Summary
Africa is commonly regarded as a continent on which economic development lags behind much of the rest of the world, but in reality several key industries are experiencing strong growth. That, however, does not mean all potential progress is being tapped. Despite healthy growth in areas such as agriculture, retail, mining and banking, much remains to be done which could improve upon recent performances. Despite barriers substantial progress is being made. A pan-African free trade deal offers long-term gains, and there are solutions governments can pursue to cement recent growth into a lasting trend. Growth of key industries, for the time being at least, is being underpinned by improving business conditions.
Key Highlights
- Agriculture will remain a leading growth industry for Africa due to the high number of people who work in it. Across Sub-Saharan Africa approximately 60% of the working population are involved in agriculture, meaning the increased incorporation of pioneering technology into the industry is essential. Yet despite progress the continent continues to lag behind. Troubled by allegations of extensive corruption that extend to the very top of several governments, the ability of the continent to undertake meaningful change in the agricultural industry has continued to be hampered. However, technology is driving progress forward. Cheap tech solutions to problems are becoming more readily available, helping to bring about rising productivity despite the looming issues caused by global climate change which are likely to have an abnormally large impact on those farming lands in countries experiencing encroachment from the expanding Sahara desert.
- Mining has been a valuable industry to the African continent ever since South Africa became renowned for producing most of the global supply of diamonds before alternative sites were found. Illegality and poor governance has historically hampered development, enabling vast wealth and resources to be fritted away or leave the host country altogether. Recent performances have been good. In 2018 the Ministry of Energy announced 35 million tons of minerals and precious metals had been mined the year before, generating MAD56.5bn ($5.9bn) in revenue. Other countries in Africa have not performed nearly as well regarding production of gold as Tanzania has done lately. Yet there are serious problems hampering growth. Solve them and the industry could grow somewhat swifter than it has historically.
- Mobile phone banking is traditionally associated with wealthy nations and the emerging superpower that is China, yet in Nairobi, Kenya paying for a taxi is easier than is in New York. Sophisticated mobile phones are not required, either. Mobile phones are expected to continue to fuel growth in banking thanks to the continent being home to over half of global mobile money services. Due to the now widespread availability of cheap mobile phones, large swathes of the population are gaining access where none were previously on offer. Developments here are helping move the informal economy closer to the formal economy. Banking has been possibly the most receptive service industry to the informal economy, taking advantage of technology to create products which are usable by people outside of the formal economy, frequently with limited education or resources such as internet connection.
Scope
- Looks at the role of government in shaping industry
- Examines the development of agriculture and the challenges of keeping expansion going
- Assesses the growth of mining and how governments can capitalize on growth
- Examines the expansion of banking services and African solutions to financial problems
- Looks at the development of domestic retail as a leading growth industry
Reasons to buy
- How will banking develop across Africa?
- Will mining produce the desired economic benefits?
- Can agriculture continue growth despite climate change?
- Can governments adapt to changing economic conditions?
- How will retail grow in a low-margin environment?
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Table of Contents
1. EXECUTIVE SUMMARY
1.1. Agriculture is a fast growing industry in Africa but requires change to expand further
1.2. African mining is providing widespread growth but industry can perform better in future
1.3. Banking is now a key growth industry in Africa as long-term prospects improve
1.4. African retail growth is promising but would perform better following reform
1.5. Realizing growth opportunities in Africa demand governments improve administration
2. AGRICULTURE IS A FAST GROWING INDUSTRY IN AFRICA BUT REQUIRES CHANGE TO EXPAND FURTHER
2.1. Expansion in agriculture is attracting investors, helping to expand key growth industry
2.2. Technology is becoming increasingly relevant to farmers in Africa
2.3. Government policy will play important role in sustaining agricultural growth
2.4. Introduction of insurance to African agriculture could help drive long-term growth
3. AFRICAN MINING IS PROVIDING WIDESPREAD GROWTH BUT INDUSTRY CAN PERFORM BETTER IN FUTURE
3.1. Moroccan mining industry performance suggests growth will be lasting trend
3.2. Tanzanian gold could be lasting hit on international markets but governance must improve to make it happen
3.3. Namibia has substantial potential to grow mining sector but must utilize resources wisely to succeed
3.4. Ghanaian gold mining industry could grow swiftly if efforts to solve fundamental issues are successful
4. BANKING IS NOW A KEY GROWTH INDUSTRY IN AFRICA AS LONG-TERM PROSPECTS IMPROVE
4.1. Mobile banking has transformed access to financial services, ensuring growth will sustain for a while to come
4.2. Developments in traditional banking is ramping up competition, inciting growth from informal economy
4.3. Pan-Africa banking is developing, helping progress towards models common in advanced economies
4.4. Challenger banks are innovating faster than established rivals, beckoning growth
5. AFRICAN RETAIL GROWTH IS PROMISING BUT WOULD PERFORM BETTER FOLLOWING REFORM
5.1.1. Online retail is expanding but African solutions to problems must be found to attain higher growth rates
5.2. Expanding access to technology is helping to improve e-commerce growth
5.3. Presence of major international retailers is boosting competition, helping to sustain growth
5.4. Fashion retail is growing as consumer cultures develop in leading African economies
6. REALIZING GROWTH OPPORTUNITIES IN AFRICA DEMAND GOVERNMENTS IMPROVE ADMINISTRATION
6.1. Improving free trade across African continent will be essential to achieve lasting growth
6.2. Formalizing the informal economy would help African countries to capitalize on growth
6.3. Taking advantage of rising Chinese interest in Africa will be important but also presents problems
6.4. Tackling corruption is essential if growth industries are to prosper on international stage
7. APPENDIX
7.1. Abbreviations and acronyms
7.2. Sources
7.3. Further reading
8. ASK THE ANALYST
9. ABOUT MARKETLINE
List of Figures
Figure 1: The Food and Agriculture Organisation (FAO)
Figure 2: Aeroview
Figure 3: Malawi sustainable farming
Figure 4: EcoFarmer
Figure 5: Main phosphate basins in Morocco
Figure 6: Investment Attractiveness Index-Africa, 2018
Figure 7: Buzwagi mine, Tanzania
Figure 8: Illegal gold mining operations in Ghana, 2014
Figure 9: M-PESA revenue (Kshbn) 2013 to 2018
Figure 10: Spaza store in South Africa
Figure 11: M-PESA
Figure 12: Bank Zero
Figure 13: Online retail spend (Rbn) 2013 to 2017, 2018 to 2023 estimated
Figure 14: Virtual Card, Standard Bank
Figure 15: Jumia
Figure 16: South Africa apparel value ($bn) 2011 to 2018
Figure 17: GDP growth of Sub-Saharan Africa 2009 to 2017 (%)
Figure 18: Proportion of products sold informally on Nigerian streets, 2015
Figure 19: Scale of Chinese money flowing into Africa
