One of the major driving forces of Africa’s growth is the widespread adoption of mobile technology. According to Groupe Speciale Mobile Association (GSMA), a global organisation unifying the mobile ecosystem, the mobile economy in Sub-Saharan Africa is set to contribute $184 billion to the region’s GDP by 2024. With over 800 million mobile phone subscribers and growing, mobile technology is revolutionising the way Africans live, work, and do business.

Africa and e-Commerce Growth:

Africa’s digital revolution has paved the way for new route-to-market strategies that leverage technology to reach customers more effectively. One such strategy is e-Commerce, which has seen significant growth in recent years specifically in the African region. The e-Commerce market in Africa is projected to grow at a compound annual growth rate (CAGR) of 25% from 2020 to 2025, according to a report generated by ResearchAndMarkets.

African Growth and Digital Marketing:

Another route-to-market strategy is digital marketing. With the growing adoption of social media in Africa, companies can leverage platforms such as Facebook, Instagram, LinkedIn, and Twitter to reach their target audience more effectively. Social media has become an essential tool for companies looking to build brand awareness, engage with customers, and drive sales.

In addition, the rise of digital payments has also created new opportunities for companies looking to do business in Africa. Digital payment platforms such as M-Pesa, Paystack, and Flutterwave have made it easier for companies to transact with customers in Africa. These platforms offer secure, fast, and convenient payment options for customers, which can help drive sales and improve customer satisfaction.

However, as newcomer companies navigate the digital landscape in Africa, they must also square up to face the continent’s unique challenges. For example, infrastructure and logistics can pose significant challenges for companies looking to distribute goods and services across the continent. Companies must also consider the complex regulatory environment in Africa, which is region specific and can vary significantly from country to country.

Despite these challenges, the digital revolution and the adoption of new technologies are driving African growth through offering significant opportunities for companies looking to enter and succeed in the market. By leveraging new route-to-market strategies and understanding the unique trends of doing business in Africa, companies can unlock the continent’s vast potential for growth and prosperity.

COMBINING OPPORTUNITY CAPITALISATION AND ROUTE-TO-MARKET STRATEGY TO DRIVE AFRICAN SUCCESS

• A developing economic environment

Sub-Saharan Africa is experiencing steady growth, with a 4% expected annual real GDP growth in 2025. Urbanisation is driving modern retailing, while traditional markets remain an important factor that cannot be ignored. The rise of Africa’s middle class is set to boost disposable incomes by an additional 4% compound annual growth rate (CAGR) until 2030. Key industries such as packaged food, non-alcoholic beverages, and alcoholic drinks can expect to see a rise in sales. The continued growth rate and developing economic environment are also due to the African Free Trade Continent Agreement which works hard towards reducing tariffs and standardising trade policies among member countries. Therefore, making it easier for companies to trade between African countries.

• Digital connectivity

The digital revolution in Africa is leading to targeted and innovative solutions that turn challenges into opportunities. With a surge in mobile subscriptions, connectivity is becoming a lifeline for many Africans, enabling them to make purchases and conduct transactions through secure mobile payment systems. The continent’s lack of legacy systems has become a “testing ground” for digital innovation such as the use of apps that provide farmers with commodity pricing and equipment training. Social media is also making it easier to target consumers and develop partnerships with local inhabitants, highlighting the abundant opportunities for those who understand the complexities of doing business in Africa.

• Localising route-to-market strategies

As this article mentioned afore, developing effective route-to-market strategies is as crucial as adapting to Africa’s ever-improving digital technologies. With 54 independent countries, each having its own cultural attitudes, it’s essential to respect local nuances and business requirements when selling products. No African country operates the same, the target markets and way of doing business vary with each country. To succeed in African markets, companies should consider connecting with informal markets. Through the creation of local partnerships along the supply chain, and by promoting social trust and relationship strengthening,  companies stand to inherit more value and rapport as these communities honour honest communication solutions and do not take word-of-mouth recommendations lightly. These recommendations will assist foreign companies entering the African market to overcome distribution challenges and respond flexibly to changing market needs, all while generating a positive consumer response and driving African growth.

In conclusion, Africa presents a range of opportunities for foreign companies willing to invest the time and resources to understand the complexities of the African business market. The digital revolution and growth in mobile connectivity have offered many Africans new avenues for companies and entrepreneurs to engage with consumers and sell products. However, it is important for companies to recognise the idiosyncratic nature of each market within Africa and to focus on developing local route-to-market strategies that respect the cultural attitudes and beliefs of each country into which they wish to expand into. Building local partnerships with market entry service providers such as InterGest South Africa will ensure that companies overcome market entry challenges and gain a greater stake in their business outcomes. With the right approach, companies can capitalise on the growth and opportunities presented by the African market in both the near and long term.

For more information on the services rendered by InterGest South Africa, please send an email to contact@intergest.co.za

Source:

• Digital revolution and route to market strategies will drive African, growth –https://www.euromonitor.com/article/digital-revolution-and-route-to-market-strategies-will-drive-african-growth
• Mobile economy of Sub-Saharan Africa – https://www.gsma.com/mobileeconomy/sub-saharan-africa/
• South Africa eCommerce market size forecast – https://www.researchandmarkets.com/reports/5504330/south-africa-e-commerce-market-size-forecast

The post Driving African Growth via Route-to-Market Strategies appeared first on InterGest.

Although this is not a new fact to global investors and voyeurs, we offer a more holistic view of the regions capacity by examining 7 socioeconomic facts about Sub-Saharan Africa:

• Working age population to expand, offering opportunities for innovation and entrepreneurship in Sub-Saharan Regions

Many Sub-Saharan countries may face few employment opportunities and thus turn to entrepreneurship to build new opportunities for innovation and technological compliance. The population of this region is set to account for over half the global population growth over the next 20 years and for the working age to greatly surge when compared to the global economy and employment market.

• Mobile Internet to be at the forefront of Digital Transformation of Africa

Sub-Saharan Africa recorded an unseen high of local internet exposure of 48% in 2021 (Euromonitor). With mobile smartphone sales recorded to be on the rise in 2021, information access and delivery solutions quickly spiked. From this rush of activity, entrepreneurs grew their ideas to centralise delivery points and allow for local pick-up points for groceries, household goods, technology, the latest fashion trends, and even fast foods.

• Agreement Establishing the African Continental Free Trade Area (AfCFTA) to support new digital platforms and act as a steppingstone for Inter-Regional Trade in Sub-Saharan Africa

The impending take-off of the technological sector in African countries will aid the improvement of manufacturing and industrial goods leading to the refinement of locally produced products. With a range of better products on the rise, quality products can be exported triggering enhanced trade relationships and increased inter-African demand. Although the AfCTFTA is still in its early days of development and undergoing some teething issues along the way, the agreement clearly outlines its intentions to aid the development of local online trade platforms.

• SME Funding relying solely on local African Platforms

Local SME’s are now more than ever in need of custom finance lending solutions to meet their unique needs. Here, local lending platforms are finding their niche allowing for flexible and custom-made money programs which accommodate the requirements of each SME in a way that only a local broker would understand. With the correct financial support behind them, SMEs in Africa are becoming more common, and news of their success is becoming known globally. Many African countries are making their mark on the technological and digital sectors and are showing promising investment opportunities for major international companies.

• Vast Opportunities in renewable energy

The International Energy Agency outlines that by the year 2040 renewable energy will provide up to 50% of the power generation worldwide. Although several Sub-Saharan African countries already generate their electricity output from renewables, South Africa only records 7% of output as coming from renewable sources. As South Africa holds the title of  the largest energy producer in this region, it offers a unique opportunity to energypreneurs to not only offer rectification steps, but also unmatched energy opportunities. The resources for more renewable and natural sources of energy run rampant in the African Region with solar capacity being the most notable. With this being said, it is clear why energy companies are placing their interests in expanding into both the Sub Saharan African and Southern African region with hopes of tapping into this rich energy market.

• Diminishing Regional Discrepancies

Consumer income in rural areas is set to be on the incline resulting in a shrinking gap between urban and rural per capita income. In 2016, rural disposable income per capita in the sub-Saharan African region measured at 41% of urban disposable income per capita. However, 5 years on (2021), a 2% increase of this share is seen with rural disposable income reaching 43% of urban. Euromonitor has estimated that by the year 2040, rural disposable income will account for 67% of urban income, clearly outlining the decline in regional disparities and the growing rural consumers offerings and market choices.

• Improvement of Agricultural Productivity

Sub-Saharan Africa offers a wide variety of agricultural activities and with it many employment opportunities under this realm. In 2021, more than half of the recorded African population was employed under the agricultural sector with positions in hunting, forestry, farming and fishing activities. However, even with this large share of employment, the sector contributed a measly one-fifth to the total gross value added. By implementing growth in the agricultural sector, the security of food and improved consumer income will surely follow. This would result in government action and transformation enhancing the farmer’s access to supply chains and local markets. Access to the demand of consumers will therefore bring with it the need for farmers to mechanise, strategize and optimise their output in order to keep up with the regional demand and hold a promising share in the African Agribusiness market.

Sub-Saharan Africa has always been on the radar of the developed business world, however with its potential only seeming to rise over the next few years, now might be the time to investigate further into just how this lucrative and culturally rich environment could stand to benefit your company or help your new business model soar. For more information on why Sub-Saharan Africa should be your next business venture or how InterGest South Africa could assist with staffing, accounting or managing employees and funds, take a look at our company website.

Source:

https://www.euromonitor.com/article/10-key-socioeconomic-facts-about-sub-saharan-africa

The post Sub-Saharan Africa Socioeconomic Facts appeared first on InterGest.

According to South Africa’s finance minister Enoch Gondongwana, the National Treasury is set to spend R 812 billion on public infrastructure projects such as roads, bridges and other major projects over the next 3 years. This is a 30% increase in comparison to that of the last term period, which ended in March 2022 and saw a spend of R 627 billion.

Goals of the upcoming investments

At the infrastructure Indaba in Johannesburg on Thursday, 18.08.2022, Gondongwana called the investment plans an important step and signal to investors, industry and society, that the government is committed to the acceleration of infrastructure development. Further goals of the investments are significantly increasing capital investment by public and private sectors which accounted for 13,7% of GDP in 2020, growing the economy and reducing unemployment.

South Africa infrastructure development – Benefits of improving infrastructure to increase Foreign direct investment:

• Manufacturers will be able to easily to obtain raw materials and other components.
• Well-functioning ports will reduce the time where ships need to wait for long periods of time.
• Reliable infrastructure connects supply chains and enables companies to efficiently move goods and services across the country without unnecessary delays.
• Improved infrastructure in the costal regions could prevent severe damage to roads, bridges and buildings due to flooding.
• Improved infrastructure reduces the probability of power cuts and other inconveniences
• Improved infrastructure enhances the connectivity of many South Africans, improving their ability to take part in the economy
• Improved agricultural and rural infrastructure supports expansion of production and employment, small-scale farming and rural development

Challenges

While adding that government is taking measures to improve provision of public infrastructure and attract private capital, Gondongwana pointed out that the industry faces several challenges.

How South Africa is addressing these Challenges:

• Under-spending
  • To address under-spending of budgets, Gondongwana said that a project pipeline is needed for the preparation and planning of major projects.
  • The government is now assisting sponsors in developing project proposals through the Infrastructure Fund housed at the Southern African Development Bank.
• Shortcomings in maintenance
  • The maintenance of infrastructure is critical to ensure that investment can be focussed on new infrastructure instead of replacing infrastructure that should have a remaining useful lifespan.
• Corruption
  • The Ministry of Finance is taking steps to tackle waste and corruption in the procurement process.
  • The first step is to work with the Auditor-General to continue transparent disclosure of minor violations, but outside the financial audit process.
  • Secondly, the Ministry of Finance has incorporated the findings of the Zondo Commission reports, which highlight malpractices in government procurement, into the revised Public Procurement Act.
• Public-private partnerships
  • Slow approval processes for small projects have reduced the value of public-private partnerships over the last years
  • The Department of Finance is currently addressing this issue by simplifying the approval and compliance requirements for such partnerships

Source:

• https://businesstech.co.za/news/government/618139/government-to-spend-r812-billion-on-more-roads-bridges-and-other-major-projects-in-south-africa/

The post South Africa infrastructure development – Government to increase spending appeared first on InterGest.

Goals of the Electra Mining Africa 2022 Expo

For many companies, the Covid Pandemic meant less exposure – thus the opportunity to showcase new technologies and innovations at this years’ expo was greatly welcomed.

This year’s event aimed to ignite investor relations & export potential and increase investments, effectively highlighting South Africa’s ability to design and manufacture world-class products.

Eric Bruggeman, CEO of the South African Capital and Equipment Export Counsil (SACEEC), said that the SACEEC aims to drive localisation in the manufacturing space, utilising platforms like the Elektra Mining Expo and the Local Southern African Manufacturing Expo as part of their so called “inward buying mission”.

Inward buying and localisation aim to create jobs, drive investor relations and showcase South Africa’s strengths and abilities, thereby strengthening exports and improving the South African economy.

The North-South Corridor

Another element to strengthen exports is the received significant interest in the North-South Corridor (NSC).

The NSC programme was designed as a transit and transport value chain to address transport issues in a sequential and multi-modal manner.  It includes interlinked projects addressing road infrastructure, road transport facilitation, railway system and rail infrastructure management, physical and operational improvements at border crossings, port infrastructure, air transport management and energy interconnections.

The Electra Mining Innovation Awards

On the evening of the 9^th of September, the Electra Mining Innovation Awards took place. In this ceremony, the SACEEC engaged with international delegates from countries around the world including the Netherlands, Russia, Peru, Chile and Ecuador. Additionally to these international participants, African countries including Zambia, the Democratic Republic of Congo, Ghana and Kenya have expressed interest in participating in upcoming trade expos in South Africa.

Challenges

The manufacturing and export sectors of South Africa are facing a number of challenges that, according to Bruggeman, need to be addressed urgently.

Local manufacturers need a constant supply of power to maintain machinery uptime. Currently, South Africa is experiencing between 2 and 6 hours of downtime a day. To combat this, the planned solar and wind energy projects should be fast tracked.

Bruggeman added that the state of the countries ports and transport infrastructure needs to be further improved to be able to fully exploit the export potentials. According to him, South African ports need to be properly maintained and upgraded to give potential investors and international customers the assurance that products will arrive at their destination on time and intact.

A further challenge is the availability of well-priced raw materials. Through recycling and reusing, the country should be able to cater for most manufacturers’ raw material requirements without the need to import. The method of recycling and reusing will also facilitate an increase in jobs, upskilling of workers and a decrease of manufacturing turnaround times.

Opportunities in South Africa – The South African Steel and Metal Fabrication Master Plan 1.0

To combat the forementioned challenges, the Department of Trade, Industry and Competition (DTIC) together with industry stakeholders and government facilitators, have set the foundation for the so-called “South African Steel and Metal Fabrication Master Plan 1.0”. 

It is estimated that, through the plan, about 200.000 tonnes and up to 500.000 tonnes of imported final products could be replaced. This would create approximately 800 direct jobs and add about ZAR 7 billion to the countries’ GDP.

Lately, imports in the manufacturing and automotive sectors have seen their market share grow. According to Bruggeman, the current focus should be on the construction, automotive and mining industries’ manufacturing space. He sees this as essential pillar in the development of the steel and engineering industry. He believes that export and manufacturing are an essential part of the countries’ future and emphasized that while the Master Plan is still in the early stages, it should not simply remain a plan, but action needs to be taken to reach the next level of implementation soon.

Source:

• https://www.engineeringnews.co.za/article/manufacturers-must-increase-export-potential-export-council-2022-09-09

The post Opportunities in South Africa showcased at Electra Mining Expo 2022 appeared first on InterGest.

A total of 276 new infrastructure projects were announced by the president at the Sustainable Infrastructure Development Symposium (SIDS), of which 50 were ready to be constructed. In addition to these 50 SIDS projects, 12 additional special projects have also been financed. From the 276 projects announced by South Africa’s President Rhamaposa in June 2020, 62 of the projects are funded by the private sector.

The projects include water supply and sanitation (R106 billion), 15 projects in the transport sector (R48 billion), and an emergency power programme to provide up to 2,000 MW of additional generation capacity from independent power producers.

The new projects are expected to be approved within 56 days instead of the 18-36 months normally required for projects of this size. South Africa hopes that an infrastructure-led recovery will lift the country out of the Covid 19 crisis. The projects will further improve the opportunities for further investments into South Africa, while also benefiting from improved logistical routes and a higher supply of electricity and water.

Source:

News24 – https://www.news24.com/fin24/economy/south-africa/govt-wants-62-projects-to-take-off-in-3-months-how-will-it-keep-tight-controls-on-corruption-20200728

SÜDAFRIKA BAUWESEN: R360 MILLIARDEN FÜR 62 INFRASTRUKTURPROJEKTE BEREITGESTELLT

Die südafrikanische Regierung hat angekündigt, dass der Bau von 62 Infrastrukturprojekten im Wert von R360 Milliarden zwischen August und Oktober 2020 beginnen soll.

Insgesamt 276 neue Infrastrukturprojekte wurden vom Präsidenten auf dem Sustainable Infrastructure Development Symposium (SIDS) angekündigt, von denen 50 baureif sind. Zusätzlich zu diesen 50 SIDS-Projekten wurden auch 12 weitere Sonderprojekte finanziert. Von den 276 Projekten, die der südafrikanische Präsident Rhamaposa im Juni 2020 angekündigt hat, werden 62 Projekte vom Privatsektor finanziert.

Die Projekte umfassen Wasserversorgung und Abwasserentsorgung (R106 Milliarden), 15 Projekte im Verkehrssektor (R48 Milliarden) und ein Notstromprogramm zur Bereitstellung von bis zu 2.000 MW zusätzlicher Erzeugungskapazität von unabhängigen Stromerzeugern.

Es wird erwartet, dass die neuen Projekte innerhalb von 56 Tagen genehmigt werden, anstatt der 18-36 Monate, die normalerweise für Projekte dieser Größe erforderlich sind. Südafrika hofft, dass eine von der Infrastruktur getragene Erholung das Land aus der Covid-19-Krise herausführen wird. Die Projekte werden die Möglichkeiten für weitere Investitionen in Südafrika weiter verbessern und gleichzeitig von verbesserten logistischen Wegen und einer höheren Strom- und Wasserversorgung profitieren.

Quelle: News24 – https://www.news24.com/fin24/economy/south-africa/govt-wants-62-projects-to-take-off-in-3-months-how-will-it-keep-tight-controls-on-corruption-20200728

The post SOUTH AFRICA CONSTRUCTION: R360 BILLION PROVIDED FOR 62 INFRASTRUCTURE PROJECTS appeared first on InterGest.

Kenia ist derzeit dabei, seine logistischen Routen drastisch zu verbessern, indem es mit dem Bau neuer Autobahn- und Straßenprojekte beginnt.

Eines dieser Projekte ist der 460 km lange Coastline Transnational Highway (Transnationale Küstenautobahn), mit dessen Bau auf kenianischer Seite die kenianische National Highway Authority (KenHA) offiziell begonnen hat. Das Projekt der Transnationalen Küstenautobahn, das auch als ostafrikanisches Entwicklungsprojekt für den Küstenkorridor bekannt ist, umfasst Lunga Lunga-Mombasa-Mtwapa-Malindi in Kenia und Bagamoyo-Tanga-Horohoro in Tansania.

Das Projekt wird den Straßentransport entlang der kenianischen und tansanischen Küste stark verbessern. Es soll die regionale Integration zwischen den beiden Ländern vorantreiben, den grenzüberschreitenden Handel erleichtern und die sozioökonomische Entwicklung der Regionen fördern. Es wird voraussichtlich 751 Millionen US-Dollar kosten und von der AfDB und den Regierungen von Kenia und Tansania zu 70% bzw. 30% finanziert werden. Im vergangenen Jahr genehmigte die AfDB ein Finanzierungspaket von 384,22 Mio. US-Dollar für das Projekt, einige Monate nachdem die EU der kenianischen Regierung einen Zuschuss von 33,41 Mio. US-Dollar gewährt hatte.

Ein weiteres aktuelles Projekt ist das Western Bypass-Projekt.

Der Bau des Western Bypass (Westumgehung) im Wert von 168 Mio. US-Dollar hat laut KenHa und dem Verkehrsministerium ebenfalls begonnen. Das Projekt ist der vierte und letzte Ring der Ringstraßen von Nairobi.

Das Bypass-Projekt wird in Gitaru im Bezirk Kiambu beginnen, in Ruaka enden und über eine vierspurige Schnellstraße mit einer Gesamtlänge von 16,79 km und sieben Anschlussstellen in Lower Kabete, Gitaru, Ndenderu, Ruaka, Wanginge, Rumingi und Kihara verfügen. Das Projekt wird außerdem Lärmschutzwände in allen Siedlungsgebieten, elf Verkehrsbrücken und Fußgängerunterführungen, getrennte Fuß- und Radwege sowie Fußgängerschutzwände umfassen. Umleitungen werden entlang der Bautrasse gepflastert sein, um einen reibungslosen Verkehrsfluss zu gewährleisten.

Der Abschluss des Projekts soll in einem Zeitraum von 39 Monaten stattfinden. Nach der Fertigstellung soll das Projekt die Verkehrsstaus um Nairobi verringern, ein schnelles Wirtschaftswachstum in den straßennahen Gebieten und einen reibungslosen Verkehrsfluss in dem Gebiet gewährleisten. Darüber hinaus werden an allen wichtigen bestehenden Handelszentren und Siedlungsgebieten werden angemessene Busparkplätze eingerichtet, um die Effizienz des öffentlichen Verkehrs zu erhöhen.

__________________________________________________________________________________

CONSTRUCTION OF ROADS IN KENYA LEADS TO IMPROVED LOGISTIC ROUTES

Kenya is currently in the process of drastically improving its logistical routes by starting to build new motorway and road projects.

One of these projects is the 460 km long Coastline Transnational Highway, which the Kenyan National Highway Authority (KenHA) has officially begun building on the Kenyan side. The Transnational Coastal Highway Project, also known as the East African Coastal Corridor Development Project, includes Lunga Lunga-Mombasa-Mtwapa-Malindi in Kenya and Bagamoyo-Tanga-Horohoro in Tanzania.

The project will greatly improve road transport along the Kenyan and Tanzanian coastal lines. It will promote regional integration between the two countries, facilitate cross-border trade and foster the socio-economic development of the regions. The projects are expected to cost USD 751 million and will be financed by the African Development Bank (AfDB) and the governments of Kenya and Tanzania, having agreed at a 70% and 30% respectively. In 2019, the AfDB approved a US$384.22 million financing package for the project, shortly after the EU granted the Kenyan government a US$33.41 million grant.

Another project currently underway in Kenya is the Western Bypass Project.

According to KenHa and the Ministry of Transport, the construction of the Western Bypass worth US$168 million. The project is the fourth one of its kind and also said to be the last ring road of the Nairobi ring roads.

It has been reported that the bypass project will start in Gitaru in Kiambu district of Kenya, and will end in Ruaka. The bypass will have a four-lane highway with a total length of 16.79 km and seven junctions in Lower Kabete, Gitaru, Ndenderu, Ruaka, Wanginge, Rumingi and Kihara. It will also include noise barriers in all settlement areas, eleven traffic bridges and pedestrian underpasses, separate pedestrian cycle paths and pedestrian barriers. In addition to this, the project also plans to have detour paths paved along the construction route to ensure a smooth traffic flow.

The project is expected to be completed within 39 months. Once the Western Bypass project is completed, it should assist in reducing the current congestion issues being experienced in and around Nairobi. The additional roads will  play a vital role in ensuring rapid economic growth in the road areas and smooth traffic flow in the area. In addition, adequate bus parking will be provided at all major existing commercial centres and settlement areas to increase the efficiency of public transport.

Quellen/Source:

Constructionreview

Expogroup

The post STRASSENBAU IN KENIA FÜHRT ZU STARK VERBESSERTEN LOGISTISCHEN ROUTEN appeared first on InterGest.