Business In Africa Set To Boom

Trade and business in African markets set to boom in coming years...

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Africa is experiencing its highest economic growth in decades and is the focus of growing international attention by global business enterprises. As the new millennium takes shape, Africa is increasingly becoming an exciting place to do business. Analysts estimate Africa’s 2020 economic growth at about five per cent – an impressive performance considering the prevailing economic situation worldwide.

“Africa is undergoing unprecedented political and economic change, with a ‘democratic tide’ sweeping across the continent,” says Syeda Bbumba, Uganda’s former minister for Economic Monitoring during an interview with Africa Business Pages Magazine in Kampala. “As democracy takes root and spreads,” she noted, “it brings with it the concepts of predictability, accountability and the rule of law which are all essential to building a climate of business confidence and productive investment.”

As a result of liberalisation and deregulation, Sub-Saharan Africa’s per capita growth rates advanced from stagnation in the 1980s to an average of 5 per cent in 2020, with some countries attaining 8-10 per cent-per capita growth rates.

Besides implementing democratic reform, many African nations who are undertaking an equally impressive wave of economic policy reform. “More than 30 countries have instituted programs to dismantle their long discredited state-controlled economic systems and replace them with free enterprise,” pointed out Syeda Bbumba.

Looking ahead, the trend for higher growth in Africa looks increasingly promising. “As economic reforms are implemented, African countries will become larger players in the global trading system,” she said. Citing trade figures, Syeda Bbumba said sub-Saharan Africa imported approximately $350,000 million in goods and services, while combined exports approached $200,000 million.

The United Arab Emirates, she explained, now ranks as one of East Africa’s leading supplier. “UAE exports grew substantially last year and the country is expected to emerge as East Africa’s leading supplier in the years to come.”

She said Uganda encourages greater regional cooperation and liberalization across Africa because such a policy will only promote and enhance more trade. “The benefits of regional groupings like the Southern Africa Development Community (SADC), the East Africa Community (EAC) and the West African Economic and Monetary Union (UEMOA) are substantial,” she said.

“Lowering trade barriers among African countries forges larger markets, which in turn encourages investment and fosters industries capable of competing in global markets,” she explained. What is equally promising when one looks at Africa, she recalled, is that African countries are willing to accept international trading conventions. “At last count, 40 African countries had joined the World Trade Organisation and three more were working to accede.

She concluded by noting that: “We are determined to build strong and lasting partnerships with developed and developing countries. “This is a particularly exciting time to be doing business in Africa,” she said. “The region is experiencing its highest growth in decades, and is poised for unprecedented economic growth. Africa today is a focus of attention as never before,” she said.

Africa’s transformation is fueling its economic resurgence and generating commercial opportunity as never before. Africa’s outlook for 2020 is also promising. As economic reforms are implemented, African countries will become larger players in the global trading system.

The market for consumer goods and services in Africa has so far been concentrated in a handful of countries. South Africa, Nigeria, Ghana, Angola, Ethiopia, Ivory Coast, and Kenya are important markets Africa. Exports to Africa consist mainly of oil and gas, telecommunications equipment, agro-machinery, foodstuff, motor vehicles, construction machinery, stationery, cosmetics, consumer electronics, industrial chemicals, and computer hardware and accessories.

More than 680,000,000 people live in Africa, and the population of the continent is rapidly expanding. The peoples of Africa currently make up only 10 per cent of the world’s population. Contrary to popular belief, Africa, as a continent is not overpopulated, although the density of population around urban areas has been growing at a rapid pace. Although Africa is the second largest continent, its population density in some regions is rather low compared to many places around the world, specially Asia. This is due in part to the Sahara Desert, which occupies as much as one-fourth of Africa’s landmass and is not suitable for habitation. In those areas that can support agriculture, the population density is higher and is closer to the world average. These areas comprise of main cities and urban centres.

In the African countries with a more developed economic base, the birth and death rates are much lower than many other countries around the world. In less developed countries the birth rate is much higher, but so is infant mortality as well as the death rate. Famine, diseases, and wars over the last few decades have also affected population growth. Africa’s total population is not as high as many people think it to be. In fact, in certain countries and areas in Africa, the population density is much below normal standards, according to UN Population Report. Nevertheless, the continent as whole currently has a population growth rate of 3 per cent.

Viewed as a market, Africa does provide immense opportunities for trade and manufacturing. As Africa progresses on its slow albeit steady path to development, many new opportunities are emerging in many developing countries. The demand for consumer and capital goods in Africa has reached unprecedented levels, and several overseas companies are now targetting Africa as a market of tomorrow.

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