Slide of the month (SOTM) December. Automotive market in Uganda

The automotive aftermarket is one of the key sectors of opportunities in Africa – not just for Germany, but for many global automotive nations as well. However, many international automotive firms face challenges when doing business in Africa as markets function differently compared to other parts of the world – and within Africa itself. The typical route to market is one example: while consumers in markets like Nigeria tend to buy parts from retailers, consumers in some East African countries – like Uganda here – tend to go for the more convenient option of buying from workshops directly. This changes dynamics in decision making, of which automotive suppliers need to be aware to efficiently position their brands in the market.  

Slide of the month (SOTM) November. Chemicals application sectors in Nigeria

Africa‘s chemical industries have experienced enormous growth over the past decades. Though at a smaller scale, various markets in Africa offer substantial market opportunities for global chemical companies. One of them is our client for this project.  

Taking a certain set of chemicals in our client‘s portfolio, the project objective was to identify the most interesting countries on the continent, as well as the key application industries and important potential customers. After a targeted industry analysis across various countries, africon was able to provide a detailed market sizing and competitive analysis, leading to a comprehensive prioritization of countries and industries, along with recommended routes to market.  

Despite being hampered by its recent recession, the Nigerian market partially shown here emerged as an important country on the list, even though countries like Egypt and Kenya currently rank partially significantly higher than Africa‘s giant“.  

Slide of the month (SOTM) October. Construction sector performance in South Africa

South Africa’s construction sector is one of the largest in Africa and currently worth about 15 billion USD while contributing 4% to the country’s GDP. Unfortunately, it has been in recession since 2017. The overall growth rate in the past decade has been relatively low at only 2.47%.

A struggling economy and a 12% reduction in spending on infrastructure by the government have negatively affected the sector, and even in the current year 2019, some players report that business is shrinking further.

africon completed a local research project in this sector, which was aimed at achieving a detailled market understanding as well as identifying suitable business partners in South Africa for our client.

Despite the current situation, a short to medium term upturn is likely as there are still many planned projects. Additionally, the government has recently established a 27.5 billion USD infrastructure fund and targets infrastructure spending of 59 billion USD over the next 3 years.

Slide of the month (SOTM) September. Consumer goods distributors in Ethiopia

The impressive growth of Ethiopia over the past decade has put the country on the map in the consumer goods business. In this project, africon identified and recommended potential distribution partners for the client locally. After meeting approximately 20 consumer goods distributors, africon rated and ranked the firms according to key performance indicators previously agreed upon with our client.

Even though East Africa Holding did not make it to the shortlist of the most interesting potential partners, africon was impressed by the company’s strong local networks and standing in the market. Its focus on own manufactured goods provide a strong asset in times of Ethiopia’s forex crisis – even though it (at least presently) reduces the company’s priority on imported foreign brands.

If you would like to know more about consumer goods and FCMG in Ethiopia or other parts in Africa, do not hesitate to get in touch with our team.

Slide of the month (SOTM) August. Real estate projects in South Africa

The real estate industry in South Africa has been growing steadily in the last few years. Looking at the industry’s three main segments, i.e. residential, commercial, and additions/alterations, it is apparent that South Africa´s residential developments have increased the most in value, at a growth rate of 11.37% between 2015 and 2018. Similarly, additions and alterations have increased at a growth rate of 7.92% in the same period. The growth in these two segments can be accredited to the country’s growing urban population.

Although commercial projects are the second largest in South Africa’s real estate industry, there has been a decline between 2017 and 2018. Commercial projects increased in value from 1.15 billion USD in 2015 to 1.8 billion USD in 2017 and declined to 1.3 billion USD in the year 2018, making this the slowest growing segment in the last few years. The main reason for this decline is the current economic performance of the country which is currently quite low after recovering from a recession in the year 2017.

For more questions and comments, do not hesitate to contact us.

Slide of the month (SOTM) July. Africa’s top imports in 2018

There are numerous business opportunities and potentials that exist in Africa which companies can take advantage of. With our sole focus on the continent, we have looked into the African markets to see what sort of products are mostly imported in each market. For the past year 2018 we were able to come up with the following findings.

Over the last five years, Africa has been recording trade deficits. Data trends show that imports to and exports from Africa started increasing in 2017 after a decline in 2015. China, France, USA, Germany, and India have remained Africa’s top export partners over these years.

In 2018, Africa’s total imports were worth approximately 549 billion USD. The largest imported product (using the 4-digit category) was petroleum and mineral oils which was valued at approximately 60 billion USD – that is 11% of Africa’s total imports in that year.

The other top products imported by Africa are: Motor cars for persons (worth 17 billion USD), medicaments (worth 11.4 billion USD), telephone sets (worth 11.2 billion USD), wheat (worth 10.6 billion USD), motor vehicles for the transport of goods (worth 6.3 billion USD), rice (worth 6.3 billion USD), and parts & accessories for motor vehicles (worth 6.1 billion USD).

The largest importers on the continent are: South Africa (imports worth 93 billion USD i.e. 17% of Africa’s total imports), Egypt (imports worth 81 billion USD i.e. 14.8% of Africa’s total imports), Morocco (imports worth 51 billion USD i.e. 9.3% of Africa’s total imports), Algeria (imports worth 47 billion USD i.e. 8.6% of Africa’s total imports), Nigeria (imports worth 36 billion USD i.e. 6.6% of Africa’s total imports), Tunisia (imports worth 20 billion USD i.e. 3.7% of Africa’s total imports), Kenya (imports worth 16 billion USD i.e. 2.9% of Africa’s total imports) and Ghana (imports worth 12 billion USD i.e. 2.2% of Africa’s total imports).

In South Africa, the top three import categories excluding petroleum and mineral oils are: Motor cars, telephone sets, and medicaments. For Egypt, they are: Motor cars, wheat and meslin, and telephone sets. Nigeria’s other top imports are: Light-vessels fire-floats etc, wheat and meslin, and motor cars, while in Kenya, the other top imports are: Motor cars, medicaments, and flat iron.

Slide of the month (SOTM) June. Plastic film imports in Nigeria

The growth of plastic film imports over the past ten years is a demonstration of the increased adoption of plastic film packaging in Nigeria. Along with the growth in usage of plastic films comes a vast variety of opportunities related products and services – from raw materials to mechanical engineering. 

Polyethylene (PE) film is by far the most popular plastic film material used in Nigeria due to its versatility and wide areas of application. 

If you would like to know more about the plastic film industry in Nigeria, how to access this market, or who the right local partners and  customers are, do not hesitate to get in touch with us.

Slide of the month (SOTM) May. The aftermarket for commercial vehicles in South Africa

Being Africa´s most developed country, the automotive aftermarket in South Africa presents itself with its unique profile, own challenges and opportunities: South Africa is one of the very few African countries with a relatively strong base of local automotive parts manufacturers. A vast variety of international brands have long set up shop, some established their own offices and warehouses. The local motor vehicle fleet of more than ten million is one of Africa´s biggest but has recently only grown very slowly. Together with a sluggish economy, the parts market has become relatively competitive with firms fighting hard for market shares.

The already existing volumes, together with a market that – in a global comparison – still has space for significant growth, open interesting opportunities for international firms.

Get in touch if you would like to know more about opportunities in Africa´s automotive aftermarkets!

Slide of the month (SOTM) April. Ghana’s aluminium fabrication market

The overall market for aluminium profiles in Ghana is split into three price/quality segments: Firstly, premium profiles are used in large high rise and complex construction projects, which are shaping the skylines of Accra and other cities in Ghana. This segment represents around 19% of the total market volume and is served by so called “International Fabricators” and “Niche Fabricators”. On the opposite side of the spectrum, “Retail Fabricators” serve around 50% of the market demand with relatively lower price/quality profiles. These profiles are used in common housing construction and for smaller commercial buildings. In between these two segments is the medium price/quality segment, which represents around 31% of the market. Profiles in this segment are used in a variety of residential and commercial construction projects.

Overall, the aluminium profiles market in Ghana has a pyramid shape, with a large budget and a relatively smaller but still significant premium segment. As for other building materials, especially the premium segment holds interesting opportunities for firms from Europe and elsewhere.

If you would like to know more about how your market in Ghana looks, how to access this market, who the right local partners and the customers are, do not hesitate to get in touch.

Slide of the month (SOTM) March. Kenya’s construction and real estate sector

africon GmbH was contracted by one of our clients and we successfully conducted a research on the aluminium industry in Kenya. We found out that the key drivers of this industry are the construction and real estate sectors in Kenya. Findings revealed that these sectors have experienced positive growth rates within the last five years and are expected to expand even further.

Kenya’s construction sector expanded by 8.6% and contributed approximately 6% to the country’s GDP in 2017. It is also one of the major sectors attracting foreign investors to the country. 

According to Deloitte’s construction trends report, Kenya has remained the leading country with the highest number of projects in East Africa for four consecutive years, with projects increasing by 78% from 23 projects in 2017 to 41 projects worth $38.2 billion in 2018. The major construction projects are in real estate, energy and power, and transport, sources also reveal that the Kenyan government is spending billions of dollars on transport projects as Kenya is expected to become the logistics hub of East Africa.

Challenges to this Kenya’s construction sector include: the frequent use of substandard materials, long procurement procedures, low project completion rates, and low technological knowledge. Despite these apparent challenges, continuous growth is expected in the sector as the Kenyan government plans to build 500,000 houses by 2022, and also to reduce corporate tax for developers who construct at least 400 units per year.

Kenya’s real estate sector is the 6th largest contributor to Kenya’s GDP, and was valued at $5.5 billion in 2017. The sector expanded by 6.1% in 2017 compared to 8.8% in 2016, and this slowed growth rate is due to the elections and reduced credit supply (as a result of capped interest rates). The construction of new private residential buildings in Nairobi increased from 9,054 in 2015 to 10,002 in 2016, while new public residential buildings rose from 45 in 2015 to 1,062 in 2016. Some of the challenges faced by Kenya’s real estate sector include inadequate sources of funding, high land costs, and infrastructure development costs. However, government initiatives such as digitization of the land ministry, removal of land search fees, and inclusion of affordable housing as part of Kenya’s big four agenda is likely to boost real estate development over the next few years

For more information, check out our other slides of the month and do not hesitate to contact us.