Dueling with Lions – Playing the New Game of Business Success in Africa: BCG (Report)

From a business perspective, Africa is at an inflection point. Local African companies have made investments and have expanded their offerings, in many cases taking business away from multinational incumbents. The multinationals are rethinking their positions on the continent and contemplating additional investments of their own. There’s a little bit of a chess match going on, as both sets of players look into the future and try to figure out which strategies to pursue.

Even now, as low oil prices threaten the continent’s energy exports, Africa’s long-term positives are too big to overlook. Population growth and higher household incomes have helped lift Africa’s GDP by more than 5% a year on average for the past 15 years. In addition, the Africa of today is more politically stable, with over half the 54 countries on the continent now holding democratic elections, compared with fewer than ten in 1990. As a result, foreign companies and governments have dramatically boosted their investments in certain parts of the continent: foreign direct investment in sub-Saharan Africa increased by a factor of five from 2001 to 2012.

Demographics are also working in Africa’s favor. The continent has a sizable working-age population; within a few decades the proportion of Africans in the workforce will exceed that of Europeans and Asians in their respective regions, according to the United Nations. People across Africa are also more educated and more connected to information sources than ever, with mobile phone and Internet use growing rapidly.

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Source: BCG Perspectives


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