Two Phenomena That Will Positively Impact your Growth Across Africa
December 5, 2023 – One of the first things businesses encounter when they get on the ground in any country across Africa is that country borders do not necessarily mirror to market boundaries.
They quickly realize that a market can be defined as any of the following:
Continent (Africa)
Region (East Africa)
Country (Kenya)
Trade corridor (the port of Mombasa in Kenya, to the capital Nairobi and on to Kampala in Uganda, and to Juba, South Sudan)
Urban corridor (everything within a 60- to 100-kilometer radius of Nairobi)
City (Nairobi)
It is these last two, urban and city corridors, that offer a concentrated and rapidly increasing growth for businesses looking to set up successful operations in Africa because per capita consumption in Africa’s largest cities is nearly double the average of the country as a whole.
Africa’s Growth is Found in Cities
By 2030, over half of the continent’s population will be concentrated in only 7 countries: Democratic Republic of Congo (DRC), Egypt, Ethiopia, Kenya, Nigeria, South Africa, and Tanzania.
According to the United Nations, by 2030 there will be 6 cities with a population of at least 10 million people: Cairo, Egypt; Dar es Salaam, Tanzania; Johannesburg, South Africa; Kinshasa, DRCongo; Lagos, Nigeria; and Luanda, Angola. That’s the same size London and New York City will be in 2030!
More than 80% of Africa’s population growth over the next few decades will occur in cities, making it the fastest urbanizing region in the world.
Africa’s cities will double in population by 2050. (Source: “Africa Open for Business” by Dr. Deanne De Vries)
Urbanization is a powerful driver of business opportunities, as well as sustainability, economic development, and efficiencies—if planned for and executed properly. The rapid pace at which African cities are growing offers untold and unmet opportunities for consumer goods for services, like hairdressing and car repair, as well as education and healthcare, also free-time activities like gyms, restaurants, cafes, parks, and amusement parks.
The Corridor Approach
A second way to look at markets is the corridor approach, i.e., corridors of people and trade. These are often regional and based on linguistic, cultural, economic, or historical links. They often serve landlocked countries.
For example, an East Africa corridor starts with Kenya’s Mombasa port, which is the main port of entry for the landlocked countries of Burundi, Rwanda, South Sudan, and Uganda, even the eastern parts of the DRC.
Further south, the port of Nacala in Mozambique is the entry point for the landlocked countries of Malawi and Zambia, sometimes even southern Tanzania and also the eastern part of the DRC. It is quicker to go from Nacala, Mozambique, to Ndola in east DRC than going from DRC’s capital, Kinshasa, in the west of the country (from Nacala to Ndola, it’s only 1,900 kilometers; from Kinshasa to Ndola, 2,550 kilometers).
Corridors can also attract more manufacturing, thus sharing the benefits and creating more jobs. An example is Volkswagen in East Africa. They have a manufacturing plant in Kigali, Rwanda, which is viewed as a regional manufacturing plant, and the goal is for each country in East Africa to supply different parts to the manufacturing plant.
If you’d like to discuss some more about how a cities or corridor approach can exponentially impact your growth strategy across the continent
Reach out via drdeannedevries@icloud.com for a virtual coffee
Read more about cities and corridors in Chapter 6 of my book Africa: Open for Business
Photo: Nairobi’s Westlands Mall