Africa, a promising growth story - CNBC Africa

Africa, a promising growth story

Special Report

by admin 0

Africa has also been touted as an area of untapped growth. PHOTO: Getty Images

“Real, tangible things are happening on the continent. Many people think that’s its only about the commodity prices but the rise of Africa started before the rise of commodity prices. It’s also about improved governments, improved access to information, 60 per cent of Africans have access to a mobile line,” Stefano Niavas, partner at BCG Johannesburg, told CNBC Africa.

“It’s all about political stability. You have 40 per cent less coups than in the 90s. It’s also about the new consumer class that is emerging on the continent – by 2017, you’ll have 260 million people in Africa with significant purchasing power.”

According to the World Bank, the probability of an African country experiencing growth acceleration increased to 46 per cent in the last decade, up from 21 per cent in the previous decade and the probability of growth deceleration decreased to 12 per cent.


Africa has also been touted by some as the final frontier and the last sizeable area of untapped growth on the globe.

“If you go back a bit further, in the 70s, Africa was growing and the GDP per capita was higher than China or India. Then Africa went through what we call ‘lost decades’ where Africa was actually decreasing. Over the past 10 years we’ve seen a re-emergence of Africa and you have a lot of reasons behind that, and that makes us believe that this time around, the growth of Africa is different than in the 70s,” Niavas explained.

He added that despite Africa’s growth potential, there are risks and investors need to be well-aware of the market.

“The biggest concerns are, first of all, the risks, especially if you think about MNCs [Multinational Corporations]. They always think about Africa as a risky place and very volatile because you have 54 markets and some are still very volatile. The second thing is about the capabilities that you will find in the market and, finally, how to do business in those markets,” Niavas said.

“Many companies in the way they approach Africa, once they have prioritised their markets, organise themselves into hubs to make those regions more sizeable and also to get closer to the market. You really need to do your homework before actually thinking about expanding into Africa.”