“Don’t stand by the water and long for fish; go home and weave a net!” – Old Chinese proverb
It may appear as if for too long Africans ignored this insightful proverb, but that was in the distant past. Strong economic growth, young populations, a swelling middle class and untapped consumer spending potential are making sub-Saharan Africa a key investment opportunity.
Once the sleeping giant, Africa is now wide awake to what is needed to become one of the most prosperous and progressive continents on the planet. In fact, Africa is the second fastest growing region in the world, with a current population of over 1.5 billion people, of which 60% are under the age of 29. Currently it’s ranked ahead of five other regions – the former Soviet States, Eastern Europe, Western Europe, the Middle East and Central America. Individually, a number of Africa’s fifty-four countries have already achieved notable successes. Nigeria and Angola are world leaders in the export of crude oil, Kenya has one of the most active and rapidly growing on-line populations – not just in Africa but the world. On the financial front, four of South Africa’s banks are rated among the world’s top 500 institutions with the JSE the world’s 15th largest stock exchange.
So how brilliant is Africa’s future? Let the facts speak for themselves:
No region in the world has embraced urbanisation as rapidly as Africa. More than half of its population will be urbanised by 2030, and by 2050, two out of three Africans will live in cities. With three mobile phones for every four people, Africa’s enthusiasm for technology is boosting growth. And by 2017, nearly 30% of households are expected to have television. In contrast to the rest of the world, Africa has a younger expanding labour force of over 500 million and by 2040 Africa’s workforce will be greater than that of China or India.
By 2015, African countries will account for seven of the top 10 fastest growing economies. Consumer spending is projected to hit $1.4 trillion by 2020. The region’s abundance of mineral wealth already provides 10% of the world’s reserves of oil, 40% of its gold, 50% of diamonds, 80% of chromium and 90% of platinum. With over 60% of the world’s uncultivated arable land, Africa is destined to become the world’s ‘bread basket’.
“There is a new great game being played out in Africa, yet much of the west ignores this geostrategic giant – in the end we all have to go to Africa, they have what we need” – Bob Geldof
Only a few years ago, companies were asking themselves, “Should we invest in Africa?” Today they are saying: “Can we afford not to invest in Africa?” So who’s investing in Africa now? All the major global brands such as Unilever, Coca-Cola, Airtel, Nestlé, Procter & Gamble, Marriott, Kraft, Cummins, and more.
All of these multi-nationals are already making considerable inroads throughout the continent, with Japan, China and the USA already committed to pouring billions of investment dollars into Africa.
South Africa, with its well established first world infrastructure is strongly positioned to act as the future springboard for aspirant multi-nationals looking to expand into the sub-Saharan region and South African companies and retail chains are leading the pack. Companies are choosing to partner with local firms or acquire smaller ones with strong brand recognition, route-to- market capabilities and production capacity. With growth slowing elsewhere around the world, Africa is looking better and better.
“All of our major clients, who are looking for geographical expansion opportunities, have Africa and the Middle East high up on their priority list, if not at the top.” – Martin Sorrell
On his recent visit to Tanzania, US President Barack Obama said: “I see Africa as the world’s next major economic success story and the United States wants to be a partner in that success.”
All this also bodes well for advertising agencies, but only for those that can consistently deliver an innovative and meaningful continuum of relevant communications. They must realise that African consumers are highly brand conscious, increasingly demanding the latest fashions and a modern shopping experience.
Agencies must understand that Africa has unique markets with unique insights, and a diversity of cultures and languages.
It is senseless and self-defeating for multinationals to simply place adaptations of international campaigns into the African marketplace and hope they will achieve the same goals as they would in their own country. For an advertising agency to succeed and prosper, it must be able to offer appealing and original ideas, communicated in a unique African context. The experienced, well-established local agencies are still the best placed to create memorable and impactful campaigns based on the particular nuances of the individual and colourful African cultures.
Combine this with their unique experience and know-how in communicating to their respective and distinctive audiences, and there’ll be no limit as to how far the African Express will take them.
As we say in Africa; “The mind is not a vessel to be filled, but a fire to be kindled!”
Peter Jackson is managing director of the Volcano Group, an independent advertising agency in Southern Africa
Find out more about the opportunities for African consumer markets at Africa Day in London on Friday January 31, organized by thenetworkone in association with The Dialogue Room.
To book a place, contact firstname.lastname@example.org