Development
T This is Why Global Companies Should Enter the African Marke S By Dasha Kroshkina B
Africa Rising IN THE EARLY 2010S, China’s tremendous market size and the world’s largest number of mobileinternet users led many U.S. tech companies to enter the country and offer their services to the Chinese consumers. As technological advancements are introduced nearly every day, more nations embark on a steep modernization course. Rapid growth is creating expanding gaps for brands to fill with their products and services and near-limitless opportunities to achieve success. While there may be several niches and places you can tap into, it is important to select the right market for your business and enter at the right time. When it comes to the education space, Africa holds considerable potential thanks to its growing young demographic and wages, technological advancements and an increasing demand in quality education. Africa’s GDP has been on the rise and is expected to grow by 3.5% in 2022, with Kenya, Nigeria and South Africa among other countries leading the way. This overall positive economic signal has been having an impact on education. In the recent year, we’ve seen an uptick in African students opting in to pursue study abroad programs in construction, engineering and STEM. In general, it’s not surprising that there’s been a growing demand for higher education from African countries. The continent has the youngest population in the world, with 70% of the SubSaharan population under the age of 30. This 38
January-February 2022
demographic dynamic combined with growing salaries presents opportunities to market to this progressive generation, who are willing to spend on quality education and improve their quality of life. Despite the continuous economic growth and opportunities, there’s still a lack of competition from global companies on the African market. Developing infrastructure, expensive and unreliable internet and lack of payment methods were named among the barriers to entry. However, fintech companies and the world’s biggest digital players, such as Google, are betting on Africa with investments in the continent’s digital transformation. While many companies may still hesitate to tap into this market, it’s important to start establishing your presence in Africa now. From a cultural perspective, it takes time to understand the country and create a community that plays a significant role in the lives of the local population. From a business standpoint, it’s beneficial to establish your presence in a low-competition market and then scale fast once the business landscape becomes more advanced. While it requires considerable time, money and energy to be among the pioneers in introducing your business to a new continent, it’s essential to have a growth mindset and view it as an investment into future opportunities. Growing demographic and wages Africa's population as a whole is young and growing. The median age for the continent is 18, which is 14 years younger than any other, and the continent's population is set to double to two billion by 2050. The youthful demographic is considered a major advantage for the continent, with prospects of generating significant GDP growth. Today, more global investors come to Africa for the promise of its people than for its physical properties. Rising wages make up another significant DAWN
www.africabusinessassociation.org
