Quick note today.
Charles Robertson, Renaissance Capital’s Global Chief Economist, has been digging around on data for electricity, education, investment levels in the Emerging and Frontier markets.
The idea is simple – those countries that invest in the right infrastructure are more likely to kick start rapid GDP growth, but that means thinking through how they industrialise.
Robertson has now added 2019 data to an existing long line of data.
In the Frontier markets category, “Vietnam, Bangladesh and Morocco are big success stories. High investment should support high growth in each…..Big improvements in Nigeria and Ghana. Both now at 25%+ of GDP. Gently better in Egypt. Flat and bad in Pakistan. Worse in Tunisia”. He’s also “positively surprised by high investment figures in Nigeria and Ghana, and disappointed by weak investment figures in Kenya, Pakistan and Tunisia”. One key measure is investment to GDP ratios – “We need investment of 25% of GDP or more to see convergence towards rich countries”
|Figure 1: Electricity (300+ is good), education (70%+ is good), investment (25%+ of GDP is good) and manufacturing – ranked by electricity consumption from top left to bottom right|
|Source: UN, World Bank, IMF|