Over the past 10 years geopolitical and economic challenges have impacted many Middle Eastern and North African economies (MENA): the global financial crisis, Dubai’s debt crisis, the Arab Spring and the recent collapse in oil prices are just a few.
Despite these obstacles to growth, the MENA region today constitutes a $3.3tn economy, making it larger than the ASEAN-5* (The five largest economies in South-East Asia Malaysia, Indonesia, Thailand, Singapore and the Philippines ) and one of the largest emerging market economic blocs. The International Monetary Fund (IMF) forecasts that it will be the third fastest-growing region in the world for the next five years.
According to the Financial Times, the positive macroeconomic trends are supported by favorable demographics. With nearly 162m people between the ages of five and 24, the MENA region has one of the youngest populations in the world. With more than 20 per cent between the ages of 15 and 24, it has the largest concentration of young people of working age out of any region, stimulating a vibrant and energetic start-up culture.
It is important to note that this young population resides in a region with strong purchasing power, which could represent a strong consumer base in the future. Eleven MENA economies, for instance, generated nearly US$1tn in household consumption expenditures in 2013.
- Over the past decade, African countries have experienced consistent economic growth at about 4-5%.
- According to the International Monetary Fund, Nigeria, Angola, Rwanda, Ethiopia, and Mozambique, all made it to the list of the world’s fastest growing economies.
- The IMF anticipates a growth rate of 4-5%, especially for Sub-Saharan Africa and Nigeria, against higher manufacturing activity and increasing foreign direct investment.
- The middle class has tripled over the last 30 years and is expected to increase another 42% by 2060
- According to McKinsey, Africa currently holds close to 15% of the world’s population, is home to the world’s youngest population, with more than half of its inhabitants currently under the age of 20. The younger generations are better educated and have more sophisticated tastes and preferences.
- The working age population in Africa has steadily been growing and is projected to exceed that in China by 2040.
- Over 30% of the population in the Middle East is between the ages of 15 and 29, whereas roughly 5% of the population is over the age of 65.
- The average life expectancy in the Middle East is now over 72 years, up from 65 in 1990, and is expected to only continue increasing in the coming years, which highlights a growing opportuning for healthcare providers.
- The Middle East will be one of the world’s fastest growing aviation markets during the next 20 years with an extra 237 million passengers flying to, from and within the region.
- A report from the International Air Transport Association (IATA) predicts the UAE aviation market will lead the region with average annual growth of 5.6 per cent – outpacing Qatar (4.8 per cent) and Saudi Arabia (4.6 per cent)