West Africa sees highest reported 2014 profit margins - CNBC Africa

West Africa sees highest reported 2014 profit margins

Western Africa

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The Nigerian economy is expected to grow over five per cent this year.

The region with the highest reported 2014 profit margins was West Africa, according to an Economist Corporate Network survey.

The 2015 African Business Outlook Survey – Africa is the horizon – sheds light on sub-Saharan Africa’s growth prospects going forward as well as on its key regions.

“Over 60 per cent of respondents reported an operating profit of 10 per cent or more [in West Africa], and 26 per cent of respondents reported an operating profit margin higher than 20 per cent,” the survey said.

“The next most profitable region is Southern Africa, where 57 per cent of respondents reported an operating profit margin above 10 per cent.”

It added that executives reported East African operations as having the highest percentage of losses, at 15 per cent.

Executives also named Nigeria, South Africa, Kenya and Angola as their top markets in 2014.

(READ MORE: Oil prices slash Nigeria 2015 GDP growth)

According to survey, the centre of the global economy has been shifting from the developed to the developing world over the past twenty years.

“In 2015, sub-Saharan Africa’s GDP is expected to grow at 4.5 per cent, making it the fastest-growing economic zone in the world, outpacing Asia’s regional average of 4.3 per cent annual growth,” it said.

“Obviously, in terms of overall market size, sub-Saharan Africa is still quite a bit smaller than Asia, but, when considering the longer term, continued steady growth in Africa will result in an economic bloc with global impact over the next two decades.”

The region’s two largest economies—Nigeria and South Africa—together compose over 63 per cent of sub-Saharan Africa’s total GDP.

However, the survey showed that their prospects vary considerably.

“The Nigerian economy is expected to grow over five per cent this year, while the South African economy is forecast to grow by 1.6 per cent,” it added.

“These growth-rate differences reflect, in part, the current state of infrastructure in each country, as well as the breadth, depth and stage of development of the formal economy in each country.”

(READ MORE: Ebola destroying agriculture in West Africa)

Despite the fact that West Africa faces many challenges, including Islamist terrorist movement, Boko Haram and the Ebola virus, which infected over 20,000 people across at least five West African nations, the region is still poised to see growth.

“Executives by and large expect revenue in West Africa to grow in line with corporate forecasts or to perform better than initially anticipated,” said the survey.

“This suggests that executives may have already factored these risks into their forecasts and feel confident in their firms abilities to overcome them.”

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