Emerging markets: Africa
It is impossible to ignore the continuing terror threats, incidents and political instability in Africa, particularly in the northern countries of Tunisia, Morocco and Egypt. And with tour operator Thompson recently cancelling all summer travel to Tunisia, it should come as no surprise that with the addition of that the Ebola epidemic in West Africa, which is still suffering 'flare-ups' of the deadly disease; and the South African Rand dropping significantly due a number of economic factors, Africa doesn't seem like an obvious choice for an emerging market... But there are some countries in this vast continent that are causing a stir in the business world... Here we take a look at the countries welcoming business opportunities and growth and why you should keep an eye on them.
West African markets: Ghana and Nigeria
With high-profile visits from the likes of US President Obama and the International Monetary Fund, along with a burgeoning business market Ghana is one to watch. While its proximity to Burkina Faso may not be politically appealing in light of recent news, it has a rising middle class, a draw to develop hospitality and leisure industries, as well as tourism travel and commercial flight operators.
Equally, Nigeria is not without its share of complexities politically but in terms of business, its capital Lagos is estimated to be one of Africa's top business destinations. With a large number of businesses and industrial companies, as well as luxury hotels, the high numbers of business tycoons who live in Victoria Island are amongst the 70% of new Nigerian business owners that target the capital*. A huge population of 20 million and the commercial mind-set of the city make this city one to consider for new business development.
East African opportunities: Tanzania and Kenya
With an estimated GDP of $69.97 billion†, the Nairobi stock exchange in Kenya is one of the largest in Africa. Its developed markets include construction, machinery, and finished products, as well as mining and agriculture products, which make up the bulk of their international exports. Pharmaceutical company Pfizer, the World Bank and Sage Group all operate their African headquarters in Nairobi.
In Tanzania, newly elected president Mr Magufuli has been cutting back on irresponsible spending and instead focusing efforts on extracting and using an estimated 50.5 trillion cubic feet*** of untapped off-shore liquefied natural gas (LNG). Is now the time to make the most of this business opportunity either in direct trade, travel or infrastructure development? If the Tanzanian government has their way, the market could open up in a huge way.
Travel to East Africa has also expanded and become much easier – and with the likes of low-cost airline Fastjet offering new flight routes between Nairobi, Dar Es Salaam, Johannesburg and Victoria Falls, affordable business travel is now a viable option.
5 reasons why Africa is a real contender as an emerging economy
1. African markets are complex, but developing positively. In the past 10 years, Africa’s economic growth has surpassed that of East Asia, and between 2002 and 2012 was the 2nd fastest in the world, with 5.1% growth‡.
2. Christine Legarde’s visit to Africa at the beginning of 2016 is a reassuring sign of support from the International Monetary Fund, while China’s investment and role as a key exporter, though slowed, is still strong.
3. There's an abundance of untapped natural resources including 60% of the world’s unused cropland§.
4. By 2035, Africa is expected to experience a ‘demographic dividend’** when its young and growing labour force will have fewer children and retired people, as well as an continued growth in mobility and demand among higher education studentstt encouraging the rise of a skilled and large workforce.
5. And lastly, a growing consumer class will increasingly be able to direct their spending towards discretionary spending rather than necessities.
In conclusion, the African market is complicated, diverse but most importantly, growing. The emerging markets produced as a result of continuing stability and growth in Sub-Saharan Africa, and the more established markets in East Africa offer a wealth of natural resources as yet un-utilised and a rapidly growing educated workforce. The economic growth of the past 10 years is projected to only grow further and will offer a market in which business travel will flourish. Be that hotel management, construction, technology, travel management, export and import of goods, Africa is definitely of relevance in the business travel world in 2016.
New and emerging markets can be complex to navigate however, so travel support can be required. Having over 25 years experiences in business travel, we at CTM specialise in enabling you to make the most of new business opportunities with our expert travel knowledge, support, and award-winning travel technology.
To find out more about how CTM can help you with your business travel and ventures into new markets this year, visit www.ctm.travel, email: firstname.lastname@example.org or call 0845 470 8702.
Sources: *Nigerian Bulletin, September 2015; †The International Monetary Fund, January 2015; ‡African Economic Outlook 2015; **Bloomberg Business, April 2015; tt ICEF Monitor, September 2014; ***BBC World Location News, October 2015