IT’S AFRICA’S TURN……… WHY BUSINESSES NEED TO ACCORD AFRICA MORE ATTENTION
For the past decades, Africa has been left in the shadow of progress with many developments passing the continent by for quite so long only to receive these upgrades later with the rest of the world already moved on. Ever since the end of world war 2 and the demise of direct colonialism, the “dark continent” as it was known has often played catch up to the rest of the world simply because those abroad had little or absolutely no knowledge about the continent and its potential benefits, to some extent this is still the case.
Times have changed nonetheless and as of August 2014, Africa is the second most attractive investment destination with businesses tripling foreign direct investment now estimated at 57 billion dollars. But a question that the business owners would pose is, “why opt for Africa? ….” Here is an insight as to why businesses should choose to take their services to Africa or for those already there, “why is it necessary to intensify operations?” There is a need to clarify facts that might not be properly comprehended and these are some of the things businesses need to know.
Africa’s rapid growth in mobile connectivity
It is now proven that two out of three Africans own a mobile phone and the number is estimated to get even better with voice call and data usage expected to increase in the next 3 years by twice the projected global expansion rate. In addition a report was put out showing African countries’ mobile subscription will increase from 635 million to 930 million people by 2019 whereas in Sub Saharan Africa, Nigeria and South Africa are still the leaders in mobile subscription and closely following are the Democratic Republic of Congo, Ghana and Uganda.
Furthermore the partnering of telecommunication companies and financial powers to embrace money transfer through the use of mobile phones has boosted the situation with businesses now able to easily and directly transact with customers and other partners i.e the rise of MTN mobile money, Mpesa and Airtel money and also the use of services such as DusuPay to link foreign businesses with these mobile transfer services and clients therefore easing the transaction process.
The acceptance of the internet and smart phones has led to the boost in exposure of the businesses with digital marketing through the use of platforms like social media.
Growing GDP of the populations and utilization of resources
Up until recent times, Africa had not utilized its virtually limitless resources but a change in the tide has led to much more stable governments with clearer fiscal policies hence the reduction in perceived business risk for the foreign companies. A World Bank research has shown that governance rankings have been above average in countries such as South Africa, Namibia and Botswana, this has led to increased use of resources to educate the masses and avail high value jobs which has propelled the consumption of countries in Africa thus the growth in GDP. This is an evident attraction for the foreign businesses whose services are continuously yearned for by the hungry populace.
Expasion of consumers numbers and target markets
Consumption expenditure in Africa continues to increase with statistics portraying a predicted rise in spending from 860 billion dollars as recorded in 2008 to 1.4 trillion dollars by 2020 ad as the World Bank stated, the middle class is anticipated to increase from 355 million to 1.1 billion people which will be 42% of the African population and they shall be spending on things such as betting, healthcare, telecoms, entertainment etc which is beyond the usual basics of food and shelter. In addition the majority who are the poor with their 65% mass provide a big consumption number that foreign businesses can tap into with high volumes of affordable products which will ensure an increase in sales for these companies. The above consumer groups are a viable target for hopeful businesses to venture towards.
Embracing of peace in the region
Contrary to the days of old, African countries have embraced peace and democracy in the region. Despite the unrest in some few countries going on, majority of Africa is now peaceful and democratized which is a good indicator for foreign businesses. This recently adopted peace has stimulated the masses to focus on essentials such as education, embracing technology and new business ways which has led to an African population that is more learned and a market that is hungrier to consume goods and necessary services provided by the above businesses in a more suitable environment hence another positive indicator for the businesses.
Emerging of large metropolises
Research shows that Africa has a higher level of urbanization (40%) than India and that it will have 15 cities with an excess of 5 million people by 2025, some of which are Lagos (Nigeria), Kinshasa (DR Congo), Nairobi (Kenya), Dar es salaam (Tanzania), Kumasi (Ghana) just to mention but a few. This increased urbanization has led to a transition from an agriculture based to a more industrialized set up as Africans flock cities in search of jobs and the general urban life therefore increasing the market and consumer base that foreign businesses will want to take advantage of when maximizing benefits in these cities.
With the above as a portion of the reason why it’s time to turn towards Africa, this virgin market is a field to be amply explored with the continent continuing to embrace foreign services and products to better livelihood. The undoubted recommendation is that businesses should look into this gold mine.