Africa is a dynamic market that’s full of potential. However, even with a growing number of great opportunities for business, there is still room for improvement. Nielsen has produced a new edition of insights for Q3’ 2016 Africa’s Prospects Indicators (APi) based on 4 prospect dimensions: Macro, Business, Consumer, and Retail.
A few countries have made the list, but based on the latest edition Côte d’Ivoire remains #1 in the overall Africa Prospects Indicator. The four dimensions (macro, business, consumer, and retail) have a direct impact on the nature of the ranking which is often very dynamic; Ghana has jumped five places to #4, whereas Zambia has dropped four places to settle at #9.
The new edition also notes a few important headlines in the Africa Prospects Rankings. Overall, Africa’s growth is forecast to slow down to 2.5% (from 3.3% in 2015) due to four major factors: declining commodity prices, lower demand from China, tightening global financial conditions, and drought. However, the good news is that nearly 60% of global consumers will buy local brands to support homegrown businesses and developing markets consumers feel that local brands are more attuned with their needs and tastes. Last but not least, Côte d’Ivoire and Ghana retailers perceive improvements in the ease of doing business.
When it comes to the prospects themselves, Kenya has the strongest macro-economic prospect mainly due to the fact that it experienced a lower impact by the slump in commodity prices. Additionally, 61% consumers, in a country with a $63.4 billion economy, have claimed that they’re willing to try new things. This puts Kenya in a good spot; the challenge now is to have the right product in the right place in order to generate demand.
The country with the strongest business prospects is Ghana and Uganda scores highest on the consumer prospects; as an example, an identical basket of goods in Uganda costs ⅓ less than in Angola. Ghana also has the weakest retail prospects out of all the countries on the list. Retailers remain pessimistic about future growth despite slightly improved sentiment. However, it’s better to remain optimistic: businesses need to work with retailers to help improve the ease of doing business and build strategies to grow consumer demand which will stimulate consumption and improve the overall growth outlook.