The Angolan consumer story
The rise of the Angolan economy, over the past 10 years, has been nothing short of spectacular. From an economy plagued by hyperinflation and suffering from the consequences of decades of civil war in the early 2000s; today, the southern African economy is one of the fastest growing in the world and continues to attract billions of dollars in foreign investment.
Robust economic growth and the resultant escalation in GDP per capital have led to a consumer boom in recent years, and consumers are well positioned to continue benefiting from high oil sector earnings.
Angola has a relatively high urbanisation rate, estimated at 58.4% in 2010 and projected to increase strongly to 68% by 2025.
Its population size is the smallest in the focus group of nine countries (from the Africa Consumer Story paper), but its population growth rate is still relatively high at a projected average of 2.7% per annum during 2011-15, second only to Tanzania’s 3.1%. As a result, the population size, which was roughly equal to 19.6 million in 2011, is expected to be close to 25 million by the end of this decade, and more than 30 million by 2030.
Angola’s dependency ratio is still quite high, estimated at 96.3 dependents per 100 working- age people in 2010, due to the large number of children in the population. This will slowly change though as more people move into the working-age category.
Retail sector snapshot
The retail sector in Angola is still very under-developed. Formal retail in the grocery segment accounts for only around 5% of the total. Product categories that are poised to perform well over the next number of years include various food items, and beer.
Angola’s per capital beer consumption is relatively high in an African context at around 45 litres per annum, but there still remains scope to increase this further. A key stumbling block in unlocking the country’s potential is inhibitive government policies. For example, in 2006 the government restricted small retail businesses to Angolan citizens. Foreigner investors are however allowed to build large supermarkets and shopping malls in the country, but in this, they are restricted by the limited availability of land.
For this reason, property rental rates in Angola are extremely high, and the city is among the most expensive in which to live in the world. Knight Frank estimates Angola’s prime retail rent at $100/m2 per month, compared to $45/m2 in Cape Town and Lagos. Belas Shopping Mall opened in 2007 as the country’s first modern shopping centre, anchored by South African retailer Shoprite.
Over the course of the next few weeks, we will continue to profile the 9 countries featured in Africa Consumer Story paper… Read more on demographics and overall spending trends here…