The African economy is projected to grow 77% annually between 2014 and 2019, around double the rate of advanced economies, according to a recent report by Deloitte.
Africa: A 21st Century View found Africa has many opportunities and is relatively untapped by both UK businesses and investors, particularly in the emerging consumer sector.
With high growth economies like China, India and Brazil showing signs of slowing, the report found businesses are increasingly looking to the fast growing markets of Africa to offset this reduction.
Africa’s economy predicted to grow by $1.1 trillion – around 50% – to $3.7 trillion by 2019 and 15 African countries, including Nigeria, Ethiopia, Uganda, Tanzania and Zambia, are likely to outpace Chinese growth over the next 5 years.
Until now Africa’s economic story has been focused on natural resources and commodity exports. In 2013, 8 of the continent’s 12 fastest growing economies were not dependent on oil or mining.
In future, it will more likely be driven by consumers as rising incomes and urbanisation support growth in domestic demand.
This transformation coincides with the growth of the African middle class.
Ben Perkins, head of consumer business research at Deloitte, said: “Right now Africa is where South East Asia was 30 years ago – on the cusp of a consumer boom. By 2030, over half a billion Africans are projected to be middle class. The population is also dominantly young, with 680 million, or 60% of the total African population, aged below 25.”
Perkins said these younger Africans will play a critical role in the continent’s economic development not only because they will want increased connectivity and access to a wider choice of food, consumer goods and entertainment, but also as they bring a more innovative and entrepreneurial mindset.
He said the research shows Africa is not suffering from a lack of demand, but a lack of supply.
“The UK is currently underweight in Africa and now is the time to seize the opportunity.”