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Africa, your engine of growth

What does the 4th Industrial revolution mean for African businesses?
Technology is core to the 4th industrial revolution. It will also be at the heart of Africa’s growth in the next decade.  The broader consequences to the African continent of these advances are greater automation, doing more with less, and economies which are net exporters of commodities looking to leverage more advanced robotics in the extraction and use of commodities.

With this threat to employment, many African CEOs are equally concerned about the impact to their workforce as well as sustaining returns to investors against a complex economic backdrop.

China, following the 4th quarter decline in growth, remains a big discussion topic on the ground in Davos. For Africa, from 2010-2015 we saw a 22% growth in foreign direct investment. In 2016 we expect a net outflow of FDR.  While the Chinese economic slowdown in unwelcome news it is not unexpected.

Angola and Nigeria as big oil producing nations have been affected by the reduction of oil price and with much of the African economy built on agriculture the changing weather patterns have definitely impacted crop and livestock farming. And finally depleting currency reserves are not making it easy for African countries to import technological solutions.

What are the CEOs you meet in Davos saying about Africa?

CEOs here in Davos remain confident about significant opportunities in Africa, particularly for goods and services. Banking, Insurance and related tech industries will continue to leverage the low cost of delivery. For Retail, Africa’s appetite for product continues to exponentially grow. Large retailers are building their presence – the winners will be those organizations that get their supply chain working to overcome cross border trade obstacles and innovate to meet the particular needs of African customers. 

More information can be found in the “KPMG Africa business guide” 

About author:

Trevor Hoole joined KPMG in 1975 and has been a partner in the Financial Services group since 1994. He has had extensive banking experience, with specific emphasis on risk management, treasury, credit, investment banking, group audits and asset based financing entities. He also has due diligence and structured financing experience as well as significant exposure to the retail banking sector, particularly in the home loan and credit card arenas.

David Okwara

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