By Frost & Sullivan's Chemicals Materials and Food (CMF) Research Analysts, Dr Richard Orendo Smith and Linda Ganyeka
Africa is a continent of 54 countries; including the addition of the newly formed South Sudan in 2011. In 2010, the urban population was estimated at 413 million inhabitants, or 40% of the total African population; making Africa more urbanised than India yet less so than China. Analysts predict that by 2030, more Africans will be residing in urban areas for the first time in the continent's history. However, by 2050, this number is projected to approximate 1.2 billion; representing almost 60% of the total population. Currently, the continent has 52 cities with more than one million inhabitants. This number is expected to grow to 75 cities in the future, writes CMF Research Analyst Richard Orendo Smith at Frost & Sullivan, global growth consulting firm.
Many financial institutions, such as The African Development Bank (AfDB), Goldman Sachs, IMF, World Bank believe that Africa is the place to invest; and rightly so, because of the significant opportunities it presents. Africa is the fastest growing region after Asia, with better return on investments compared to most developed countries in Europe or the US. According to a recent World Bank report, Sub Saharan Africa's (SSA's) annual GDP growth is projected at 5.8% (excluding South Africa). However, most of the growth recorded, emanates from mining and oil and gas. Overall, there are very few manufacturing activities that are currently taking place in Africa. Other countries with an emerging manufacturing sector, however, include Egypt, Algeria and Morocco; South Africa; Nigeria, Ghana and Kenya. Consequently, foreign investors are attracted to infrastructure development projects, mining, oil and gas exploration and production, banking and agriculture. The rising consumer market also offers opportunity for investment, mainly driven by rising economic growth across Africa (Figure 1) and subsequently an increased middle-income class population. According to The African Development Bank (AfDB), Africa's middle-income class had grown to 313 million people in 2010, or 34% of the continent's population, compared to 151 million in 1990.