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Africa : Business sees opportunity , growth & more
For years the African continent has been shrouded in controversy when it comes to its future potential .
The optimists talk about Africa as the next economic frontier while the sceptics point to a low growth rate , poverty and conflict as key challenges standing in the way of notable development .
Yet , the continent has grown its economy by around 5 % per annum over the last decade , is as urbanised as China and has as many cities as Europe with a population of more than one million , according to Future Agenda .
The World Bank reports that Sub- Saharan Africa is “ home to more than 1 billion people , half of whom will be under 25 years old by 2050 ”, suggesting that the workforce of the future is based here . They go on to say that Africa is a “ diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty ”.
While potential is not a measure of performance , what is productive is to consider the motivations of businesses opting to either enter the African market , or expand operations on the continent . And that ’ s notwithstanding the challenges , or as Shaw Mabuto , partner at private equity firm SPEAR Capital , puts it : “ While there are undoubtedly risks in Africa , they are well known and understood . Investors can mitigate for them .”
SPEAR Capital is particularly excited about the opportunities in the ESG space in Africa . “ There are many businesses that have been able to thrive in spite of the prevailing environment and lack of government support . With the right backing , companies across the continent can grow successfully while at the same time making the world a better place and providing returns to their investors ,” Mabuto says .
This positive sentiment about Africa ’ s potential is echoed by a number of businesses who have chosen to expand their operations on the continent .
PICKING THE NEXT MARKET IS KEY When SweepSouth decided to scale their business across the African continent in 2020 , they chose Kenya as the first territory to launch their on-demand home services model outside of SA ’ s borders . Three months ago they started operations in Nigeria , and plans are now afoot to expand further into Africa .
“ There are so many factors that go into choosing a new market , so we decided to look at countries where people experience the same sort of home-care needs South Africans required when SweepSouth was started ,” says Aisha Pandor , SweepSouth CEO .
Kenya and Nigeria were obvious choices , representing big-market regions with a high growth opportunity , ever-increasing internet penetration and digital literacy , and the potential for positive impact on employment , education and economic growth via smart , scalable technology solutions .
“ Kenya appealed to us because it felt like an in-between in terms of culture , market segment and dynamics , and also smartphone and internet penetration when compared with West Africa . And Nigeria is a really exciting new venture that we hope will serve as a base for further expansion into the West African region ,” says Pandor .
West Africa too is increasingly recognised as an area of economic and growth interest for businesses looking to get a foothold on the continent .
Integrated PR and marketing agency Irvine Partners recently opened an office in Ghana in response to an increasing number of their global clients needing support there .
Joshua Sortino | Unsplash
Africa will be home to the majority of youth of the world by 2050 and the continent will lead with technology and innovation .
The agency already has wholly owned offices in South Africa , Kenya and Nigeria , and has realised the potential of this West African country .
“ Most of our clients ’ interest in the region stems from Ghana ’ s position as a tech hub within Sub-Saharan Africa and its growing financial services industry , but we ’ re also seeing many other industries looking to invest in and expand into the country . Strategically it makes a lot of sense for us to have a presence in the country and we ’ re optimistic about its potential ,” says MD Hayley van der Woude .
EMBRACING INNOVATION Lastly , but certainly very significantly , when it comes to businesses where customer-centricity is key , such as banking and telecoms , African players compete more effectively than their international counterparts , according to a finding in the Boston Consulting Group ’ s digital maturity index .
“ It ’ s also hardly surprising that these are two sectors where Africa has led the world when it comes to technology-led innovation ,” says Ngadi Job Goshi , GM at Liferay Africa . Ultimately , while Africa may be less digitally mature than other markets , there can be no doubt that businesses on the continent are unafraid to embrace technology and innovation . And , in the customer-centric ways in which they ’ ve done so , despite facing adversity and strong headwinds , there are lessons for the rest of the world in the tenacity and ingenuity birthed and nurtured in the African soil .”
Ndagi believes that as critical mass builds , Africa will be well placed to own and rewrite its narrative and take its place among the world ’ s technological and innovation leaders .” CLA
6 www . coldlinkafrica . co . za COLD LINK AFRICA • June 2022