more manufacturing jobs. "Wages in China have been going up 20-30% a year," says Rohland.
This has pushed Chinese low-end manufacturers, particularly in textiles, to look elsewhere.
Ethiopia has led the way, earning $112m from leather exports in the 2011- 2012 financial year and $84m from textiles and garment exports.
But those banking on the 'Made in Africa' label may be disappointed in the short term.
Even ignoring the continent's infrastructure deficits, China continues to occupy the lowest rung on the manufacturing ladder, so it will be some time before Africa can compete with the 'China price.'
Despite wage inflation, China cannot move economic models away from export-oriented growth overnight. Some analysts believe a new phenomenon will make this even harder: the return of a strong US dollar.
US companies are sitting on mountains of cash made by sub- sidiaries abroad – $5trn by 2009, according to the US Internal Revenue Service.
They are avoiding tax penalties they would incur if they brought it home, but there is also concern about global economic stability.
As long as both political parties step back from the 'fiscal cliff ,' there will be fresh activism from shareholders to bring this money home.
As the financial crisis eases and banks become more solvent, companies will not need to hoard cash to finance operations.
United States Rising
To avoid giving it all back in dividends, a large portion may well end up in research and development – unleashing a new wave of products across world markets.
New healthcare regulations should save the US economy money, and the shale-gas revolution will make the US much less dependent on foreign energy supplies.
The combined effect on the terms of trade will be immense, according to Jule Treneer, managing director of Madrona Partners, who believes that as long as Washington gets its act together, "tomorrow's dollar will be like yesterday's deutsche mark."
Just as global demand for commodities removes incentives for resource-rich African countries to diversify their economies, a strong US dollar may remove the current pressing need for China to move towards a consumption-driven economy.
That may create a headache for the new president of China – a man who has suffered enough abuse recently, according to some.
Xi Xinping went missing before the Chinese Communist Party conference in which the bruising once-a-decade leadership transition took place in November.
The latest rumours about his absence suggest he had been hit in the back with a chair whilst trying to break up a fight between supporters of Bo Xilai and more pro-capitalist party members.
When you strip out the criminal elements around Bo, he was championing a wing of the party that is against the inequality of recent decades.
Bo's city, Chongqing, was a laboratory for a model including greater social protection, better pensions and better wages.
The more neo-liberal group, whose province laboratory of Guangdong champions the export model, will feel less inclined to negotiate if US consumers are back in the saddle by 2020.
Regardless, the solid macro-economic management of a majority of Africa's economies should continue over the next decade, carefully husbanded by the African Development Bank and ever-wider pools of African administrative talent.
But politicians must address political and economic structural matters if they are to seize these opportunities.
First the good news.
Deepening capital markets – witness the 12-times oversubscribed Zambian sovereign debt offering in September – should provide a new cadre of local entrepreneurs with the funds they need to expand and create businesses.
Beyond the first steps in electrical power provision, continued investment in African ports, railways and roads have created an easier platform for expansion.
Tourism may prove a golden opportunity.
Europe's baby boomers may not feel rich at the moment, but they are the wealthiest generation the continent has ever seen.
From North African property mar- kets to East African hospital holi- days, the 'grey euro' has arrived.
Seizing the Upside
Private equity companies, often in the vanguard, have spotted this. Christian Skaanild, a partner in the Capital International Private Equity Fund, says: "As we are a large fund, our minimum investment is around $150m.
A key problem we have is finding sizeable enough opportunities."
As a result, he is targeting multi-country companies. "But, encouragingly, there are increasing amounts of these," he explains.
A 2012 Pricewaterhouse Coopers survey of global chief executives found that 75% of them said their companies would invest more in Africa.
If all goes well, emerging African companies will join global supply chains. As deputy director general of the World Trade Organisation (WTO) Valentine Rugwabiza explains, some countries are already there.
"Mauritian [textile] companies are integrated into the H&M supply chains. Nowadays trade is in parts, there is very little trade in finished goods." This should, she believes, cause Africa to rethink its tariff barrier policies.
Now the bad news. For South African 'futurist' Daniel Silke, the next decade could well see greater protectionism, especially if Africa's growing inequalities are not addressed.
"There may be a backlash against foreign powers, especially if the benefits don't trickle down. We've already seen one against the Chinese in Zambia."
There may also be tension between migrant African populations. "The xenophobic attacks in South Africa are a function of the low growth we have had," explains Silke.
As African economies develop, the 'win-win' rhetoric of its new friendships may wear thin. Beyond the death of a Chinese mining manager in Zambia in August, there are other tensions.
Indian business process outsourcing (BPO) companies are aggressively entering Kenya, which has BPO ambitions of its own. The South African poultry industry has accused Brazil of undercutting farmers by dumping frozen chickens on the South African market.
Brazil has taken the matter up with the WTO. Lucy Corkin, an analyst at Rand Merchant Bank, believes this is a storm in a teacup.
"It is more about South African farmers staking out their territory. They had the unpleasant realisation that Brazil chicken exports could really hurt them in Africa."
The World Bank's Devarajan warns more protectionism would be catastrophic.
"We ran an alternate scenario which is that maybe as a response to slow growth – with all the political ramifications in developed countries – there is a collapse in world trade as well as capital flows.
"Everyone turns inward essentially, and that has disastrous consequences for Africa – both on the savings side and on the investment side."
Other harder constraints on growth could emerge. Climate change is routinely swept under the carpet by investment bank reports, but the costs could be immense.
Water is another flashpoint.
Business consultant Patrick Dixon says: "Every kilogram of wheat requires a cubic metre of water to grow. A 40tn lorry of wheat is equivalent to 100,000tn of water."
With Nile River Basin countries such as Egypt, Sudan and Ethiopia all set for explosive demographic growth, it is easy to see conflict ahead.
An 'African Summer' may be round the corner. The problems of a Burkina Faso, stuck near the bottom of all world development rankings, will not be the same as those of an energy-rich Ghana.
North Africa has provided a flash forward to the rest of the continent, vividly illustrating what happens when kleptocrats and elite-linked businessmen plunder a country and create 'jobless growth'.
Ignored and disenfranchised regions such as the Sahel have a habit of breeding tension.
The demographic bulge of young people about to be introduced into the job market lacks the skills to compete.
They will quickly find political outlets if they are backed into lives of hopelessness.
The year 2020 will belong to countries that embrace them as part of the solution.