Why Gabon ranks above Nigeria and S.Africa in African Retail Index

by By Trust Matsilele 0

Gabon was rated the best country on AT Kearney’s 2015 African Retail Development Index (ARDI).

The index ranks the top 15 African countries according to market attractiveness for retail expansion.

Gabon’s attractiveness was largely driven by a strong demographic dividend as the economy enjoys a strong middle class.

The other countries making it in the top five include: Botswana at number two, Angola ranks third, Nigeria fourth and Tanzania fifth.

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According to the report, Gabon, the ARDI’s top-ranked market and home to Sub-Saharan Africa’s highest GDP per capita is a mid-sized and fast-growing country which is a suitable market for retail sector.

The report says Botswana’s ranking was informed by its resource rich minerals and a growing middle class.

The index identifies three distinct differences in stages of retail advancement in the Top 15 countries—basic, developing, and mature—with only Southern Africa falling into the mature bracket.

Mirko Warschun, AT Kearney partner and leader of the firm’s consumer industries and retail practice for Europe, Middle East, and Africa, noted that South Africa which was ranked sixth moved up the index, despite market saturation and sluggish economic growth.

“If scale is not your biggest worry, South Africa—and the other mature markets, Botswana and Namibia—remain solid points of entry, with established shopping cultures, relatively high wealth levels, and well-established infrastructure. In these markets it is important to bring a differentiated retail concept.”

Bart Van Dijk, AT Kearney partner and leader of the firm’s consumer industries and retail practice in Africa, said that it was instructive to think of Africa as a set of opportunities that can be augmented and added onto one another, rather than just one singular opportunity.

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“How you pick among the opportunities depends on your offering,” he said. “Retailers with a basic offering should target the large cities and countries because scale will be important, while retailers with a wider assortment should target higher average income countries including the smaller ones.”