10 Reasons to expand your Business to Africa

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Are you looking to expand your business? Or do you want to invest somewhere? Then what about Africa? Africa is the second populated and largest continent in the world. It is projected that in 2050 it became double. In the past, there were many reasons behind Africa’s low economy, like Illiteracy, religious issues, awareness, etc. In the last few years, Africa is a highly growing continent. After Us and china, Africa is the next focused point of all the international investors because of its rapid growth of GDP as well as untapped but cheap natural resources.

There are some reasons for international entrepreneurs to invest or expand their business to Africa:

Africa is stepping up

For smart and straightforward business solutions, the African continent is on the chop of exponential development, with no end and flourishing entrepreneurship opportunities. In the next 30 years, the African market will exceed a double of 1.2billion person market. From the last 20years, this continent has increasingly transformed, that’s why many corporations or business leaders are trying to underestimate the African’s effectiveness and size. They even seek to overstate market problems in Africa, whereas business in Africa’s market place isn’t easy to do. But companies stressing that Africans valued the initiative and commitment, and Enterprises are not active. One of the 21st century’s significant growth opportunities is risk losing; that’s why the global corporations should look to Africa as Africa is rising day after day.

IT Development and Digital Processing

Since 2019 African latest technology, e-commerce platform listed in the list of NYSE (New York Stock Exchange). Africa already uses mobile financial services, and it has millions (122 M) of active mobile money accounts. Through It and Digital transformation, several businesses are achieving massive success. Companies (such as Olam and Novartis) use mobile contact to reach out to customers and run supply chains or hold them. Digital transactions are actually below 1 percent of overall retail revenues in Africa as relative to 24 percent in China. In the coming years, African GDP will rise to $300 billion, which will enable the development of companies to boost sales, increase productivity, and reach broader markets.

Infrastructure and Connection Required:

In 2035, 10 of the fastest rising cities in the world will become Africa, according to UN predictions. The motivation for development is global, meaning that Africa ‘s infrastructure has to be strengthened in order to capitalize on and supply its goods to others on the globe and ports for export. Highways, railroads, electric grids, airports, seaports and the IT infrastructure required to boost African economies are lacking throughout most of sub-Saharan Africa. Africa’s excellent Technology (IT) industry would definitely lead to this development and design, however outside finance and foreign-owned firms will make a major contribution to this huge development project. The railway lines and roadways are in disrepair and do not Satisfy the strong needs (demands) of African economic development. It offers a tremendous opportunity for foreign investors to contribute to the growth of the intra-continent.

African trade restrictions are going to fall:

Africa own Hugh-trade agreement with the continental free trading community of 54 nations. In Africa, even small economies might experience a boost. In several African countries, Manufacturers might get profits from setting up manufacturing and assembly activities, if opportunities added or implemented, and duties are reduced. It could lead to the growth and improvement in machinery, textile manufacturing, electronics, processed food, and chemicals products. For an initial step, African economic groups could create a big difference through free trading between and with each other. If the consumption-driven markets (economies) and the continent’s commodities continue to generate a wide range of products for home and export markets, then Africa’s global trade share ( 3% which is extremely limited) would rise. If African domestic goods like cotton, coffee, or minerals, are manufactured in the country instead of exported these in original (raw form). It brings an increase in local benefits in the commodities sector may be a source of development and expansion for new business.

Economic growth is speeding up.

Economic development in Africa (Sub-Saharan) grew to 3.1 per cent (2018), which was expected to hit 3.7 per cent (2020). In 2006, African currencies collapsed and steadily declined due to commodity prices, which had a negative effect on the economies of many sub-Saharan countries, but have been recovered by 2.6 per cent over the past few years, and demonstrating that such economies can survive these impacts. The Gross Domestic Product (GDP) of Sub-Saharan Africa accounts for 60% of Angola, South Africa, and Nigeria. A massive trading agreement CFTA (Continental Free Trade Area) with 54 countries is led by South Africa and Angola that can contribute to elevating worst economies of Africa. Africa’s global trade share (3%) will be boosted by the ‘Continental Free Trade Area’ (CFTA) agreement which allowing diversification of products or services for either international or local consumption. It also provides manufacturing of most needed products and is capable of attracting more producers and activities in the field.

Consumers are on the move.

African developing markets create fascinating prospects for multinational companies to invest in distribution and retail. As African middle class is on its development, this development may boost the new expectation and demand, and create an excellent opportunity for global or international inverters to invest in Africa and make it their profit destination. As their young urban consumers (which is 50% of the population of Africa) are well educated, Sophisticated and brand-aware in aspects of their consumption. Their habitual buying is lifestyle, fashion, and home products that are guided and anticipated by retailers. They still realize that if they want to fulfill demand, they require world standard supply chains. The buying power of this community is growing and high and middle-income classes are projected to increase with the economic development of the country. In 2010, consumer’s spending was increase from $600 thousand million dollar (USD), and in 2020 it is projected and predicted 1 thousand billion dollar (USD).

Fast and Upgraded population:

According to the 2020 survey, ‘African population is 1.19 billion; it is approximately 16% of the world population’. It is the 2nd largest and the populated continent of the world. There are two significant factors of urbanization in Africa, healthy population development and rural-urban migration. Urbanization has contributed to the development of major cities with more than 10 million residents. It often affects all forms of towns, from rural villages to cities. When the population increased, or people migrated from villages to the cities, it means the nation is growing or developing. Urbanization increases the employment rate as well as it creates excellent opportunities for business investors to generate profit from their needs. It also increases the literacy rate in the nation, that is the main factor in the growth of any country. In 2015, 200 million Africans joined the consumer products business. This rapidly growing market size needs the active involvement of structural economic transformation of Africa.

Rising Diversification in Africa:

Even in initial phases, African markets and economies are continuing to diversify over and above consumer good. Africa sees a removing back of the immigrant communities that identify and understand its own nations’ possibilities and effectiveness. The national economic development is supported by these immigrants. They put their abilities and expertise to enhance the nations’ profit. They also try to be the first to encourage and invest in his own town and cities. Simultaneously, African countries are starting to invest in heavily competitive areas. They are ready to take the risk to boost their nation to the next level. And they pack to attract a wider range of investors.

Youth important to Africa’s potential improvements:

Youth is the most crucial factor to rise an economy. As Africa is stepping up and increasing day by day. The essential part or edge that Africa holds now and in future is his young workforce because it is necessary to the potential improvements in Africa are young people. As you know, ‘Africa is the second-largest and the most populated continent in the world, and its more than 50% of the population is Youth (under 20 years). For holding this much young workforce, it is known as “World’s Youngest Continent.” According to the Survey 2020, “226 million Youth aged 15-24 lived in Africa in 2020, representing nearly 20% of Africa’s population, making up one-fifth of the world’s youth population.”As Africa has more struggling youth, so it’s easy for Africa to make itself a profit destination all over the world.

Wide nature reserves (green match)

The continent of Africa is extremely abundant in natural and mineral resources. These undiscovered natural gas and oil reservoirs that contain the world’s 10 per cent reserves. They still carry most of the unused or undiscovered hydroelectric capacity. Africa is known as home to a vast array of reserves of diamond, iron, platinum, gold, copper and uranium. Just 10 per cent of natural resources in Africa are actually cultivated, But it still owns nearly 60 per cent of the world’s agricultural land. Africa’s young and skilled population, which is massive but inexpensive, are the opportunities for many investors.

Conclusion:

Africa is growing rapidly. In future, rise in youth population, developed technology, and urban growth in Africa would boost existing needs (demand), and the gaps are attracting businesses opening for African companies. As I mentioned above ‘Africa has more struggling youth, so it’s easy for Africa to make itself a profit destination all over the world.’

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