Pestel Analysis of Africa

Africa – PESTLE Analysis

1. Political:

As a whole, Africa is a developing continent which has had massive improvements to its political climate in the form of corruption reduction, increased transparency amongst its citizens through participation, and increasing freedom of press. Through the constant changes among the global political power, Africa has been presented with multiple opportunities to capitalize on this in order to further its Millennium Development Goals (MDG). In order to make sure that the African continent is suitably represented in organizations such as the United Nations forum, multiple countries are working in cohesion in order to present this chance to help shape Africa’s future

1. Economic:

Since WWII, the global economic crisis is at its most severe peak, unfortunately with Africa holding a large burden of the adverse effects of this crisis. The budgetary limitations and the ensuing credit crunch, along with rising inflation worldwide and the subsequent lull in demand in numerous economies have caused uncertainty about the short term views for the world economy. Though Africa is not as strongly exposed to the risks globally, if product costs remain unpredictable and different economies embrace internal looking and protectionist policies. Therefore, there is a call to develop and balance the financial markets in Africa.

1. Socio-Cultural:

Over the course of the past ten years, Africa has taken significant strides forward in its social and economic development, yet it still remains in a development crisis. Africa’s high human potential is being shunned by the high mortality rates, which are attributed to deaths among mother and child from HIV/AIDS, trade in drugs, and violent crimes, etc. The current African population is estimated to grow exponentially over the course of the next few years as well, with an estimate of 2 billion in 2050 with its current growth rates. The increase in energy, food and oil prices have also stagnated the progress that can be made towards achieving their MDG objectives.

1. Technological:

Over the same course of ten years, there has not been any notable growth in the African manufacturing sector, some countries even showing a negative. It still remains dominated by seemingly low level handling and manufacturing of consumer goods that is only distributed in the domestic market. Africa has not been able to keep pace with the constant global advancements made, and this technological gap is what impedes the development of the African region. Many firms in African mainly lack the experience or the knowledge to make strategies or technology from around the world function at their optimum.

1. Legal:

Rather than uniting under one banner, the nations in Africa still see each other as competitors rather than more markets to expand. In order to unify them, the African Union needs to make laws to encourage inter-African trade and promote market access for African products. They need to provide a platform that will support an integration of regional and continental markets.

1. Environmental:

In order to provide continent wide sustainability, Africa must learn to preserve its natural environment. The major threats to the African environment comes in the form of floods, droughts etc. which have all been attributed to climate change. Since livelihoods in Africa are more dependent on agriculture, the growing levels of Green House Gases form developing nations holds a large threat to the problems faced by Africa due to climate change. This could in turn lead to conflict as African nations compete to secure what resources they can. GHG levels in Africa itself is relatively low as there is a low level of industrialization.