June 16, 2021
World Market

India-Africa Forum 2011

India-Africa Forum 2011

Exploring Indian investment opportunities into Africa

By Rachana Chowdhary

I recently attended the India-Africa Forum 2011, an event from the Financial Times Limited in association with the Frontier Advisory held in Mumbai recently. It was interesting to have noted an overwhelming buzz in the conference room with participation from various C-suite executives evaluating their business propositions for Africa. I summarize below the discussions for the benefits of our readers.

Why Africa?

The case for investing in Africa has been widely made. The continent is booming and offers a largely untapped market. But Africa has many economies, with differing populations, wealth and operating conditions. Dr. Martyn Davies, CEO Frontier Advisory delivered the keynote address ‘Quantifying the Emerging India-Africa Commercial Corridor’. An overview of ballooning trade and FDI flows between India and Africa with a Growth of 5.25 % in 2011 ensures higher interests in the commercial and political framework. Talk of Africa’s success is backed up by the numbers. Beyond GDP growth, investment into a numbers of sectors is at an all time high. The telecommunications revolution that has swept the continent now attracts billions in investment into the sector each year.

Where in Africa?

The case for investing in Sub-Sahara Africa (SSA) is strong. SSA comprises of 46 countries (including South Sudan) with vastly differing economies. Looking at three key issues: market size, market growth and the operating environment, by weighing these three equally, indicative Top 10 rankings for Investments in African destinations are: South Africa, Nigeria, Ghana, Ethiopia, Tanzania, Botswana, Kenya, Uganda, Angola and Zambia. Given the differing needs of businesses, these rankings may be considered indicative rather than prescriptive.

GDP Growth in Africa

According to the latest projections from the African Development Bank, Africa’s combined GDP could grow almost tenfold by 2060 to $15,000bn from a base of $1,700 bn. Globalization is changing the opportunities for development in low and middle-income countries. The next 50 years are likely to be shaped by three major global forces: the changing structure of global trade, new trends in technology and the international architecture governing trade, finance and development assistance. There is a shift in the economic activities from G7 countries to the emerging economies.

African Consumer

There are a number of reasons why companies should be looking at Africa as a consumer market. These include large population (over 840 million people), a young demographic profile, forecasts of higher urbanization rates, aspiration to grow and spend, adaptability to change and a largely untapped market. Some of the marketers favorite choice destinations are South Africa, Namibia, Botswana, Swaziland, Mozambique, Lesotho, Zambia etc. Africa by the virtue of its size has a varied consumer pattern across South, East and West & North Africa. Marketers need to follow the ‘Glocal model’ customizing their products and services to suit the African consumer.

Write to me with your views and suggestions to rachana@mediavalueworks.com