Sub-Saharan Africa: The Next Consumer Hotspot?
Sub-Saharan Africa is a region on the move. It is experiencing the second-fastest economic growth in the world – behind Asia-Pacific – and is home to 821 million consumers. In our forth-coming webinar, Africa Rising: A New Era of Consumer Market Opportunity we explore the potential of this US$1.3 trillion economy.
Although growth is from a low base, and in per capita terms spending power is limited (average per capita consumer spending was US$884 in 2012), solid forecast growth in the coming years is giving the region an edge. Real GDP growth will average 4.5% per annum between 2013 and 2020, leaving the region’s economy almost 50% larger in 2020 than it is today. Our recent datagraphic details 8 reasons to invest in Sub-Saharan Africa.
Challenges to Overcome
There are many challenges to overcome in the region – although the middle class is expanding, poverty remains widespread, infrastructure is weak, retail markets undeveloped and brand awareness lacking. Corruption can be a problem as can political stability in some countries. However, well-known brands are overcoming these challenges through careful research of suppliers, local partners, end consumers and the business environment.Companies must adapt to the local market in order to thrive.
Multi-National Interest on the Rise
Big name consumer goods companies and retailers are increasingly interested in the region. Carrefour has recently announced its plan to invest in eight countries in West and Central Africa – Democratic Republic of Congo, Cameroon, Congo, Côte d’Ivoire, Ghana, Gabon, Senegal and
Nigeria through a joint venture with CFAO (a subsidiary of the Toyota Group) and Coca-Cola, Cussons, Nestlé and Unilever are all well established in the region.
Intra-Regional Investment Also Increasing
Businesses hailing from developed economies do not have the market to themselves. African companies are also spreading their wings beyond their home markets. Most examples of this are South African companies “creeping north” such as retailers Shoprite and Mr Price both of which can be found in shopping malls across the region. Successful companies from other countries, such as Kenya’s M-Pesa and Zambia’s Zambeef are also investing in neighbouring markets.