When preparing for you African business or investment, the right market selection is a crucial factor for your success. Watch my training video on ‘How To Select The Right Markets in Africa’. Today, I want to make you aware of five compelling markets you should not overlook, because they are all marching ahead on a clear upward trend.
A lot of buzz is currently going around in regards to Ethiopia as one of Africa’s top markets. And here is what has been stirring the excitement: While several markets in the world and Africa faced an economic slowdown, Ethiopia has continued to grow at around 8.5 % in 2015 making it Africa’s fastest growing economy. In fact, let me top this up for you: According to the World Bank 2015 Ethiopia is now the WORLD’s fastest growing economy and you will feel the pace when you step into the country’s urban areas!
The opportunities are immense, because the market is widely underdeveloped yet belongs to the most populated in Africa, which means that demand for new goods and services is big and will grow fast. However, Ethiopia is by and large still a closed economy, which can make market entry and expansion difficult and costly for you.
Ivory Coast is one of West Africa’s upcoming markets and it is no surprise that it makes it onto place 3 in Africa and place six worldwide for fastest growing economies. The government is working hard on improving its business and investment climate and in this context a lot of privatisation efforts have taken place. Doing business in Ivory Coast is not easy and it is French speaking – two factors you need to consider as possible challenges. Having said that it is among the top 5 countries worldwide this year that introduced reforms to make doing business easier, which is a good sign. With Ghana next door and Lagos Port (Nigeria) not far off, it also makes perfect positioning for the production of fast-moving consumer goods that you could sell at regional level.
Rwanda is simply a market that continues to have the most conducive business climate in Africa and that goes a long way, especially when you are a first market entrant into Africa or you are starting with little capital in hand . Business registration is among the fastest in the world and there are no particular entry barriers for foreigners in this regard. Corruption and security risks are among the lowest on the continent and Rwanda’s public servants are amazingly efficient. The small market size of Rwanda can be a down-side, especially for larger companies. Having said that the country’s positioning with the East African Community to the East and the large untapped market of the DRC to the West make extremely good strategic positioning.
Tunisia is another relatively small market that is growing in popularity and which you should not overlook. Governance is greatly improving, the country is opening up to investors, and it is among the top 5 of countries for ease of doing business on the continent, making it to the top among the North African markets, which are visibly bouncing back. With immediate proximity to Europe it makes an ideal market for the manufacturing of goods for Western consumers.
Tanzania is yet another compelling market that is in my view still widely overlooked. It is a large and greatly populated market – larger than Kenya – with direct port access and immense potential for business development because compared to power house Kenya next door it is still relatively underdeveloped. According to the Mo Ibrahim Index, Tanzania ranks 18th in Africa and 4th out of the 13 countries in its geographical region for good governance, which is another strong point.
But here is what is even more compelling: According to the World Bank, Tanzania’s capital Dar-Es-Salaam will be the fastest growing city in Africa in the period 2010-2025. Considering it is competing with power cities such as Nairobi, Lagos, Addis Ababa, Luanda, and Kinshasa out there – this is an intriguing position to be in and a clear indicator that the opportunities Tanzania provides are immense, immediate, and that they have been widely underestimated.
Time for you to step in!