Slide of the month (SOTM) February. Obtaining finance in Côte d’Ivoire

Over the past years, a strong reform drive has helped the Ivory Coast to become one of West Africa’s most interesting markets. Growth rates of consistently more than 7% p.a. make the country a promising target market for suppliers of all kinds of industrial machinery. However, when managing market entry, it is important to not just look for potential partners but to also understand the context. In this case, africon was asked to investigate the topic of “obtaining finance” as a key constraint for potential Ivorian customers of the client. Luckily, conditions on the ground are relatively favourable, making other factors more critical for potential customers locally.

Slide of the month (SOTM) January. Internet speeds across Africa

For an increasingly digital world, fast internet is a key driver of growth. As anywhere else, internet speeds in Africa vary greatly between countries as this slide shows: while for example Madagascar has a download speed of around 32 Mb/s, faster than that of the UK, and countries like Ghana and South Africa have speeds of above 20 Mb/s, others still lag behind.

In the project this slide stems from, a client of africon and digital services company was looking for potential future sourcing locations in Africa. africon analysed indicators such as the above to prioritize countries according to their sourcing potential for the client. Though internet speed was an important determinant, a critical factor was to also consider further KPIs, such as the cost and availability of other means of production. An analysis of a mix of various critical indicators finally led to an East African country being ranked as number one. The next target is now to jointly establish a local presence in this country for the client.

Read other SOTMs (Slides of the month) here.

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

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

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

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

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

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!