- POSTED: 02 Sep 2014 23:29
- UPDATED: 03 Sep 2014 03:52
Africa is a region racked by negative headlines, from Boko Haram insurgency to the Ebola virus. But business leaders in the region have spoken out in defence of the continent, pointing to the massive growth potential of the consumer market there.
SINGAPORE: Africa is a region racked by negative headlines, from Boko Haram insurgency to the Ebola virus. But business leaders in the region have spoken out in defence of the continent, pointing to the massive growth potential of the consumer market there.
The World Bank said consumer spending accounts for over 60 per cent of Africa's GDP and the figure is forecast to grow some 4 per cent a year.
Whether it's food, health care, telecoms or hospitality, the massive potential of the African consumer is emerging, and it has not gone unnoticed, said Group Executive Director of Standard Chartered Bank, V Shankar.
He said: "There is a euphoria today about Africa - what I like to call 'Afra-phoria'. You can see Indian companies, Chinese companies, Korean companies and Western multinationals as well all over Africa. And you can see very, very visible progress there."
Almost half of Sub-Saharan Africa's total population live on less than US$1.25 a day. But this does not mean the African consumer will accept products that are not world-class.
"People tend to think that if you sell something that is substandard, you can get away with it. Well, the consumer is like your mother and my mother. Consumers look at the price of a product, the value, and if they don't think it's value for money, they're rational, they'll move on," said Peter Matlare, CEO of Tiger Brands, a consumer goods giant operating in 22 African countries. "Consumers in those markets may try something, but if it disappoints them, don't expect them to come back."
Discussions at the Africa Singapore Business Forum in Singapore on August 27-28 were clear about Africa's need for foreign investment, but business leaders were equally clear about the kind of investor the continent is looking for.
"Africa's becoming selective. We're not desperate for capital anymore. The days are gone. Ten years ago, our attitude was very different. We wanted any capital coming from anywhere, with any strings attached. Not anymore," said Ashish Thakkar, who heads Mara Group, a technology, financial services, manufacturing, real estate and agriculture conglomerate with a headcount of more 10,000 in 22 African countries.
"We want quality, long-term investments. We want people with the right mindset that want to make a difference to our continent and our people, and do well at the same time. Do good and do well," he added.
Despite the continent's acute infrastructure shortage, challenging business environment and corruption, businesses cannot afford to ignore the region, considering that Africa will account for 40% of the world's population by the turn of the century.