“The future of business in Africa is promising,” reveals a Dubai Chamber of Commerce and Industry report.
Released ahead of the Africa Global Business Forum 2014 – taking place on October 1 and 2 at Atlantis, the Palm – the study provides detailed research on key African markets to local investors.
Hamad Buamim, Dubai Chamber’s CEO, explains that he is particularly encouraged by the economic potential of Sub-Saharan Africa, as “an increase in economic reforms, rising fiscal spending and ties with fast-growing economies in Asia” are helping it become one of the world’s fastest-growing regions.
Nonetheless, despite its vast resources and accelerated growth rate, Africa still desperately lacks development in key sectors, such as infrastructure, to utilise its assets. The report highlights the fact that “Africa holds 60 per cent of the world’s uncultivated arable land, but remains a net importer of several food products, as well as processed foods.”
Another sector that offers local investors huge potential is telecom. Although there are more than half a billion mobile subscribers, many markets are far from saturation and internet access is still almost non-existent in many countries. Even in Nigeria – which has a population of 170 million, making up 20 per cent of the region’s overall population – internet usage stands at a dire five per cent.
The report also assesses key African markets, such as Ghana and South Africa, and their economic relations with Dubai. On average, yearly non-oil trade between major Sub-Saharan economies and Dubai stands at $2.2 billion, of which two thirds comprise Dubai’s imports.
Driven by the expansion of gold mines and a growing oil and gas sector, Ghana’s expected annual real GDP growth of 7.5 per cent implies good business opportunities. Moreover, “for retailers, Ghana has the potential to become the gateway to Africa’s 250 million consumers”.
On the contrary, despite having the most advanced business environment in Africa, the report reveals that South Africa’s market opportunities are ‘moderate’. Its GDP growth is forecast to average 3.5 per cent, as both the banking and telco sectors are nearing saturation point.