Sub-Saharan Africa, a gateway to the future
Africa is beginning to position itself as an emerging continent rich in opportunities for both investment and business. The continent is beginning to show its first signs of political and economic recovery and the data point to a century in which Africa is expected to be one of the main players. However, development on the ground remains slow and it is difficult to refer to the continent in terms of consolidation. Battered by internal conflicts and economic and social crises, Africa aims to showcase its potential as a suitable investment ground at the international level.
"Sub-Saharan Africa is the continent of the future". With this statement, the president of the Exporters' Club, Antonio Bonet, began his presentation at the conference organised by Banco Sabadell on business opportunities for Spanish companies in East Africa. In this part of the continent, countries such as Kenya, Mozambique and Tanzania have experienced strong growth and relative macroeconomic stability. The figures encourage the expectation of exponential population growth, with half of the world's population growth expected to take place in Africa by 2050.
Alongside this, the push for the new free trade zone in Africa has facilitated trade exchanges, as well as improving the industrial and infrastructural fabric, which has provided an opportunity to boost continental trade.
However, Bonet affirms that in order to achieve an improvement in trade, it is necessary to "increase institutional presence in the three countries and improve financial instruments". In this regard, Spain's economic and trade advisor in Nairobi, Rocío Kessler, stated that Kenya is "making important efforts to reduce its economic imbalances" in terms of macroeconomic policies, although it continues to face problems related to indebtedness.
Kenya's economic recovery is above the average for sub-Saharan Africa, representing the fourth largest economy in the region, and it is a well-established middle-income economy. In this sense, Kenya's priority is to advance towards industrial development, taking advantage of its key geographical location, with the port of Mombasa. According to Kessler, in recent years the Kenyan country "has experienced a strong boost in infrastructures related to energy, roads, ports, railways and airports", thus representing a "qualitative and quantitative leap".
Kenya's membership of the Eastern African Community (EAC) customs union, with headquarters in Tanzania and a market of more than 150 million inhabitants, is worth mentioning. The president of Arola, Alejandro Arola, stressed that, in this line, Kenya has "customs advantages that give it a very important added value" compared to other countries.
On the other hand, Tanzania is consolidating its position as the second most important market in the region with an average rate of over 6% of GDP. The country's objective is to boost public infrastructure and boost its relations with its East African Community (EAC) neighbours along with donor support. Tanzania is experiencing a new diversification in business opportunities mostly related to chemicals, laboratory reagents and consumer goods.
In addition, the tourism sector is emerging as an opportunity for the country as an investment destination, especially in the Zanzibar and Arusha regions. Similarly, the electricity sector is emerging as an important competitive advantage.
Mozambique is another country in the eastern region that is emerging as a nation with strong investment potential. In this regard, Mozambique has managed to stabilise its prices, but still faces major challenges related to balance of payments equilibrium, hidden debts and public finances. In addition, there are great dualities in society and the consequences of the Mozambican civil war and the continuous terrorist attacks related to jihadism continue to be felt.
In this regard, Diego Boter affirms that "gas exploitation should be one of the main resources that the country should take advantage of", taking Angola as an example, as well as the exploitation of fuel, fossil fuels, aluminium and derivatives. These new opportunities are being seized by countries such as China, France and South Africa. However, Spanish exporters remain comparatively "small players in industry and technology".
With continued GDP growth in recent years and increasing foreign investment, Africa is expected to have three of the world's ten most populous megacities within 30 years. In this regard, the youth population is expected to be the key sector leading these changes, but this will be of little use if political tensions and internal conflicts continue. Proper management focused on overcoming transport inefficiencies is needed, along with food security, land management and energy supply.
To overcome these challenges, in addition to the necessary international investment, Africa needs effective governance to do so. African soil is rich and opportunities continue to emerge, charting the way to new investment opportunities that promise to place Africa among the world's powerhouses.
These junctures remain and Africa is rich in resources and demographics, now is the time when, depending on the use of governance and policy, the continent will position itself as an enclave for new investment opportunities that directly affect African development.
