The slide of the month January showed that Western Africa is a very active region for hotel development. The rise of the construction sector also drives the need of interior design and sanitary products. Two third of the total Nigerian turnover in sanitary products come from retail business. Only one third of the products are sold in construction projects such as hotels or office buildings. Whereas, when it comes to high-end class, the ratio changes and project business dominates the selling of sanitary and interior decor. Key to success in Nigeria is the identification of key players.
The segmentation of the Nigerian market illustrated by the sanitary sector is typical for Africa. Small distributors and unofficial markets dominate. Still, africon sees an opportunity for large contracts in high-end projects. A successful market entry must cover the whole distribution chain.
“The GABF aims at bringing together shrewd entrepreneurs, key opinion leaders and social influencers, CEO’s and selected politicians and non-governmental organisations to develop fresh commercial and social concepts that shape business, as well as economic thought and institutions.” (GABF)
The German-Africa Business Forum is a one-day event enabling exchange between German and African business communities. New potentials for cooperation can be identified during these days but also the interaction between economic, political and social development is discussed. Side by side with African and German politicians and businessmen Marc-Peter Zander, CEO of africon, will be speaking about opportunities of investment in Africa and share his experiences from the private sector.
The GABF will take place on the 23rd of March in the Adlon Kempinski Hotel in Berlin.
Some African countries are known for its dynamic tourism such as Kenya and Tanzania, Namibia, Botswana and South Africa. Idyllic pictures of Safari-tourists can be drawn out of this imagination. However, the hotel industry that is also linked to business travelling is the most prospering in Western Africa. The first slide of the month in 2017 indicates that 45% of the African new hotel rooms were built in Western Africa. Also, in Nigeria more than 10.000 hotel rooms were planned in 2016, that is more than in any other African country. Angola and Kenya also show an interesting number of 3.000 to 8.000 rooms planned in 2016.
Thus, africon sees interesting potentials in the construction and interior furnishing sector. German companies can profit from the African construction boom as much in providing services as in selling sanitary equipment, furniture and floor covering.
The slide of the month October shows that more and more steel is used on the African continent while steel production does not increase significantly. This gap must be disserved by imports but it also indicates interesting investment possibilities for the steel processing industry. Seeing the need of steel increasing, we can also resume that construction is going up since 2005.
The slide of the month September, which was created during a large IAM automotive and off-highway project, shows a drastic decrease of construction machinery imports to Nigeria since 2014. Close to the last presented slide about vehicle inflow to Nigeria, statistics show an important downwards trend of the automotive sector in general. The number of imports of construction machinery decreased by 65% between 2013 and 2015. A positive change is not foreseen for the ongoing year.
However, africon predicts a large market for spare parts in construction soon, before new sales will rise in 2018. Investors might find interesting potentials in this area while detailed analysis of the formal and informal markets as much as insights into local dynamics are recommended.
With the upcoming interst in Nigeria of various OEM and after market companies, africon GmbH did a comprehensive study on the Nigerian automitive market with focus on OEM production but also on the local spare parts markets.
One of the key findings has been that the vehicle inflows to Nigeria have dropped significantly due to lack of FOREX but also due to implemented taxes for vehicles. Our recommendation for aftermarket companies:
1. Evaluate the informal markets in Nigeria very closely as “official” companies are hadly present
2. Find a way of taking influence directly in the market by contacts to local players
3. Educate the market on the benefit of buying genuine parts as fakes are dominent in Nigeria
For more information please do not hesitate to contact us on email@example.com.
The slide of the month July shows continuous growth of more than 20% in payment cards for Nigeria. At the moment the total market has got about 42 million cards according to various sources. The major share of payment cards in Nigeria are debit cards with almost 98%. Credit cards have not been popular in the market. Verve, a national payment scheme still holds the strongest position however with sincere competition from Mastercard. The bank with the most cards in the market is First Bank, followed by UBA and Ecobank.
At the moment the following trends can be observed:
- Strong marketing activities to push China Union Products to come by end of 2016
- Mobile solutions on the rise with payment cards being a commodity product
- Growth in agent networks resulting in the need for more solutions
Over the past 2 years africon has developed a strong understanding of the Nigerian payment cards market and would be happy to answer all questions on firstname.lastname@example.org.
The slide of the month June shows a continuous growth of more than 7% in steel consumption in Africa. This offers great opportunities to steel trading companies, companies who supply equipment to steel companies and most importantly it shows the growth on infrastructure in Africa. The largest markets are South Africa, Nigeria and Kenya in Sub-Saharan Africa. africon GmbH has been working lately with focus on the steel industry and should you have questions on the markets in Africa please do not hesitate to contact us.
The African market for laboratory equipment has been playing a small role globally with only 2%. However, it is set for growth with more than 8% in 2015 and imports of more than $1,4bn. The greatest chances for companies supplying medical equipment are still in South Africa besides the north African countries. Also Nigeria is growing strongly with over 8,4% and imports of over 70m worth of medical equipment in 2015. It is estimated that Nigeria will be one of the key markets in future and we strongly recommend to have a closer look at Nigeria at the moment besides diffucult times.
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