Tutafika
JF-Expert Member
- Nov 4, 2009
- 1,443
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Dar es salaam is heading somewhere attractive!, just det on!
Everyone is talking up Africas potential for growth but in a continent with more than a billion people, where should foreign companies focus their attention?
According to research by Frontier Strategy Group, Africa will have 73 cities of 1-5m people by 2025. Matthew Spivack, head of MENA research, picks out five top urban markets across the continent and five up-and-coming prospects. Some are very well-known; others may surprise you.
First, the Big 5′ - cities which are broadly politically and economically-stable, and already major FDI destinations. They are:
- Accra, Ghana
- Johannesburg, South Africa
- Lagos, Nigeria
- Luanda, Angola
- Nairobi, Kenya
No major surprises here. Johannesburg is the biggest city in sub-Saharan Africas leading economy, and, as Frontier notes, is reaching the size of a large European city. Its nominal GDP output is $51bn; Munich, in Germany, has a GDP of $64bn.
Lagos has a smaller economy, at $40bn but that is expected to jump when Nigeria rebases its economic statistics this year. By 2015, Frontier says, risk-weighted business opportunities in Lagos will far outpace that of the citys nearest competitor (Johannesburg).
Its the Next 5′ large cities with rapidly expanding economies, but serious business climate deficiencies that offer some of the biggest potential rewards provided multinationals can stomach the risks. They are:
- Addis Ababa, Ethiopia
- Dar es Salaam, Tanzania
- Ibadan, Nigeria
- Kinshasa, Congo-DRC
- Mombasa, Kenya
Some of the worlds largest companies have already made inroads into these economies. Diaego, one of the worlds largest brewing companies, paid $225m for Ethiopias state-owned brewer Meta Abo last year, to tap into Addis Ababas growing consumer market. Whats more, the African Union is headquartered in the city, making it the political capital of Africa, Frontier says. Thats a bit of a stretch, but the business buzz in Addis is undeniable.
Fellow beer group Heineken is spending $325m in Kinshasa, Congos capital. Frontier says: while poverty and an underdeveloped infrastructure reduce market size in Kinshasa, staggering population growth and consistently higheconomic growth means the city of 10 million cannot remain ignored by many MNCs.
Dar es Salaam, Tanzanias largest city, arguably offers the best investment prospects of all. Taking into account its size, short-term stability and growth, Frontier ranks it as the third best risk-weighted business opportunity in all of Africa by 2015.
An emerging trade hub in east Africa, it is increasingly handling more cargo than Mombasa, the regions other sea trade centre. And Japanese carmaker Honda Motor has recently shown an interest, teaming up with a Tanzanian company and preparing to build an assembly plant to expand sales in the city.
There are risks to expanding in all of these markets, of course Frontier highlights the usual concerns about infrastructure, corruption, and regulation. But Africa is the fastest growing and most rapidly urbanising region in the world. The risks of staying out could be greater still.
source: Business Times
Everyone is talking up Africas potential for growth but in a continent with more than a billion people, where should foreign companies focus their attention?
According to research by Frontier Strategy Group, Africa will have 73 cities of 1-5m people by 2025. Matthew Spivack, head of MENA research, picks out five top urban markets across the continent and five up-and-coming prospects. Some are very well-known; others may surprise you.
First, the Big 5′ - cities which are broadly politically and economically-stable, and already major FDI destinations. They are:
- Accra, Ghana
- Johannesburg, South Africa
- Lagos, Nigeria
- Luanda, Angola
- Nairobi, Kenya
No major surprises here. Johannesburg is the biggest city in sub-Saharan Africas leading economy, and, as Frontier notes, is reaching the size of a large European city. Its nominal GDP output is $51bn; Munich, in Germany, has a GDP of $64bn.
Lagos has a smaller economy, at $40bn but that is expected to jump when Nigeria rebases its economic statistics this year. By 2015, Frontier says, risk-weighted business opportunities in Lagos will far outpace that of the citys nearest competitor (Johannesburg).
Its the Next 5′ large cities with rapidly expanding economies, but serious business climate deficiencies that offer some of the biggest potential rewards provided multinationals can stomach the risks. They are:
- Addis Ababa, Ethiopia
- Dar es Salaam, Tanzania
- Ibadan, Nigeria
- Kinshasa, Congo-DRC
- Mombasa, Kenya
Some of the worlds largest companies have already made inroads into these economies. Diaego, one of the worlds largest brewing companies, paid $225m for Ethiopias state-owned brewer Meta Abo last year, to tap into Addis Ababas growing consumer market. Whats more, the African Union is headquartered in the city, making it the political capital of Africa, Frontier says. Thats a bit of a stretch, but the business buzz in Addis is undeniable.
Fellow beer group Heineken is spending $325m in Kinshasa, Congos capital. Frontier says: while poverty and an underdeveloped infrastructure reduce market size in Kinshasa, staggering population growth and consistently higheconomic growth means the city of 10 million cannot remain ignored by many MNCs.
Dar es Salaam, Tanzanias largest city, arguably offers the best investment prospects of all. Taking into account its size, short-term stability and growth, Frontier ranks it as the third best risk-weighted business opportunity in all of Africa by 2015.
An emerging trade hub in east Africa, it is increasingly handling more cargo than Mombasa, the regions other sea trade centre. And Japanese carmaker Honda Motor has recently shown an interest, teaming up with a Tanzanian company and preparing to build an assembly plant to expand sales in the city.
There are risks to expanding in all of these markets, of course Frontier highlights the usual concerns about infrastructure, corruption, and regulation. But Africa is the fastest growing and most rapidly urbanising region in the world. The risks of staying out could be greater still.
source: Business Times