Africa: Poised for Economic Growth
Economists believe that sub-Saharan Africa is at the beginning of a sustained phase of rapid growth. Markets with the following factors are considered especially promising: a burgeoning entrepreneurial culture tied to global information accessibility; growing populations with per capita income also growing; economic and democratic stability; and economic diversification. Recent improvements in global prices for minerals, energy and agricultural products are also contributing to this growth. In addition, a youth culture of strong interest in business creation is a driving force, with many young entrepreneurs looking for global opportunities.
Regional powerhouses and gateway economies
Within the African continent, South Africa and Kenya are two markets of particular opportunity for Wisconsin companies. These two markets act as regional distribution nodes and key entry points to their respective regions of Africa. With English as the language of business, access to global information, a strong entrepreneurial culture and strong rule of law, these two markets are poised for growth, and are ready and eager for Wisconsin exports.
An upcoming global trade venture to South Africa and Kenya, organized by the Wisconsin Economic Development Corporation (WEDC), will help connect you to potential buyers, distributors and other partners in these two markets. With logistics, interpretation and lodging arranged for you, you can focus your energies on meeting and vetting potential partners.
The global trade venture will take place Sept. 22-Oct. 3, 2018, and will include segments in Johannesburg, Durban and Nairobi. In each city, participating companies will be scheduled for customized business meetings with potential local partners hand-picked for their companies by Wisconsin’s authorized trade representatives for African markets.
South Africa is the most advanced, diversified and productive economy in Africa, and appears to be headed for greater political stability, investment interest and economic growth with the new administration headed by President Cyril Ramaphosa. South Africa’s currency, the rand, has been gaining against the U.S. dollar in the last three months—a positive development for U.S. exports—and recently reached its highest level in three years. The Johannesburg Stock Exchange ranks among the top emerging market exchanges in the world.
Likewise, Kenya is reaching a stage where stability in government and stronger security measures are having a positive effect on business growth. In the World Bank’s 2017 Ease of Doing Business Index, Kenya moved up 21 places from the prior year, now ranking #92 globally. Its urban areas, particularly Nairobi, are noted for their large number of well-educated, English-speaking and multilingual professionals and for their strong entrepreneurial tradition. Kenya is also a very young country, with almost 80 percent of its 47.2 million total population under the age of 35. Its government has initiated a broad range of business reforms in areas including ease of starting a business, access to electricity, registering property, protecting minority investors and streamlining insolvency rules. Kenya is also experiencing the fastest increase in foreign direct investment in Africa, with the majority of foreign investment going into renewable energy projects.
Demand for Wisconsin products
South Africa is a business incubator for new-to-market ideas in the region. As Africa’s middle class grows, business models launched in and from South Africa will take hold in other markets of sub-Saharan Africa. While a significant portion of South Africa is highly developed and comparable to Europe and North America, many parts of the region are still in need of infrastructure, and customers are looking for heavy-duty, dependable equipment that is easy to maintain and repair.
The agricultural sector continues to be the backbone of Kenya’s economy, with many food processors seeking to improve their production methods and expand their brands, making the country a good market for processing and packaging machinery. The construction and real estate sector is one of the fastest-growing sectors in Kenya, logging a 14 percent growth rate in 2015. The government places a high priority on implementation of infrastructure mega-projects (road, rail, energy, port and airport modernization), creating demand for construction equipment.
In general, these markets present strong opportunities for Wisconsin companies offering construction equipment, power generation and distribution equipment, water technology and pollution control equipment, food processing and packaging machinery, and supplies and equipment for the tourism sector, as well as capital goods, consumer goods and franchising opportunities.