The last 24 months have been some of the most volatile and unpredictable for several African markets.
From steep currency fluctuations, persistent inflationary pressures and oscillations in consumer expenditure.
There have been multiple unprecedented waves of change that have set in course a series of adjustments in consumer, talent, and financial markets.
The World Bank indicates that 5 of the top 10 African countries shrank in economic output last year compared to the previous period.
Nigeria: 23% from $472bn to $362bn.
South Africa: 2 years in a row, -4% in 2022 vs 2021. And in 2023, it shrank -7% more from $405bn in 2022 to $377bn in 2023.
Egypt: Down 11% from $476bn in 2022 to $424bn last year.
Kenya: Decelerating 5% from $113bn in 2022 to $107bn last year.
Ghana: Though, a slight growth of 2.7% from $74bn to $76bn but still lower than the 2021 output of $79bn.
The impact is felt almost immediately by the households bearing the brunt of sharp fluctuations and the businesses operating amidst heightened uncertainty.
For example, while MTN’s total revenue grew 13% to $12.6bn, its net income plummeted 83% from $418bn to $228 million owing mostly to the adverse effects of the currency devaluation in Nigeria.
So pertinent is the shakiness at the recently held Africa Marketing Confederation, the theme for this year was Brand Resilience amidst economic uncertainty.
My take is that all the chaos not withstanding, it’s not all doom and gloom. The question is, what opportunities do we have? How do we translate them into stability and a growth rebound?
- Our growing population
While about 25% of the World’s population lives in net mortality zones, their death rates have outpaced the birth rates.
At 2.3% a year, Africa’s population growth is more than twice the global average (Worldometer, 2024). The growth of our consumer market is guaranteed for the long term.
Plus, as incomes rise and a middle class emerges, Africa will be exploring new products & services, powering the next frontier of innovation.
- The fast-paced urbanization
By 2030, Worldometer estimates suggest that Africa will have up to 5+ megacities, with upwards of 10 million people.
Lagos, Kinshasa, Dares-Salaam, Cairo, and Addis Ababa will all be bustling with increased investment, more connectivity, and the attractions of modern urban life.
High-density cities bring the advantage of low cost to serve, ready access to high-skilled talent, and the fastest diffusion of innovations—quickly moving from early adoption to a profitable mass.
- The advantage of a strong culture
Compared to any other place in the world, Africa still has some of the strongest anchoring to our tribal, ethnic, and community identities. A strong sense of what we call Ubuntu
And yes, while there are challenges this has presented with regard to the integration and harmony of multi-ethnic countries, there’s just as much upside.
Think about the fact that for example, in the EU, the average number of people per household is 2.1. And guess what it is in Africa—about 4.8 (Africa Geoportal).
Why is this important? The global happiness index that measures and ranks aggregate happiness levels around the world has a very important component called social support.
And in Africa, despite a couple of deviations here and there, we have a lot much stronger social cohesion and integration than anywhere else.
Written by Nicholas Hirya,
A Marketing and Strategy Professional