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Africa: The Next Destination For Business

With 54 countries, Africa is a large continent with tremendous economic growth, investment, and rapidly rising living standards. Today Africa offers a host of opportunities for entrepreneurs and businesses across the world as it marches towards a better economic future.

All across the African markets, national and regional economies are steadily accelerating their growth and attracting foreign investors from all across the world. This drastic change is driven by a number of factors, including more democratic and accountable governments; economic policies which increasingly favour and facilitate international trade; a new generation of policy-makers and business leaders; innovative information and communication technologies; an emerging spirit of entrepreneurship; and a growing middle class of relative prosperity with a taste for modern consumer goods.

As a matter of fact, six of the world’s 10 fastest growing economies are in Africa, and the ease of doing business in Africa is improving to the extent that a good number of countries (including South Africa, Ghana, Mauritius and Tunisia) now outperform China, India, Brazil and Russia.

FDI inflows to Africa have also registered year-on-year growth since 2010 and now amount to US$ 50 billion.

Forecasts by industry experts are leading to optimistic outlooks among those early movers who have already identified the huge potential of the African continent with its one billion people spread across 54 countries. It is time for enterprising businesses to seize the opportunity and look at the African markets seriously.

Population And Demographics

  • More than 50% of Africa’s population is under 20 years old, making it the world’s youngest continent – in comparison only 28 % of the population of China is under 20 years old

  • Almost 40% of the global population growth will be in Africa by 2050

  • 500 million Africans are between the age of 18 and 24. By 2040, the forecast is 1.1 billion — more than in China or India

Markets And Consumers

  • Urban African consumers spend the largest share of their budgets (45%) on food and groceries –more than the average consumer in the BRIC countries

  • Consumer expenditure is set to rise from USD 600 billion in 2010 to nearly USD 1 trillion in 2020

  • More than half of all African households are projected to have discretionary income by 2020 – corresponding to almost 130.000 households

  • Consumer-facing industries (retail/wholesale, banking, telecommunication and tourism) in Africa are expected to grow by USD 400 billion by 2020, with apparel, consumer goods and food accounting for $185 billion

Economic Performance

Average annual return on capital of African companies was 65-70% or higher than that of comparable companies in China, India, Indonesia, and Vietnam GDP growth for the continent is forecast to grow at 5.4% in 2020 and 5.7% by 2025

  • 6 of 10 of the world’s fastest growing economies are currently in Africa

  • FDI inflows to Africa have increased by 13.6% and FDI outflows by 55.6% in the last two years.

Doing Business In Africa

Transparency International’s Corruption Perceptions Index ranks Botswana, Rwanda, Namibia, Ghana, South Africa, Liberia and Tunisia better than China and India in terms of the perceived corruption levels of public institutions

African Economies: Marching Ahead In 2020

Africa’s fundamentals appear strong, and the continent’s outlook remains positive. The belief remains unshakable among Africans that tomorrow will be better than today and that is the kind of infectious confidence in which investments thrive.

Many African governments are now embracing the right reforms and economic restructuring, building the right institutions, growing resilient economies and making the right policy choices, including diversifying their economies away from oil earnings, gas and mining to the massive job-creating promise held by agriculture and small and medium-size enterprise and business creation.

The global economy is to gain greatly from high-performing Africa that can be the next global growth pole and its next market. Global prosperity will expand if Africa grows and prospers. The message to any company or investor still not in Africa is that today is the day that business in Africa is made and it might already be too late tomorrow. Africa is the now, no longer the future.

The Africa train has already left the station. You are either on it or you risk becoming irrelevant. The time to get into Africa is now.

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