Africa’s extraction industries have always been at the fore front of attracting foreign investment. However according to a report by Deloitte titled “Africa: A 21st Century View”, that is all changing. Africa’s Gross Domestic Product (GDP) is set to grow by 50 percent over the next 5 years. The rapid growth rate is to be fueled by a rising middle class, injecting new life into the emerging consumer markets.
While Europe struggles with an aging workforce and other high growth economies like India and China show signs of slowing, investors look to Africa as it burgeons on the cusp of a consumer boom.
Mobile subscription penetration is set to grow from 72 percent to 97 percent by 2017 as the continent adds 334 million new Smartphone subscribers over that time-frame. A growing middle class has increased the demand for consumer goods and high end branded items.
Rodger George, advisory leader at Deloitte East Africa, says that Africa is not suffering from a lack of demand, but rather a lack of supply.
Driving innovation and entrepreneurial growth is the predominantly young African population. About 680 million — or 60 percent — of the continent’s total population is below the age of 25.
“Notwithstanding the many infrastructural challenges that Africa faces, Africans have shown they are willing to innovate,” says George. “Africans have leapfrogged poor or no fixed line infrastructure moving straight to mobile, which has seen the fastest growth in the world over the last five years.”
Wide spread democracy and improved mobile money systems have begun to ease the previous barriers and concerns for foreign investment.
Matthew Klynsmith earned a business administration diploma at CTI in Cape Town, South Africa. He now works at Strategic Options as an associate partner. To read more reports from Matthew Klynsmith, Go Here Now.
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