The so-called frontier markets of sub-Saharan Africa showed sharp equity price gains in the first week of trading in 2011, according to pan-African financial services group Imara. The company speaks of “an Africa comeback”, following strong buying by offshore investors in the final quarter of 2010.
A fresh round of competition is expected in the domestic consumer goods market following plans by two giant Indian firms to buy into the industry that is fast attracting foreign firms eyeing regional markets.
Indian consumer product giants Dabur, and Emami, said they planned to make asset acquisition in Kenya among other African countries as a way of growing their businesses in the frontier markets.
Dabur, one of the most active Indian players in Africa, is looking for assets in the $10 to $50 million range in South Africa, Nigeria, Kenya, Ghana, Mozambique and Tanzania, said Sunil Duggal, its chief executive officer.
“Africa is a good hedge for what is happening in the Indian markets and now asset valuations there are attractive compared to India,” he said. Dabur Ltd deals in skin and hair-care products under brands like Vatika, Gulabari, and Uveda.
Emami, which won board approval in October to invest $1 billion to buy assets overseas and in India, is looking for more deals in markets including South Africa, Kenya and Nigeria, Group Director Harsh Agarwal told Reuters.
The battle between China and Western nations for business in Kenya is moving to the telecoms sector as the Asian country grows its market share in the mobile handset and infrastructure market at the expense of European firms.
Until five years ago, the Kenyan telecommunications sector heavily leaned towards European based firms such as Ericsson, Alcatel-Lucent and Nokia. More recently, however, China based firms such as Huawei and ZTE Technologies have been gaining ground in the infrastructure market and are now moving to the retail segment with low cost mobile phones and internet modems.
As a result, they are gaining markets share in the retail segment that has remained the domain of European based brands such as Nokia, Motorola and Samsung, firms that are finding it difficult to match the Chinese brands on pricing.
“The perception that Chinese made products were of poor quality is fast fading,” says Vincent Mutavi, a telecom analsysts. “Besides being low cost„ firms like Huawei are matching if not surpassing European firms on quality, giving them an edge in price sensitive markets such as Kenya,” added Mutavi.
The world responded
We have been amazed by the global response to this competition. We’ve received apps from 36 countries; 30 of the 107 final submissions came from Africa. We received more submissions from Uganda, Nigeria, Kenya, and Ghana than from all of Europe.
Submissions range from simple games for awareness raising to visualization tools and research programs to make better use of development indicators when analyzing the Millennium Development Goals.
What excites me most is to consider what many of these same developers could do if equipped with more granular information including sub-national and hyper-local data. What we’ve learned from Apps competition in the US, UK, and Canada is the corollary to the axiom “all politics are local”.
When it comes to Apps competitions, the best apps are hyper-local. This is where people’s daily realities interface with the value of information. Things become less abstract when talking local crime statistics, local school performance, and the quality of health care between providers in your district.
The response to this competition underlines the enormous opportunity that exists in creating national apps challenges in partnership with government and other data providers. What will people do with local data when presented with the opportunity to make it useful to citizens as customers or users?
” —A Global Challenge, A Global Response | The intersection of the web and the World Bank.Unlike earlier African booms, this growth has not been driven primarily by natural resources. Instead, in the last five years, two-thirds of Africa’s economic growth has resulted from increasing demand for goods and services, especially in sectors such as retail, real estate, telecommunications and banking. For the first time, Africa is seeing the emergence of an urban consumer class with massive buying power. In 2008, African households spent $860 billion (€658 billion).
This is the sort of growth we have come to associate with the Bric economies – Brazil, Russia, India and China – but African economies are beginning to match them in a number of areas. Today, Africa has more middle-class households than India, and a recent report by management consultants McKinsey predicted that the number of African households with discretionary income will reach 128 million in the next 10 years – an increase of 50 per cent. On a per capita basis, Africans are wealthier than Indians, and 12 African states have higher gross income per capita than China.
” —Irish firms should see Africa’s growth as an opportunity - The Irish Times - Fri, Jan 07, 2011MUCH has been written about the rise of the BRICs (Brazil, Russia, India and China) and the shift in economic power eastward as Asia outruns the rest of the world. But the surprising success story of the past decade lies elsewhere.
An analysis by The Economist finds that over the ten years to 2010, no fewer than six of the world’s ten fastest-growing economies were in sub-Saharan Africa (see table).
The only BRIC country to make the top ten was China, in second place behind Angola. The other five African sprinters were Nigeria, Ethiopia, Chad, Mozambique and Rwanda, all with annual growth rates of around 8% or more. During the two decades to 2000 only one African economy (Uganda) made the top ten, against nine from Asia. On IMF forecasts Africa will grab seven of the top ten places over the next five years .
Over the past decade sub-Saharan Africa’s real GDP growth rate jumped to an annual average of 5.7%, up from only 2.4% over the previous two decades. That beat Latin America’s 3.3%, but not emerging Asia’s 7.9%. Asia’s stunning performance largely reflects the vast weight of China and India; most economies saw much slower growth, such as 4% in South Korea and Taiwan. The simple unweighted average of countries’ growth rates was virtually identical in Africa and Asia.
