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Africa`s Market Potential

How Big is Africa`s Market Pontential? Its vast uncultivated croplands an opportunity beyond imagination.
by

Blessmore Dube

on 28 September 2013

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Transcript of Africa`s Market Potential

Africa`s Economy
Africa’s economy is growing faster than the economies of all other continents.
About a third of the 54 African countries are seeing annual GDP growth of more than 6%.
But this is not just about diamonds and oil
Only 24% of the growth from 2000 to 2008 was attributable to natural resources.
Africa in Size
The to-scale map at right shows just how massive Africa is
It has 52 cities with populations of one million or more—the same number western Europe has.
The percentage of people living in cities is higher than in India and will reach 50% by 2030.
Africa’s middle class is also bigger than India’s, and by 2020 half of African households will have discretionary spending power.
Africa needs everything—infrastructure, education, health care, consumer goods, and retail—and can pay for it

Debt and inflation have decreased significantly over the past decade, because governments across Africa are now widely aligned with market economics.
The number of political coups has declined precipitously since 1990. Though moving at different paces across the continent, political reform is under way,
Polity IV Index (a 21-point democracy rating in which hereditary monarchies score a -10 and consolidated democracies a +10).

IT'S INCREASINGLY STABLE
CEO views on Africa`s Agriculture
Africa`s 5 Active Trading Blocks
Africa Workforce
Increase by 163 million in this decade 2035 it will be bigger than China’s
By 2050 Africans will account for 25% of the world’s workers
What’s more, those workers will be supporting fewer dependents than their peers elsewhere in the world will.
However, deep investments in productivity improvements will be needed to ensure broad-based growth in the region

Africa`s Population Working age 16-64yrs

Millions
Education expenditure
OECD governments spend (11%) on average
Africa spent 20% twice of OECD
Primary school enrollment reached 76% in 2008, up 14 points in a decade
Secondary school enrollment is still low, 35%, but it, too, grew, by 10 points.
Achievement levels have not yet caught up to spending, though there are some success stories—math and science students in Ghana and Tunisia were among the world’s most improved in the 2000s.

Agricultural Land
Natural resources are not the whole story, but they’re a catalyst.
With 60% of the world’s potential farmland, Africa could become an agricultural powerhouse.
It is also rich in oil and gas; finds in Mozambique, Tanzania, and Uganda alone are expected to attract more than $40 billion in foreign investment.
But companies that pursue pure extraction can’t sustain support in Africa.
Those that build local supply chains, hire local people, and produce for the local market are more likely to win the day.
Agriculture Cropland 2009
Million Hectares
polity IV index Africa average
Export Diversification by main region 1995-2011
Trade
Africa’s Agriculture and Agribusiness
Agriculture and agribusiness together are projected to be a US$ 1 trillion industry in Sub-Saharan Africa (SSA) by 2030 (compared to US$ 313 billion in 2010), and they should be at the top of the agenda for economic transformation and development.

Source: World Bank Report 2013
Akin Adesina,
Nigerian Minister of Agriculture, (2013)
"agriculture is not a development activity, it is an industry."

Dr Strive Masiyiwa
, Econet Wireless Founder (2013)
"agriculture possesses as much potential for entrepreneurship expression, as telecommunications, or mining. If I were a young person, starting out in business today, I would seriously consider agriculture"

Makhtar Diop
, World Bank Vice President for Africa Region (2013)
"the time has come for making African agriculture and agribusiness a catalyst for ending poverty,”


Jamal Saghir
, World Bank Director for Sustainable Development in the Africa Region (2013)
“Improving Africa’s agriculture and agribusiness sectors means higher incomes and more jobs. It also allows Africa to compete globally.

Bill Gates and Mellinda Gates
Foundation (2013)
"Our Agriculture goal is to help these farming families produce more food and increase their income, while preserving the land for future generations"

Jim Rogers
, chairman of Singapore-based Rogers Holdings (2013)
"who predicted the start of the global commodities rally in 1996“I have frequently told people that one of the best investments in the world will be farmland,”
Africa

Africa`s Boom
What’s making this diverse and complex continent boom?
Just 11% of Africa’s trade takes place within its own borders, the lowest of any region.
Politics and resource constraints in Africa have kept the continent fractured
BUT, a new crop of competitive pan-African companies and leaders are changing that equation
Increasingly skilled trade ministers and corporate executives are promoting free trade across and within Africa’s five major trade block
The Mobile Industry
Employed 3.6 million full-time workers directly and indirectly in Africa in 2010.
Mobile penetration, which was 2% in 2000, is 78% today and will reach 84% by 2015.
Operators across the continent reduced prices by 18%, on average, in 2011.
Mobile internet traffic in sub-Saharan Africa will grow 25-fold in the next four years.


Mobile penetration
Education spending as % of total Budget

No. of Coups
Education is the crucial factor that will determine whether the rapidly expanding workforce is a benefit or pitfall
Smartphones are only 3% of the African market today and will be just 15% in 2015.
capital,
electricity,
better technology
irrigated land to grow high-value nutritious food
But farmers need better access to more:
Africa has more than half of the world’s fertile yet unused land
Africa`s Global Leaders
De Beers
Dangote Group
Akinwumi Adesina
OABD
Glencore
Econet
Shanduka Group
ARM
Famfa Oil
Maka Angola
CelTel
Source: Success in Africa 2013
Source: Success In Africa 2013
Source :Success in Africa 2013
Source: World bank 2013
Source: Success in Africa 2013
Source: Success in Africa 2013
Source : TechCentral 2012
Source : Success in Africa 2013
Source: Success in Africa 2013
References :

Berman, J .(2013) Success in Africa: CEO Insights from a Continent on the Rise and a senior adviser at the strategy firm Dalberg. Twitter: @jonathan_berman
World Bank Report (2013)
McKinsey Global Institute (2010) Lions on the Move: Progress and Potentail of African Economies
Mo Ibrhahim Foundation (2012) African Youth: Fulfilling the Potential
Krause, K (2013) Map Graphics on Africa
Annual Development Effectivess Review (2013)
African Development Bank (2011)
TechCentral (2012)
African Mobile Observatory (2011)
Sub-Sahara Africa Mobile Observatory (2012)
World Bank (2013)Growing Africa Unlocking the Potential of Agribusiness
Collier, P. (2010) The Plundered Planet: Why We Must — and How We Can — Manage Nature for Global Prosperity, Oxford University Press

Investing In Africa`s Green Business
More than 1 billion people are starving today


Food production will have to increase by more than 50% just to provide for the basic needs of the global population predicted for 2050.

This will place significant demands on the farming sector
Agricultural prices are anticipated to rise significantly over the coming decades It is happening already
In 2009 alone, the average price of agricultural products rose by 11.9%, while average inflation in Europe was only around 2%. Investors in cash, stocks, and bonds made just 3% return (The Economist, January, 2010). That is why green investments are not only ethical and socially responsible but also hugely attractive.

Green investments, destined to make a higher, longer, and more sustainable return on investment than traditional stocks and bonds

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Africa contains most of worlds uncultivated croplands
Mobile use is fast exploding
Governments spends 20% on Education
Soon to have world`s largest workforce
Infra-Africa trade in its infancy
Its Increasingly stable
Its a huge market potential
Crowburg Pvt Ltd
GI- Guarantees and Forecasts
The time is right to invest in green business

Interest rates are at historically low levels
Vast majority of big corporations are struggling to make their anticipated profits
In the current market, most start-ups will fail to meet their commercial targets

They have the best guarantees and forecasts
In short, there has never been a better time to make a green investment.
Full transcript