Africa is open for business

14 August 2014

Africa is open for business. Inflows of foreign direct investment have reached record highs and GDP growth across the continent averages 5.1%, according to the IMF. These are positive signs, but what do business and government leaders on the ground have to say?

Our annual survey of CEOs in Africa shows that the majority of them are optimistic about their companies’ prospects for revenue growth over the next 12 months. Almost all of them expect their operations in Africa to grow this year. They are focused on what their customers want now, and—more importantly—what they will want, in the near future.

Africa’s marketplace is becoming increasingly competitive. Our survey shows that CEOs here are very focused on growing their customer base. It also shows that they’re concerned about shifting consumer preferences and behaviours. These two factors contribute to many of them making changes to their customer retention and loyalty strategies this year.

There are a many reasons for this, and I think it’s useful to take a step back and look at the major (global!) trends influencing growth and optimism in Africa, and how these trends are influencing decisions and strategies.

First, demographics: the developed world’s population is ageing but developing economies like those in Africa have a younger population of workers and consumers that are shaping the global outlook for growth. Younger workers want interconnected and personalised products, services and technologies. They are very mobile themselves and also very attached to their mobile devices!

Next, there is an economic power shift – there is more trading taking place between emerging economies. We know this is happening in Africa, with companies investing in regional networks and talent mobility. You can’t look at one market or customer segment in isolation.

Rapid urbanisation is shaping the way that we consume, where and how we live, what we do and think. There will be an estimated 440 new cities in Africa by 2050. These cities will need infrastructure, whether it’s power, schools, highways, roads, harbours, bridges and more. Cities in Africa will require a fundamental shift in public service delivery to meet the needs of growing populations. And we’ll see greater concentrations of consumers who want more choice and more information.

Climate change, resource scarcity and food security will also have a mega-impact on Africa, as will technology. How will these trends shape Africa’s future? Smart companies investing in Africa are looking at these trends with a careful eye to inform strategic decision making.

We’ve got a lot more insight to share about doing business in Africa. Have a look at our Africa Business Agenda publication—we publish the next annual report on 11 September 2014. It summarises the results of our Africa CEO Survey and includes interviews with dozens of business leaders and our own experts. It’s a good primer for understanding Africa… upfront.

Suresh Kana | Territory Senior Partner, PwC Africa
Profile | Follow me | Email | + 27 11 797 4000

 

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