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Investing in African Markets

  Feb 14, 2020
 

There are vast investment opportunities in Sub-Saharan Africa, which have been brought by an improved investment climate and a growing appetite for investments in Sub-Saharan Africa. Demographics, innovation, and international investments are the three notable themes seen in the African emerging market economies which could become long-term growth drivers in Africa.

Why invest in Africa?

According to the Global Economic Prospectus Report, 2020,” Emerging markets and developing economies will see growth accelerate to 4.1% from 3.5% last year.”

Accelerated private sector development and regional integration play a major role in promoting business expansion in Africa. There are tremendous lucrative opportunities throughout the African continent for investment, production, manufacturing, logistics, and delivery.

It is estimated that in the next few years, 43% of Africa’s population will belong to the middle or upper classes, this increase will be caused primarily by the rising income levels among all socio-economic groups and an increase in demand for goods and services.

“When venturing into a new African market, it is important to understand how business is carried out in each of these markets. Different business models work differently in different countries.” James Wambugu, former CEO of UAP-Old Mutual Group. James Wambugu highlighted the wins and the challenges the UAP Group faced when it was expanding operations to Rwanda, Uganda, Tanzania, and South Sudan. “A company must give the ‘new’ market a localized feel, this will ensure that the people in that country own the brand, ” He said

Speaking during the Global CEO Africa Programme session, Nzioka Waita, Chief of Staff, Government of Kenya said, “As African governments, we have made it impossible to trade with each other, we do not sell any of our products to fellow Africans, instead we sell to the Western countries yet Africa has a ripe market. He also highlighted some of the logistical challenges that entrepreneurs and businesses face when trading within Africa giving this as one of the reasons why imports from countries such as China have increased drastically.

“Kenya was the first country to ratify and sign the Africa Continental Free Trade Area Agreement AfCFTA, this is how committed we are as a government to open up our borders and trade with the rest of Africa, ” Nzioka Waita. “The Kenyan government was very clear on the path it was taking in regards to trading with Africa and the AfCFTA.”



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