Africa Brief: African growth offers wide opportunity, network upgrades drive electronic test equipment and more…
Analysis: African growth offers wide opportunity consumer goods firms to SA
The growing populations and economies of Africa allow South Africa to increase their returns faster if they supply products to Africa. Factors that affect this are increases in urbanization and GDP. However doing business in African countries will be complex. These markets are growing and if South Africa can capture this they will be able to grow their returns faster.
Poverty in African countries is still high so providing necessities should be the main focus point. However some companies trying to enter countries have faced difficulties in market penetration. SABMiller and Shoprite have been able to expand their presence. In Nigeria alcohol companies have 11% of the Nigerian stock exchange. According to a study Nigeria is Africa’s largest consumer of alcohol.
As GDP increases people will start moving into branded products. However people must be aware that many African countries still make use of informal trade. Furthermore many already have establishes supermarkets such as Kenya. Nigeria makes use of a lot of informal trade however this is starting to change. Many people say it will be beneficial for South Africa to partner with companies in the various African countries. Experience and patience is key in unlocking these markets.
by Nompumelelo Magwaza published in The Star, Business Report on 06/06/2014
Network upgrades drive electronic test equipment market in Africa
The demand for electronic test equipment is increasing due to efforts by the industry to widen coverage across Africa. South Africa will benefit with the roll out of the Independent Communications Authority of SA with their 4G networks. The consolidation of the telecoms market will provide a more effective and cost efficient service to consumers. It is said that market participants should roll out comprehensive test equipment with multiple functionalities to cater for the needs of research of PhD students. However the poor economic condition and unstable currency in South Africa is delaying projects and slowing down the growth in the market.
by Ayanda Mdluli published in The Star, Business Report on 06/06/2014
Aviation: SAA targets Ghana for hub
SAA planned to meet with Ethiopian Airlines to consider plans to establish a hub in West Africa. They initially wanted to team up with Senegal in order to compete with Ethiopian and Kenyan airlines however this was not commercially viable.
by Bloomberg published in The Star, Business Report on 06/06/2014
Nigeria: Stability is key- new governor
Nigeria’s central bank governor pledged to keep the currency stable. Further he said they will pursue a gradual reduction in interest rates. He was appointed to replace Sansui after he was accused of financial recklessness.
Excerpt from Nigeria: Stability is key – new governor, published in The Star, Business Report on 06/06/2014
MTN: Ivory Coast revamp costs R2.7bn
MTN is planning on spending billions to upgrade its network in the Ivory Coast. MTN is the second largest operator in the Ivory Coast with a market share of 37%. They wish to increase this to 40% by the network upgrade. Out of a population of 24m about 19m are cell phone subscribers.
by Reuters published in The Star, Business Report on 06/06/2014