Africa is a diverse and magical place and although the continent has faced some economic challenges in the past, and continues to address such issues, the optimism, innovation, and resilience of the people is truly inspiring. Testimony to this strength of national character, Africa is now home to several of the world’s fastest growing economies and is becoming a continent to watch.
Key to this economic growth is the African Continental Free Trade Area, which was formed in January 2021; it is the world’s largest free trade area, connecting 1.3 billion people across 55 countries. This Free Trade Area makes it easier for African businesses to trade across a wider range of markets and attract higher amounts of Foreign Direct Investment into the continent, underpinning further economic growth.
Africa is widely regarded as the most resource-rich continent, as evidenced in the map above. The continent comprises approximately 40% of the world’s gold and up to 90% of chromium and platinum deposits, in addition to the world’s largest reserves of cobalt, diamonds and uranium. It has approximately 12% of global oil reserves and 8% of natural gas reserves and is also home to approximately 65% of the world’s arable land and 10% of renewable fresh water sources. This makes Africa an attractive place for companies to export where their expertise is in demand and required.
South Africa
South Africa remains the most developed economy on the continent and is a strong export market. The International Monetary Fund (IMF) recently raised the country’s economic outlook to 2.3%, indicating that a post-pandemic recovery is under way. With a well-developed mining sector and a recovering construction sector, there are several opportunities for companies in the materials handling sector.
Several local companies are already active in the market across a range of different sectors, including materials handling, mining, life and health sciences, cyber security, food and drink, waste management and technology.
Kenya
Despite experiencing a slight slowdown in 2020, Kenya’s economy is now recovering, with growth forecast at approximately 5%. This will be driven by the key sectors of agriculture, manufacturing, mining, tourism, and services. While Kenya’s recent election of a new President may result in some changes, the economy is still expected to perform positively.
Improvements to the business environment has seen more exporters drawn to the market with several local companies successfully selling here. Kenya’s growth and access to other East African markets like Tanzania, Uganda, Ethiopia and Rwanda make it an attractive entry point.
Ghana
Ghana is also an interesting market, recognised for having the fastest growing economy in Africa in 2019. This was largely supported by an enabling business environment and supportive government. Key sectors include agriculture, mining, manufacturing and services, and the discovery of offshore oil has contributed to the general positive outlook for the market. Companies have had positive experiences in this market, often using Ghana as a hub for expansion into the West African region. As the Ghanaian economy continues to recover from the pandemic, the growth forecast for 2022 is approximately 5%. Going forward, export opportunities will exist for local companies in the areas of advanced manufacturing, materials handling, agri-food, life and health sciences and technology.
Nigeria
The sheer size of Nigeria’s economy means that it continues to be a major market for exporters. Having been largely dependent on oil and gas in the past, the Nigerian Government has been focusing on efforts to diversify the economy, with agriculture, manufacturing and services playing a major role. These sectors provide opportunities for technology, advanced engineering and materials handling companies, while healthcare, agriculture and food and drink also present opportunities for businesses.
Egypt
Driven by its Government’s 2030 Vision, Egypt’s economy has recently undergone a period of growth. So much so that the IMF anticipates that the country will achieve the fourth highest growth rate among the most important global economies for 2023, currently forecast at 5.5%. This is a major achievement against the backdrop of the IMF reducing the growth expectations of most global economies and is reflective of the positive image of the Egyptian economy within major international institutions. Companies are starting to assess opportunities in Egypt, specifically in relation to materials handling, waste management, life and health sciences and cyber security sectors, with renewable energy beginning to garner interest.
In conclusion, Africa offers tremendous opportunities for businesses. As always, our team remains committed to providing insightful in-country and partnership intelligence, which will facilitate market entry for our businesses and support their export journey.
