Johannesburg, 12 Aug 2011
Although Africa faces high levels of poverty, ailing infrastructure and regulatory uncertainty, the potential for growth in many of its markets is unmatched anywhere else in the world.
This is according to research firm Frost & Sullivan, which notes that Africa's position in the global economy is marked by dramatic contrasts.
Frost & Sullivan this year hosts its inaugural GIL 2011: Africa Summit themed the Global Community of Growth, Innovation and Leadership on 25 August in Cape Town. At the event, the firm will present the findings of its analysis entitled 'Mega Trends in Africa: A bright vision for the growing continent'.
According to Frost & Sullivan, the study incorporates insights from its team of African analysts and highlights the macro-economic forces that will shape the continent's future for the next 10 to 30 years.
Mega trends
The analysts and delegates will examine the study and discuss innovative ways of taking advantage of the opportunities these 'mega trends' present for success in 2020 and beyond.
Three of the nine 'mega trends' discussed in the study are 'connecting the unconnected',
'urbanisation' and 'regional integration'.
The study projects that by 2020, mobile penetration in Africa will have more than doubled from the numbers recorded in 2009. Broadband penetration will increase nearly seven-fold over the same period.
“This spurt in connectivity will generate $200 billion in opportunities for networked sectors by 2020,” says Frost & Sullivan's ICT industry analyst, Vitalis Ozianyi. “ICT will also become a major employer of skilled manpower.”
By 2025, Africa will have 350 million middle class consumers, and the second highest number of city dwellers of any global region, the study also notes. This urbanisation will occur mostly in West Africa, but will offer opportunities to business throughout the continent.
“Urbanisation in Africa will require the development of innovative products to meet the specific needs of the urban poor and wants of an emerging consumer class,” states Frost & Sullivan's healthcare analyst, Ryan Lobban. “These will include low cost housing options and basic infrastructure needs such as transport, power and healthcare. Space will likely become a currency as demand increases in concentrated areas.”
Other knock-on effects of urbanisation will include greater demand for private sector industries such as banking and telecommunications, as well as growing levels of education, the study adds. Africa's new middle class will become champions of the private sector, the study contends, driving a more competitive economic environment that will be attractive to foreign investment.
Growth drivers
Frost & Sullivan also believes another key driver of growth will be increased regional integration across Africa. Not only does the firm foresee the creation of a grand free trade zone incorporating most, if not all, of the countries on the continent, but also a rise in electricity trade through power pools that will ensure supply security.
“The development of a grand free trade zone and the strengthening of the regional power pools are expected to significantly increase the size of the consumer market for large scale infrastructure investments,” says Frost & Sullivan's energy and power industry analyst, Ross Bruton.
“Infrastructure investment is expected to be developed primarily within key regional economies that have the potential to export products to surrounding countries cheaply.”
The other mega trends covered by the study and to be discussed at GIL 2011: Africa are 'innovation to zero', 'renewable power', 'new business models', 'the responsible revolution' and 'future infrastructure'.
GIL 2011: Africa will take place at the Westin Grand in Cape Town.
Share