East Africa and Nigeria Driving African Economic Growth

Fast growing African GDP set to outperform developed First World countries

Whilst the rest of the world struggles through difficult economic times, the outlook for Africa is positive and optimistic, says leading professional services provider Deloitte.

This was one of the valuable insights presented, at a Deloitte Western Cape event in Stellenbosch recently, to local business owners, exploring the potential of expanding their businesses into the continent. The information was based on the outputs of an extensive research project by Deloitte Consulting’s Professor Roger George and Dr Jacqueline Chimhanzi.

Boosted by the free trade zone in the Eastern African bloc countries of Kenya, Tanzania and Uganda and the rich oil reserves of Nigeria and Angola in the West, economic growth on the African continent is expected to buck international trends by returning, in some markets, between 7 and 10% GDP growth over the next five years. In stark contrast, the rest of the developed world can expect no more than a two percent growth margin.

Even Zimbabwe, is highly rated by George, who foresees immense potential in that country. “Many people would disagree with me based on the current political, social and economic climate in Zimbabwe but I believe in the country’s ability to rebound as it has the fundamentals in place and an educated, hardworking population with a can-do attitude,” said Professor George.

He said that although African markets can be brutal, they offer some of the most viable and sustainable economic growth – this illustrating the need to manage well the risk/reward relationship.

Africa is currently experiencing an expanding middle class and this, in turn, is driving the demand for goods and consumer-facing services such as telecoms.  The African telecoms market is the fastest growing in the world and mobile telephony has spurred the growth of mobile banking.  Africa has in fact technologically leap-frogged, as the vast majority of the population has gone from not having a landline phone at all to owning a cellphone.

Deloitte’s Africa research is billed as the most comprehensive, detailed risk analysis of the African continent, from a business investment perspective, as it takes into consideration   important intangibles such as local culture.

Deloitte Western Cape Regional Leader, Bruce Fannin said, “We are extremely proud to be able to offer our clients the most comprehensive information available to help them achieve their African business expansion goals. The work done by Professor George and Dr Chimanzi is truly remarkable for its in-depth analysis and gives us an edge in the marketplace.”

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Lana-Jane Pike

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