Key Emerging Markets: South Africa, Nigeria, Kenya, Ghana, Ethiopia
Major Industries: Agriculture, Mining, Oil and Gas, Financial Services, Consumer Goods, Pharmaceuticals
Africa is the second largest and second most populous continent in the world, but is commonly seen as backward and deprived of opportunities. With its wealth of minerals, metals, oil and other lucrative commodities, investors have exploited Africa just for its natural resources. Over the years, the economies of Africa have expanded and diversified, reducing their dependence on the natural resources bestowed upon them. Rapid economic development has transformed Africa to become the second fastest growing region in the world, and the new emerging markets investment frontier.
Stability of Region
Political instability is a common trend across the Sub-Saharan continent. Rampant corruption, disputed elections and civil wars plague many African countries and continue to contribute to poor business conditions in the region. Even in South Africa, the economic leader of the continent, crime rates are persistently high and labour strikes are commonplace. Such instability has a negative impact on investors’ perceptions of the region.
The Sub-Saharan Africa economy is traditionally supported by the primary industries. The East African oil boom has attracted considerable investments into countries like Kenya and Tanzania. The agriculture sector is still supporting the non-urbanised parts of the continent. With rising middle class in urban areas, industries for consumer goods and financial services have started to show significant developments, especially in key emerging countries such as Nigeria and Kenya.
Although Africa has strong trade links with Europe and China, domestic demand is key to economic success in the long term. The dawn of industrialisation has helped consumerism to take place throughout the region. The shift from a mainly export-based industry to more diversified growth drivers would stabilise the prospects of the continent and reduce the reliance on economic conditions in export markets.