Nigeria to outshine South Africa as corporate growth market by 2021

Nigeria, South Africa and Kenya will remain three key markets for the next six years with Nigeria predicted to overtake South Africa as the top market by 2021.

This is based on a survey conducted by the Economist Corporate Network (ECN) on 120 African-based executives which revealed that these three countries are likely to retain their dominant positions as the most favoured markets for corporate growth.

According to the report, Nigeria’s operating environment will become more competitive being the highest priority growth market for most executives’ firms and it will become imperative for firms to carefully consider their approach to competitively and profitably serve this market.

In recent years, Africa’s economic growth has been sluggish and studies have shown that it still improves faster than the rest of the world. The growth and the opportunities presented have captured the attention of many firms.

“Nigeria is obviously the largest economy in Africa. The demography is truly young and growing. Statistics show that over 40 million Nigerians are in the middle class with an income of $7,500 and that makes it an extremely attractive market. The demand, growth and the opportunity is in Nigeria,” said Tobias Wasmuht, Chief Executive Officer, SPAR International.

Despite the harsh economic atmosphere, Africa-based economies weather will the storm faced in their home countries in the foreseeable future but this might take a while to happen.

“Economic growth in Sub-Saharan Africa may have slowed relative to recent rates, but the resilience of many of the region’s economies and the still-favourable medium-to-long-term prospects for business suggest the region cannot be ignored.

“It is clear from the executives’ input that Africa-based operations are expected to play an increasingly important role in the revenue, profitability and investment mix of their firms in the years ahead”, the report stated.

In spite of the tough economic environment, Sub-Sahara Africa is said to be growing at a faster rate when compared to other world’s economic regions and the region’s above-average rates of growth are expected to continue in the medium term as infrastructure improves, the middle-class population grows and many countries move up the value chain in terms of agriculture and industry diversify.

The addition of seven Sub-Saharan African countries featured among economies expected to grow the fastest in 2016 to the group of fast-growing economies points to the prospects of the African region overall, even though their number is a slight decline on the nine countries that featured in the top 20 in 2015.

“The Africa rising story is going to right size a little”, said Mo Shaik, International Finance Executive at the Development Bank of Southern Africa.

With the imminent challenge facing Nigeria and South Africa, the executives’ ranking suggested that they are looking through the current economic cycle and also seeing the commercial importance placed of Sub-Saharan Africa’s two largest economies.

“Sub-Saharan Africa remains one of the world’s fastest-growing regions. In 2016, despite economic headwinds of soft commodity prices, US monetary tightening, infrastructure deficits, terrorist threats and political unrest in some countries, seven of the world’s fastest-growing economies will be in Africa”, the report further stated.

   CHINWE AGBEZE