Opportunities for business in Francophone Africa

14 August 2014

Francophone Africa has become a territory full of opportunities for business. Countries of the Maghreb have become a critical hub for a lot of companies, should they be European or African, in many areas. North Africa benefits not only from a favorable geographic location, close to European markets, but also from a history of dynamic commercial development and relative economic wealth compared to many other countries across the continent.

Also, Francophone sub-Saharan Africa appears today, more than ever, to be a final frontier of the global economy. With expected real GDP growth rates of, for example, more than 6% over the next five years in the West African Economic and Monetary Union and 5% in the Central Africa Economic and Monetary Community, economic growth is becoming a reality for most of the countries  concerned, supported by ambitious government development plans. The interest of investors, seeking profitability that they can no longer achieve in more mature economies, is undeniable.

As CEOs throughout Africa have unanimously confirmed that they see high growth potential in Africa, how do they intend to capture that growth?

The answer lies in 3 priorities: growing customer bases, enhancing customer services and improving operational effectiveness. Perhaps because of their unique development trajectories and growing competition in their markets, a number of African countries stand out for the emphasis their CEOs are placing on gaining new customers and keeping them.

And it is very important in some sectors where there have been very high growth rates.

For example, in the telecom sector, the level of mobile phone penetration has increased by 20% per year for each of the past five years.

In others, such as electricity, fundamental change is in progress, with 25% of the African network out of service and most of the network more than 40 years old. The current annual infrastructure investments across the continent are estimated to be $27 billion in power, $15 billion in water and $10 billion in transportation per year.

In the energy and mining sectors there has been increased interest and significant investment activity on the part of international players, increasingly from China, India, the Middle East and Brazil. The increasing population and GDP growth are expected to lead to a surge in consumer demand.

Signs of increased consumer purchasing power on the continent can be seen in the success of Casablanca’s Morocco Mall, one of the five largest shopping malls in the world, which opened in 2011.

And in sectors such as banking, insurance, automobiles and consumer goods, CEOs are scrutinizing their markets to adapt and take advantage of the most attractive pockets of growth for their companies.

As local companies are strongly becoming regional champions and as international leaders are investing in the region, we are available to help you seize all the opportunities the region and the world have to offer.

 

Bernard Gainnier | Chairman & Territory Senior Partner at PwC France & Francophone Africa
Profile | Follow me | Email | + 33 156578131

 

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