Last week on the plane from Accra to Amsterdam, the lady next to me asked me: “Do you work for a NGO or for the government?” “Neither, I represent a private company and I just visited our branch office in Ghana”, I replied. This question from my fellow traveler illustrates the out-of-date image that many people still have of Africa: Africa as the continent where aid dominates the economy and all countries are the same.
Obviously, this image does not comply with reality. 'Africa' is not a homogenous entity and the economies of many African countries are booming.
In fact, in 2013 Ghana's GDP grew by 7.9% and is expected to continue at an average of 6% over 2014-2020. European economies can only dream about growth figures like this. Ghanaian economic growth significantly increases the disposable income of the average household, which is reflected in the booming sales of all consumer goods. CFOs looking to grow their business in this market can't ignore numbers like this and many haven't.
A number of European companies saw the opportunities in countries like Ghana and established themselves on the continent, to benefit from these commercial opportunities. A few of the businesses that spotted the opportunities early on include Heineken (early 1960s), Unilever (since 1992), Philips (2013) and Berenschot, which has opened an office in Ghana this year.
Many European companies with a presence in Ghana have chosen Accra as their regional base. They also often organize their business in Nigeria from Accra. With a population of around 175 million people, Nigeria offers a huge domestic market for businesses.
Ghana and Nigeria are not just 'African' exceptions either. Overall economic growth in Sub-Saharan Africa continues to rise from 4.7 percent in 2013 to a forecasted 5.2 percent in 2014. In many countries on the continent democratic governments are taking hold and as a result of increased stability and prosperity, the young people living in these countries have more money to spend every year. That is why capital flows to Sub-Saharan Africa are continuing to rise.
If you are a CFO looking at opportunities to invest in countries on the African continent, you won't be a front-runner anymore. But rather be a follower than have you and your business miss out on these opportunities altogether.
Fons de Zeeuw
Berenschot International
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