Slide of the month (SOTM) September. The Nigerian rail industry

Africa’s booming population is creating vast opportunities, including significant demand for robust infrastructure. Consequent to this development, governments of many African countries have become more intentional about investing in improving and diversifying transport infrastructure. One of the most conspicuous areas is the railway sector, which has attracted many global players who seek to benefit from the emerging opportunities.

As experts on Africa business development, africon was consulted by a notable global leader in rail components manufacturing to explicate the existing rail system operations and current or future business opportunities in Nigeria. To get the best insights and evaluate the progress so far, we visited numerous railway sites with operating lines and ongoing construction projects across Nigeria. We also conducted targeted interviews with relevant stakeholders in the railway system.

As a result, africon was able to create a clear picture of the Nigerian railway system for our client. Our data included a view of the country’s historical railway development, key influencers in the sector, mapping of existing and planned rail lines across the country (drawn from the railway master plan), analysis of budgets, financing and expenditure trends, analysis of rolling stock fleet in detail, equipment, components demand as well as long-term demand projections. In addition, we looked closer into the system’s challenges and potential gaps that foreign players could potentially fill. Most importantly, africon charted the most effective route-to-market strategy for our client to be very competitive and well established in the market. We also identified reliable local partners for them to work with to achieve this even faster.

Overall, the railway system in Nigeria is gaining traction with a lot more attention and investments from the government. There are many ongoing and upcoming rail lines in the country. Though the Chinese firm’s interests are well represented, the Nigerian Railway Corporation and Federal Ministry of Transportation state that they are open and welcoming to more foreign suppliers and investors interested in the country’s railway business.

If you have any questions or concerns, you can contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) August. The Nigerian automotive industry

Slide of the month (SOTM) July. The age of vehicles in operation in Nigeria

Slide of the month (SOTM) June. Labtech imports in East Africa

Slide of the month (SOTM) May: The logistics sector in Rwanda and Ethiopia

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

 

Slide of the month (SOTM) August. The Nigerian automotive industry

The Nigerian automotive industry stands out compared to other African automotive industries – in almost every way, sometimes positively, sometimes negatively. The country is home to one of the largest vehicle parks on the continent with nearly 12 million units – around six times Kenya’s fleet. On the other hand, the country’s automotive industry is, in large parts, significantly more informal than that of peers such as South Africa and Egypt. This circumstance makes it a very challenging place to do business for many international automotive firms. However, the potential rewards for those succeeding in it are enormous.

We have completed many private sector projects in this space, including the latest one for a large multilateral organization. africon interviewed executives from more than 60 companies and conducted multiple surveys locally to identify funding/ engagement opportunities for the client.

Local manufacturing of both vehicles and components in Nigeria is presently in many areas complicated due to insufficient or poorly implemented regulation. However, some segments of the industry enjoy more favorable conditions, allowing for growing local manufacturing activity. The deciding factor is most often protection from cheap imports. Luckily, large parts of the market want a “natural” level of protection: neither domestic parts trade nor various workshops and digital services can effectively be imported. In most cases, local firms reap significant benefits, while international investors often perceive the risk to be too high.

Ultimately, africon presented a list and assessments of approximately 20 expansion projects in Nigeria, with which the client can engage to promote industry growth, job creation, and development. These projects include both local and international firms, early-stage ideas up until ready-to-invest undertakings. We hope to see many of these grow into shining examples of effectively utilized opportunities in Nigeria soon.

If you have any questions or concerns, you can contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) July. The age of vehicles in operation in Nigeria

Slide of the month (SOTM) June. Labtech imports in East Africa

Slide of the month (SOTM) May: The logistics sector in Rwanda and Ethiopia

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

 

 

Slide of the month (SOTM) July. The age of vehicles in operation in Nigeria

While Africa’s automotive market contains great opportunities, numerous international automotive firms face challenges when doing business on the continent. A key reason is the very significant differences in the business environments in Africa, vis-à-vis those in other global markets.

africon recently completed a project on the Nigeria automotive industry, commissioned by a multilateral organization. A critical question that emerged was the age of vehicles in Nigeria. As many large component producers do not provide coverage for cars beyond a certain age, this metric is a crucial market determinant for many international companies. With an average age of 16 years, a large portion of the Nigerian vehicle fleet is “too old.” This highlights the need for holistic data on African markets to sufficiently understand market potentials.

After putting these market forces into consideration, africon provided the client with a comprehensive overview of the market and a list of potential opportunities locally.

If you have any questions or concerns, you can contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) June. Labtech imports in East Africa

Slide of the month (SOTM) May: The logistics sector in Rwanda and Ethiopia

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC)

Slide of the month (SOTM) June. Labtech imports in East Africa

Various markets in Africa offer great possibilities for international medical companies. africon recently completed a multi-country analysis to investigate the opportunities in medical equipment supply for a German manufacturer. A specific question that emerged was on the source of Labtech equipment in Kenya, Tanzania, Uganda, and Rwanda. We found out that Germany was the leading supplier of Labtech products in 2020 for these countries.

Based on these and other findings, we shared the opportunities, insights, and tactical recommendations that would guide entry and sales in the health care market.

If you have any questions or concerns, you can contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) May: The logistics sector in Rwanda and Ethiopia

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC)

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) May. The logistics sector in Rwanda and Ethiopia

Many African countries’ economic growth is highly dependent on international trade. A more efficient logistical system can greatly increase a country’s local economic value and as a result, create jobs and prosperity.

In this project, africon was contracted to analyse the logistics sector in Rwanda and Ethiopia. We aimed to identify the existing gaps and fields where the client, a development cooperation agency, could intervene to improve efficiency, thereby aiding job and wealth creation in these countries. We conducted primary and secondary research simultaneously. While analysing country information and industry reports, over 70 interviews were conducted in these countries with relevant players in the logistics field. These included logistics firms, governmental and regulatory bodies, associations and educational institutions.

Through the results of the research, we identified main challenges in key areas that have significant impact on the logistics sector in Rwanda and Ethiopia. Such areas were, for example, infrastructure, customs procedures, education, and digitalisation. The logistics landscape of both landlocked countries is very contrasting regarding the highlighted areas. Based on our findings, we could derive practical directions for measures to fill present gaps and thus strengthen the sector for the future while creating jobs, fostering private investments and promoting sustainability. All results were consolidated into a comprehensive report which contained tactical recommendations for the client.

If you have any questions about the sector or would like to discuss more, please contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC)

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

 

Slide of the month (SOTM) April. Overview of the tech scene in select countries in Africa

The digital economy in Africa continues to grow with some countries having significant digital infrastructure. Due to our vast experience and project work in Africa, we were recently invited to share relevant insights on the topic, “Opportunities in Africa’s rising digital economy”, at the Global DIGITAL FUTUREcongress Virtual on 25.02.2021.

Our presentation focused on the general growth drivers as well as the opportunities that exist in the thriving internet economy of Africa. We gave an overview of the tech scene on the continent which is an interesting market for German and European companies. One such insight was that Nigeria and Kenya have the largest tech sectors while Rwanda and Ethiopia are growth markets.

We were also able to share more tactical recommendations and insights that would guide prospective entrants into the market.

If you have any questions about the sector or would like to discuss more, please contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC)

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Slide of the month (SOTM) November. The construction industry in Africa

 

Slide of the month (SOTM) March. Operational and upcoming railway lines in Nigeria

Several African countries have ongoing and planned rail projects. Africa’s largest economy is developing the rail sector to improve the poor transport infrastructure. africon recently completed a project in the railway sector in Nigeria for one of our clients who manufactures rail components. The project aimed to give an overview of the industry in terms of ongoing and upcoming projects.

africon spent about 4 months meeting with key local decision-makers and experts in a very challenging market environment. The Nigerian railway network consists of 3,505 km narrow gauge lines and 364 km standard gauge lines. There are several operational lines with multiple ongoing inter-state and light rail projects across major cities in Nigeria. The figure below maps some of the operational lines which we covered in the course of the project. We also provided more invaluable insights & data and gave strategic recommendations about the sector to our client.

Below, you will also find some pictures that our team in Nigeria took.

If you have any questions about the sector or would like to discuss more, please contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC).

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Slide of the month (SOTM) November. The construction industry in Africa

Slide of the month (SOTM) October. The meat & fish sector in Nigeria

 

Slide of the month (SOTM) February. Import statistics of medical equipment in East African Community (EAC).

africon GmbH did an analysis of import statistics of medical equipment in East Africa for one of our clients in the sector. They were interested in understanding the supply and demand of hospital beds.

The findings were that the complex medical equipment market in EAC relies heavily on imports from various countries like China, Germany, and India. Kenya has the region’s biggest market followed by Tanzania and Uganda. According to sources, there also exists local manufacturing of standard hospital beds in EAC member states. However, our local research concluded that operating room beds are imported mostly from China and India due to lower prices from these sources. africon was therefore able to share the size of the market and provide recommendations as well as business connections for the client.

If you have any questions or concerns, you can contact us at info@africon.de

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Slide of the month (SOTM) November. The construction industry in Africa

Slide of the month (SOTM) October. The meat & fish sector in Nigeria

Slide of the month (SOTM) September. The soft drinks market in Kenya

 

Slide of the month (SOTM) January. The market for commercial vehicles in Kenya

Over the last couple of years, africon has implemented a vast range of projects in the automotive sector. Some of the projects have tasked us with analyzing the market for automotive components like filters and spark plugs, among others, for commercial and personal vehicles. We have conducted more than a hundred interviews with senior level industry players, parts distributors and automobile traders in different countries in Africa.

In East Africa, Kenya has been the automotive hub. In the last two and a half years, approximately 33,000 commercial vehicles have been sold in the country. Light- medium trucks are the leading segment in commercial vehicles, accounting for almost 11,000-unit sales over the past 2.5 years. Even though sales have been affected by the coronavirus pandemic, the industry shows positive signs of recovery. Kenya’s commercial vehicle assemblers might have even increased their output in 2020 compared to the previous year. Additionally, the government and stakeholders are still working on positive automotive policy adjustments. The sector in Kenya has space for significant growth, opening interesting opportunities for international firms.

In the project here, africon was able to provide market transparency, in-depth data and strategic recommendations for future sales efforts in the region.

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

Read other related SOTMs

Slide of the month (SOTM) October. Automotive industry in sub-Saharan Africa

Slide of the month (SOTM) June. Automotive Kenya vs. Nigeria

Read previous SOTMs (Slides of the month) here.

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Slide of the month (SOTM) November. The construction industry in Africa

Slide of the month (SOTM) October. The meat & fish sector in Nigeria

Slide of the month (SOTM) September. The soft drinks market in Kenya

Slide of the month (SOTM) August. Steel demand in Africa

 

Slide of the month (SOTM) December. The food, beverage and tobacco manufacturing industry in Nigeria

Prior to the Covid outbreak, manufacturing in Nigeria had been recovering from the 2016 recession, even though the sector still faces various challenges, such as intermittent power supply, infrastructural deficits, forex shortage and Naira devaluation. africon did a market analysis for a European food ingredient manufacturing company interested in understanding the industry in Nigeria. The project aim was to understand potentials in various market segments and to ultimately determine scale and scope of opportunities for our client. Within our research, we found that the food, beverage and tobacco sectors account for 38% of all manufacturing output in Nigeria. We were furthermore able to share the size of the market and identify key players and partners to provide direction for future sales efforts in the region.

If you have any questions or concerns, you can contact us at info@africon.de

Read other SOTMs (Slides of the month) here.

Slide of the month (SOTM) November. The construction industry in Africa

Slide of the month (SOTM) October. The meat & fish sector in Nigeria

Slide of the month (SOTM) September. The soft drinks market in Kenya

Slide of the month (SOTM) August. Steel demand in Africa

Slide of the month (SOTM) July. The future of Africa’s independent automotive aftermarkets