Africa is market of the future - NBF

3 Jun 2009

According to the NEPAD Business Foundation (NBF), partners and investors need the nearly one billion African consumers, and policies should be engineered to cater for the future economy. It believes that population forms a great part of achieving a country's goals.

The NBF notes that China and India's growing population motivated them to grow into key players in the world. According to Stanley Subramoney, deputy CEO of PricewaterhouseCoopers South Africa and NBF director, a growing world population will cause a "perfect storm" of food, energy and water shortages by 2030. He says, “by 2030, the demand for resources on a global scale will escalate to unprecedented levels as the world population tops 8.3 billion. Climate change will exacerbate matters in unpredictable ways.” These issues are meant to offer business opportunities because "where there is a need, there is an opportunity."

According to the NBF, by 2050 some of the poorest nations in the world are projected to triple in size. Nigeria, for example, is projected to become the world's fourth most populous country while the Democratic Republic of Congo (DRC) and Ethiopia will be amongst the top 10 for the first time; nearly a quarter of the world's population will come from Africa. Subramoney points out that “mature markets are not the markets of the future - developing economies are. Africa is a market of the future”.

He continues, saying, “A billion is such a large number, that it is difficult to stretch the imagination and grasp the significance - it comes as a surprise to many when they realise that Africa's population is nearly a billion people. As multinational companies were a driving force in Eastern Europe's post communist transition; bringing new skills; technology; training; and better working conditions, the same phenomena is emerging in Africa. Sensible partnership with these companies, where macro and micro economic partnerships may be joined for mutual benefits will result in a win-win situation and mould the market to benefit the multinationals and Africa in the short term”.

The NBF believes that Africa's geophysical environment can accommodate the growing population, whilst the aggregate of Africa's Gross Domestic Product (GDP) reveals that Africa is the fifth largest economy globally, exceeded only by China, Germany, India, Japan, and the US. Thus, Africa offers the opportunity to tap into a market of universal importance and cannot be ignored in global terms. Even in the current global crisis, the modern era of globalisation remains a powerful force for change and to lift masses of people out of poverty.

Subramoney concludes that in the short-term, governments will have to manage the lower revenues from commodities and trade but must build on good governance, open markets and strong institutions which will enhance their long-term sustainability.