Across leading African economies, the wind of economic optimism is blowing quietly. The optimism stems from the new generation of consumers now emerging across the continent. The purchasing power of these emerging consumers is positively different from what was obtainable in Africa a decade ago. In Nigeria, for instance, the collective buying power of households earning $1,000 to $5,000 a year doubled from 2000 to 2007, reaching $20 billion. Nearly seven million additional households have enough discretionary income to take their place as consumers as observed by Mckinsey report on Africa in 2010. By 2014, the number of such households across Africa could reach 106 million.
Africa’s labour force is a key source of this new generation of consumers. Productivity is expanding, in contrast to what is happening in much of the rest of the world. The continent has more than 500 million people of working age. By 2040, their number is projected to exceed 1.1 billion—more than in China or India—lifting GDP growth. Over the last 20 years, three-quarters of the continent’s increase in GDP per capita came from an expanding workforce, the rest from higher labour productivity. According to a Mckinsey report, Africa’s consumer-facing sectors are growing two to three times faster than those in the OECD countries.
The key factors that have contributed to the growth of new army of consumers in the continent include the African Government’s deliberate strategy to adopt policies designed to energise and open business space across markets. Many African countries have started privatising state-owned utilities, reduced restrictions on international trade, and strengthened regulatory and legal systems.
The paradigm shift across the continent opened the door for foreign investors to enter business sectors previously crippled by decades of Government monopoly. In the last decade, many African countries privatised their telecommunication/ICT sectors. Since the privatisation, teledensity in Africa has experienced exponential growth delivering over half a billion mobile phone subscribers and thousands of new jobs in less than a decade.
While you are here, we will appreciate if you could view the website of our upcoming international event, Africa-Australia Infrastructure Conference 2012:
The Conference is a 2-day event designed for Australasian investors and developers aspiring to invest in growing infrastructure opportunities in Sub-Saharan Africa.
The Conference will be held in Sydney (venue TBA) on Monday 3 and Tuesday 4 September 2012. Your views and comments on the Conference would be most appreciated.