Dubai Chamber study highlights opportunities in Sub-Saharan Africa

Ahead of the 2nd Africa Global Business Forum (AGBF) this October, the Dubai Chamber of Commerce and Industry, in collaboration with the Economist Intelligence Unit (EIU), has developed a detailed study highlighting economic and investment potential in Sub-Saharan Africa and its potential to become the world’s fastest growing region.
Hamad Buamim, president and CEO, Dubai Chamber, said that the Chamber always strives to provide companies and investors with access to studies and research that will help them take informed investment decisions in target markets, namely the African market where the future of business is very promising.
He also highlighted that the increase in economic reforms, rising fiscal spending and ties with fast growing economies in Asia are the main factors supporting the economy in Sub-Saharan Africa adding that the AGBF will shed a light on the economic and investment realities in Africa and will give business leaders and decision-makers from Africa, Dubai and the wider GCC region an ideal platform to discuss business partnerships and opportunities.
Also, challenges, opportunities and cooperation with African companies will be discussed further by leaders and businessmen attending AGBF in October, he said.
Buamim stressed that this study is one in a series of studies on Africa developed by the Chamber, and is aimed at introducing businesses to investment opportunities available in the continent.
The study says that Africa holds 60 percent of the world’s uncultivated arable land, but remains a net importer of several food products as well as processed foods. Encouraging growth in domestic production and reducing reliance on imports is a key goal to governments and investors.
It states that investment opportunities are particularly significant in the telecoms sector. Although there are over half a billion mobile subscribers, most countries are still far from saturation and internet access is still almost non-existent in many countries.
The study emphasizes that with the emergence of middle class, formal retail is starting to develop, offering “value” products aimed at lower income customers while infrastructure needs are enormous, with an estimated $ 100 billion a year required by the power sector alone.
Focusing on Angola, the study states that high oil prices and increased production are forecast to keep the budget in surplus, with average real GDP expected to grow by 6.7 percent up to 2017 as foreign direct investments (FDI) inflows have increased in the past few years ($15 billion) mainly in the energy sector.
On South Africa, the study states that the country’s business environment is among the most advanced in Sub-Saharan Africa and the private sector is well-established. Banking is well-developed and traditional mobile phone market has reached saturation point. The country remains a key destination for nonoil FDI, which exceeded $5 billion.
The study has ranked the market opportunities as moderate. Expansion of low-cost housing and welfare will boost demand for consumer durables.
Nigeria is a strong destination for investments in telecoms and retail due to the large population (20 percent of the Sub-Saharan population). It is also a key market to multinationals.
Ghana offers a relatively business-friendly environment, however poor infrastructure remains a major obstacle. Gold and cocoa are the dominant source of exports. On Tanzania, the study states that tourism is a vital source of revenue and the economy remains dependent on agriculture and mining.
Mining is the largest source of FDI followed by telecoms and construction. Agriculture has also been targeted by the government as a source of future FDI.
The study states that Kenya’s economy has developed into a market-led hub for East Africa’s telecoms, retail and tourism sectors.