Economic Overview
Africa has traditionally depended on agriculture to sustain its economy. The continent, as a whole, has maintained consistent high growth rates in the past decade. Metropolitan areas show promise for international investments, and many of Africa’s independent states are developing and implementing strategies that would open up new possibilities for United States companies wishing to export products to Africa. Companies selling and distributing food and beverages, nutritional, and cosmetic and beauty products–with strategic targeted-marketing and product development–will see increased success in the African market.
Africa’s population, at approximately 1.1 billion, makes up 15% of the global population. Africa’s population is made up of predominantly younger generations. Most of Africa’s demographic is under the age of 50, so products geared toward a younger audience will have greater success rates. More than half the population is under 25 years old, so any US products and campaigns could be targeted to the local demographics to optimize sales. Investors should recognize African cultural practices as well as the need for increased health-benefiting products to fit the agrarian preferences of African consumers.
Agriculture is the major contributor to the continent’s GDP, employing the majority of the population. Projections for African market growth are positive, as many of its countries are developing and implementing strategies that promise to increase economic stability through infrastructural changes in transportation, storage, and import/export standards.
Growth rates in Africa vary per country. The highest growth rates range between 5-6% annual increases and is projected to increase by 6.6% in 2017. Consequently, consumer price inflation (CPI) has decreased from 14% in 2011 to 6.9% in 2014. Additionally, poverty has decreased between 5-11%, allowing for expanded market spending and trade.
An increase in trade has led many African nations to alter the standards and process required of goods exported to Africa. Each country has slightly different policies, but most will require a minimum of Certificate of Conformity to get through customs. All African countries follow international best practices in addition to any country-specific requirements set by national organizations.
Many independent states in Africa are focusing on the future to ensure the success of development strategies, especially those aimed at temperature-controlled storage and transportation. Recent and upcoming developments pave the way for a simpler and more profitable export opportunities for United States businesses. African countries that have made such globally-recognized infrastructural improvements in the last five years to enhance the regional, national, and global marketplace include: Kenya, Botswana, and Nigeria.
Infrastructural changes in Africa may also affect the future of exports from the US. The implementation of effective cold chains, for instance—in addition to continued market increase and stabilization—will increase food and beverages, nutritional products, and cosmetics and beauty market opportunities to arid African regions. With all of the alterations being made to the continent’s infrastructure and with each country having its individual distinctions and regulations for trade, international companies seeking to invest in African exports should closely monitor and evaluate the progression of regulations and protocol.
With the increase in urbanization, healthcare access, and wages, the demand for food and beverages, cosmetics, and nutritional products is likely to rise, making it an enticing export option for US companies distributing and selling these goods. Since such widespread improvement takes time, companies should continue monitoring the market trends and changes regularly after investment to ensure that exports and sales meet and exceed their highest expectations.
