By Alex C
Series of analyses by financial experts suggest that the largest African markets in 2020 will be Lagos, Cairo, Alexandria, Cape Town and Johannesburg. Each of these markets is projected to have over $25 billion annually in spending and can be comparable to Mumbai or New Delhi in India.
A number of smaller African markets, including Ibadan, Kano, Dakar, are also projected to develop consumer markets worth $10 billion annually.
The consumer facing sectors in Africa will largely be responsible for this growth, these sectors include the likes of telecommunications, consumer goods and banking. A combined $860 million was spent on these sectors in 2008 and it is projected to increase to $1.4 trillion over the next five years if real GDP continues to grow at current pace.
As household income grows, consumption will increase in retail banking, telecommunications, food and beverages, and housing. This will, in turn, spur more consumer markets large enough to be attractive to more multinational companies; in many ways, this looks like a virtuous cycle.
Experts believe that to become more mature and viable, Africa’s markets need lots of Infrastructure and this is an opportunity for companies and investors. The continent has huge power, transportation and water gaps that will require upwards of $70 billion invested in infrastructure per year to bridge. This can be achieved by concerted efforts involving African governments, African and international businesses and investors.
As soon as this is handled, Africa’s economic fortunes will skyrocket. By 2040, Africa can be home to 20 percent of the world’s young people and will probably have the largest working‐age population.