World is looking elsewhere in Africa as SA economy struggles
Within 12 years‚ South Africa and Nigeria will no longer be dominant on the continent.
Euromonitor International said on Friday: "Africa’s two largest economies‚ Nigeria and South Africa‚ account for nearly 50% of the continent’s GDP in 2017. However‚ by 2030 these two countries will represent just 37% of Africa’s total GDP‚ demonstrating the rising economic importance of Africa’s emerging markets."
Ethiopia and Rwanda are expected to be the two fastest growing economies in Africa by 2030‚ the report states.
What's more‚ it says‚ Africa will show the highest growth in disposable income globally over the forecast period to 2030‚ at 9% compound annual growth rate (CAGR).
Euromonitor International’s report‚ titled “Shifting Market Frontiers: Africa Rising”‚also identifies key trends‚ some of which are summarized here:
- Africa is the world’s second most populous continent. Its growing young population is expected to command nearly 20% of the world’s population by 2025. Equally‚ rapid urbanisation and fast-growing consumer expenditure provides long-term opportunities.
- Diversity of consumers in Africa’s 55 independent states "requires a more granular and regional approach for a successful and sustained market entry".
- A flexible long-term strategy is required to succeed in the continent. "Despite signs of growing GDP and consumer expenditure‚ the challenges of the continent‚ such as lack of infrastructure‚ paucity of skills and political instability‚ require a flexible and long-term approach."
- Africans are increasingly connected. With high mobile penetration - reaching one billion in 2017 - by 2030‚ Africa will also have 16% of the world’s internet users‚ which reflects growth of over 260% from 2017. "This offers opportunities in various consumer industries‚ which include finance‚ apparel‚ food and drink‚ and beauty and personal care."
This week‚ South African policymakers were urged by the SA Institute for Security Studies to focus on revitalising the manufacturing sector‚ in order to grow the economy. Business Day reports that growth in SA has remained paltry in recent years‚ hovering around 1%‚ and is not expected to breach the 2% mark in the medium-term.
President Cyril Ramaphosa told parliament this week that his government was trying to stimulate investment into SA‚ from local companies‚ from elsewhere in Africa and internationally. He said: "We are seeking investment that expands the industrial capacity of our economy‚ that creates jobs on an unprecedented scale and that lifts millions of our people out of poverty."