Editorial
Africonsumption : Time for Africa to Consume African ?
By George Wainana george . wainaina @ thinkbusiness . co . ke
That the explosion of overwhelming interest in Africa from both the West and the East is aimed at making inroads and wanting to cement their dominance of market share by pushing product on the continent is undeniable .
The global market at this juncture is devoid of choice , since only Sub- Saharan Africa presents an enormous and unsaturated market for most goods and services ; hence the influx . However , this presents a golden opportunity for African brands to flourish by leveraging on their understanding of the home market .
Openness among African Member states
The extent to which intra African trade is able to blossom , will be predicated on policy development initiatives aimed at eliminating inhibitive barriers to trade . African leadership has grappled with arriving at an amicable conclusion to the ever persistent matter of allowing free trade amongst AU member states .
For instance in 2014 , James Asare- Adjei , President of Ghana Industries stated that Ghana relied heavily on Tariff revenues to fund development and an Economic Partnership Agreement would dry up a USD $ 300 million annual revenue stream . Unidirectional and dissenting voices among the African states is a prime reason why liberalization policies remain stagnated .
Africa ’ s largest economy Nigeria continues to downplay claims by the African Union that it is onboard with plans to adopt an African Visa free policy that allows inter African movement and trade . The passport will grant unlimited access to all African Union member states and all Africans are eligible .
With a rollout targeted for completion by 2018 , it will be a significant step towards liberalization within the SSA region .
Brands beyond borders
Increased liberalization bears the potential of presenting an opportunity for exponential growth of the homegrown businesses beyond their countries of origin . Currently in Africa , South Africa remains peerless , and has perfected the art of franchising . Debonairs Pizza , Steers , Mugg & Bean , Gourmet Kitchen among others are food franchises under a holding company in the consumer services sector called Famous Brands , and is Africa ’ s largest branded food franchisor .
The Famous Brands Group in 2016 , successfully managed to conclude 7 acquisitions , had a successful leadership transition , alongside a revision of the vision strategy . The South African based Franchisor is set to expand its footprint in Saudi Arabia , Lebanon , Morocco , Iran , and Egypt .
Jovago is an online hotel booking service founded by Africa Internet Holding . The portal now has over 4 000 local listings across Africa , as well as regional headquarters in Lagos , Nairobi and Ivory Coast . After recently expanding into South Sudan in April 2014 , the online portal Jovago is continuing to expand across Africa , bringing operations to
Zanzibar , Djibouti and Malawi in order to offer easy and transparent hotel booking to users across the continent .
Africa Internet Holding is the largest , fastest and most successful African internet group . Founded in 2012 , AIH is supported by Rocket Internet and Millicom that is headquartered in one of the most vibrant continents in the world . Under the AIH umbrella are Jumia , Jovago ,
Hellofood , and Lamudi among others that have cemented their place in the online retail sector .
WPP Scan Group , founded by Bharat Thakrar is Sub-Saharan Africa ’ s largest marketing and communication group that operates a multi agency model across multiple disciplines within the continent . Among the top agencies within its fold include Ogilvy and Mather , SCANAD , Blue Print marketing , and H + K Strategies amongst others .
The communication juggernaut boasts of a presence in 25 countries , most of which are affiliate partners across the region . It is through formation of these formidable partnerships that the Group has been able to expand its service offering across the continent and consequently barred any noteworthy competitor from entry in this space . The media empire has an estimated market capitalization at the NSE totaling US $ 70 million .
High value and processed goods : The only way out ?
The overwhelming trade imbalance between Africa and other trading regions is staggering and crippling to say the least . A UNCTAD Trade and Current Account Balances : Sub-Saharan Africa 2016 , states that a major problem facing Sub-Saharan export dynamics is the high concentration of a few primary commodities , and regional specialization in none .
For instance , crude oil as a single commodity accounted for 45 percent of total exports from the continent . Furthermore , the top 13 products accounted for 71 percent of the total exports , and clearly exhibits an underlying problem of overdependence on natural resource exports .
Moreover , primary products exported by African nations either regionally or around the world are low value commodities which bear little effect on the balance of trade . The alarming deficiency in value add or processed goods is exhibited in petroleum . Crude petroleum is the first exported product , whereas refined petroleum is also the first imported product into the continent . It is time for Africa to rethink its strategy TB
2 | THINK BUSINESS • NOVEMBER 2017