With an increasing interest in Africa, we continue to experience a range of international companies doing business on the continent. It does reveal to us, though, that the perception gap is still relatively wide, and that while many potential investors are exploring the idea of Africa, work must still be done on bridging the gap.

The growth opportunities in Africa are increasingly evident: by 2035, the continent will have the world’s largest workforce, with over half of the population currently under the age of 20; the past 10 years have seen vast improvements in macroeconomic stability, and a burgeoning and fast-growing South-South trade and investment flow (with over US$170 Billion of trade with China alone).

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Africa presents a significant opportunity across multiple sectors – with US$2.6 trillion of revenue expected by 2020 across resources, agriculture, consumer and infrastructure, of which US$1.4 trillion will be in consumer industries alone. The rapid emergence of a middle class, already equal in size to India, makes consumption a major driver of economic growth across the region, and is one of the most interesting yet less explored opportunities across Africa. We are often asked about the risks of operating in Africa. While the existence of corruption, poverty and limited infrastructure mean that the continent can still be a challenging place to do business, we are seeing steady progress across most markets. Over the last 10 years, governance and political stability have improved significantly.

 

 

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Although the levels of education, employment and skills vary substantially across the continent, there are increasingly deep talent pools in a number of key markets. Importantly, while many of these challenges facing businesses in key African markets are no more significant than elsewhere in the world, the rewards on offer are substantial. Critically, it is this risk-reward equation that makes African investment so compelling the returns remain among the highest in the world, while risks are diminishing and can be effectively managed.

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