Africa has become a magnet for medium and high-end consumer business investment. This can be traced quite rightly to the ever-growing population in large urban cities across the continent. Africa's population has the entire world's population rate with a twenty per cent projection over the next five years. By 2026, Africa will be home to almost one-sixth of the world's population, and about 45 per cent will be city dwellers. Urbanization will bring about an increase in per capita consumption. Urban cities in Africa like Cape Town, Lagos, Nairobi have per capita consumption rates greater than double the country rates. This will drive the continent's economic activity and lead to the creation of substantive markets and trade opportunities. More than 43 per cent of Africans across the continent belong to the middle or upper class. The demand for mid to high consumers has seen a proportionate annual growth of about ten per cent, which would likely add an extra USD 2.5 trillion to African GDP by 2030. However, the recent turn of events has raised a few eyebrows, and investors and multinational corporations have begun to ask the question; Is the African surge in the consumer sector still worth investing in? Is the Africa consumer market still as attractive as it was years ago?
Industries included in the mid to high-level consumption in Africa
According to an analysis by the World Travel and Tourism Council (WTTC), the Tourism industry in South Africa straightforwardly utilizes a more significant workforce than Mining, Communication services, automotive manufacturing, and chemical manufacturing sector.
Tourism is one of the most profitable industries in Africa. The industry is expected to develop due to its radiant environment, rich biodiversity, social variety, and long-standing value for money experiences. The sector has also registered immense development, and it is currently the second quickest developing tourism industry globally, behind only the Asia Pacific region.
Information, Communication and Technology (ICT)
The internet contribution to Africa's overall GDP is low but a projected growth to at least 6 per cent by 2025. This is a result of a lower penetration rate when compared to the rest of the world. Parameters such as the number of ISP subscriptions, the overall number of hosts, IXP-traffic, and the overall available bandwidth indicate that Africa is far behind the digital divide. In 2013, about 13.5 per cent of the African population had internet access, with Africa accounting for 15.0 per cent of the world's population.
In 2019, only 28.2 per cent of African had internet connectivity while other regions like Europe had 82.5 per cent. It is widely believed that increased availability of internet technology in Africa would provide several key benefits. Internet-based telemedicine and distance learning could also improve the quality of life in Africa's most remote rural areas. In 2020, Sub-Saharan Africa had fewer fixed telephone lines than Manhattan, and in 2006, Africa contributed only two per cent of the world's overall telephone usage. Most African-generated network traffic of about 83 per cent is routed through servers controlled in other continents.
Medium and high-level consumers are leapfrogging landline infrastructure and jumping straight into digital mobile technology. Africa is the fastest and the second-largest mobile phone market globally, with more than 8 out of 10 Africans with a mobile device.
Aerospace and aviation
The African space industry is continuously growing in capacity and investment. In 2019, Space in Africa reported that the African space industry is worth about USD 7.34 billion, with figures expected to rise over the coming years.
The industry sees the emergence of new government space programmes with Egypt and Rwanda's governments establishing fully operational space agencies during the 2nd half of 2019 and the first half of 2020. With other countries announcing their national space program, this translates to an increase in federal budgetary allocation for space. For 2020, African governments budgeted an estimated USD 490 million towards their space programme compared to USD 250 million from the previous year, excluding capital expenditures on satellites' acquisition centre.
The COVID-19 pandemic's impact on the space industry has led to delay in launches, manufacturing being halted, and some companies filing for bankruptcy. In Europe, politicians warn that due to a decline in private sector investment, the impact of the pandemic on the space industry economically could be up to €1 billion. In Africa, the effect is mixed. Conferences and meetings such as the 16th International Conference on Space Operations (SpaceOps), the inaugural conference of the African Astronomical Society for 2020 (AfAS2020), the first International Academy of Astronautics (IAA) symposium on small satellites are either cancelled or postponed.
Africa's rapid economic development provides an overwhelming energy challenge, joined with rising assumptions for improved versatility and maintainability.
Tracking down a reasonable method to meet developing energy needs is one of the centre advancements challenges for the region. Africa is rich in sustainable energy sources, including hydro, sun, wind, and others, and should be doing more to guarantee the correct energy blend.
International Renewable Energy Agency (IRENA) mentioned that with the right policies, regulation and access to financial markets, sub-Saharan Africa could meet up to 67 per cent of its energy needs by 2030. Renewables are an undeniably preferred alternative energy source in Africa due to genuine environmental concerns and relatively cheaper. For instance, Africa has shown incredible advancement in improving its sun-powered energy markets over the new year's. The continent realizes over 1.8W of new sun-based establishments, predominantly by five nations; Egypt, South Africa, Kenya, Namibia, and Ghana. Africa's modest countries, including Cape Verde, Djibouti, Rwanda, and Swaziland, have set aggressive sustainable power targets. Others are going with the same pattern, and renewable energy is on the ascent across the continent.
Regardless of the difficulties that emerged from the COVID-19 pandemic, the basics of sustainable power development have not changed. International Renewable Energy Agency (IRENA) mentioned that with the right policies, regulation and access to financial markets, sub-Saharan Africa could meet up to 67 per cent of its energy needs by 2030.
Food and Beverages
Africa Food and Beverages market rose from USD 75.63 billion in 2010 to USD 142.61 billion in 2019 at a Compound Annual Growth Rate (CAGR) of 7.30 per cent. The COVID-19 episode influenced Africa's food and drinks market as assembling exercises were halted because of the public authority's lockdowns. The market in 2020 has a growth of USD 143.99 billion and a projected USSD 277.16 billion out of 2030 at a CAGR of 6.80 per cent.
The execution of online retail in Food and Beverages has been slacking for twenty years. Nonetheless, it has taken off now, turning into the quickest developing product category in eCommerce. The critical difficulties in this area are working with the swift conveyance of perishable products, tackling the last mile issue, and same-day transportation.
Clothing and textile
The African fashion industry has been evolving significantly over the last years. Many African designers have been seen participating on the international stage showcasing their creativity and designs and being applauded by fashion lovers worldwide. Their representations in magazines and fashion events have spotlighted the growing fashion scene of the African continent. The global fashion industry is worth USD 2.5 trillion, with Africa's share estimated at less than one per cent of that total. Meanwhile, Euromonitor suggests that the Sub-Saharan fashion market is worth USD 31 billion.
The pandemic has halted production and forced stores to close, prompting African fashion designers to build up their businesses online. Designer production is halted, fashion shows and events are postponed or moved online, and brands have had to scramble to set up good online businesses to make up for sales lost to store closures. In June 2020, African designers from across the continent had a webinar session to devise ways of growing the industry. To this end, the African Development Bank Group supported the local fashion industry by USD 31 billion. The group discussed the plausibility of several digital innovations that would help designers transition their businesses for a post-pandemic reality.
These designers rely on store sales, in-house production, and physical shows to gain audience followings and run their businesses. Last-mile delivery challenges stunt Africa's e-commerce industry, and a year-long effort to bring raw material production domestically means that all manufacturing is closed.
There are some powerful arising sub-sectors inside the service industry to promote development, which presently is being overlooked. Logistics and distribution could significantly profit Africa's Agriculture and manufacturing industries. African policymakers need to emphasize providing more modern services that offer innovation and linkage advancement with different sectors of the economy. The service economy in Africa is an essential source of revenue and employment. In some African nations, more than 66 per cent of the labour force is occupied with services. Generally, the service sector in Africa represented 33 per cent of formal employment between 2009–2012.
The continent is now taking advantage of the chances the service industry has to offer. For instance, some African economies have been building up their service businesses with relative achievement and are providing services across Africa. This is the case of banking services industries of Mauritius and Nigeria, the freight air transport industry in Ethiopia and South Africa, the educational service ventures of Uganda and Ghana, the telecommunications services of Egypt and the port administrations businesses of Kenya.
The African services industry totaled USD 271 billion in 2012. Though Africa is a marginal player in global services trade with an import state of the per cent and an export share of two per cent supported. The sector is an essential source of export revenue that should be further exploited if Africa assumes a role as a global player in services trade. However, regulatory and policy shortcomings are noticeable within the industry, which impedes the service sector from reaching its full potential. Africa must therefore shift its focus from non-tradable services to a more viable source of growth. For this to happen, there must be a comprehensive review of the service sector's policies and other industries at the three levels: national, regional, and global. Also, the link between human capital and high value-added services should be supported by the appointed institutions. To achieve this, the government needs to intervene by developing a technical training system and subsidizing higher education.
According to the United Nations Conference on Trade and Development (UNCTAD) in 2015, the informal sector is responsible for about 50 - 80 per cent of Africa's GDP. Therefore, measures must be taken to support the formalization of the informal service providers to enhance their productivity. This can also be addressed by putting in place a fair taxation system, lowering regulatory burdens, and improving access to loans for small businesses.
Africa has become a magnet for medium and high-end consumer business investment. This can be traced quite rightly to the ever-growing population in large urban cities across the continent. Africa's population has the entire world's population rate with a twenty per cent projection over the next five years.
Chinese investments in Sri Lanka have contributed to economic growth in Sri Lanka in terms of creation thousands of jobs for locals,infrastructure development and modification,on the contrary to allegations made in some quarters otherwise,a spokesman from the Chinese Chamber of Commerce in Sri Lanka(CCCSL)in Sri Lanka said.
In November this year, Uruguay and Hainan Province signed a framework cooperation agreement on the establishment of the Uruguayan Football Program which states the Uruguay Football Club, Latin Cultural, Education & Auction Center has been set up in Hainan, promoting exchange and cooperation in fields such as culture, education and sports between the two sides. Ambassador Fernando Lugris told us that he had visited Hainan many times and found more space for cooperation each time.