Business Markets: Sub-Saharan Africa
Betting on emerging African economies: a huge reserve, partly to be explored
Countries in Sub-Saharan Africa are undergoing extraordinary development and economic growth.
It is necessary for Italy to reassess and restyle its relationships with Sub-Saharan Africa for three main reasons.
The first one is of a structural nature, namely the relative geographical proximity of the Sub-Saharan region, and therefore of the economic opportunities as well as of the political risks which it may pose from an Italian perspective. The second reason has to do with Italy’s current historic-political scenario, and with the possibility of contributing to relaunching the national economy, by connecting it more strongly to the business expansion underway in Africa. Thirdly, there is an opportunity to play a role in steering development and governance processes at global level, by presenting itself as an internationalisation partner for African countries in order to identify and implement sustainable development strategies from an economic, political, social and environmental perspective.
These are the reasons underpinning and guiding the work done by the International Development Center for the acquisition of new African markets, with a special focus on Nigeria, Kenia and Ivory Coast.
Nigeria’s population exceeds 160 million people, and it is already the leading economy in Western Africa and the second in the whole Sub-Saharan region after South Africa, with growth rates averaging around 7%.
Dozens of companies operate in all parts of the country, from Lagos to Abuja, from Port Harcourt to Jos, Kaduna, Kano and Katsina. A variety of industries is covered: hydrocarbons, construction, infrastructures, port services and engineering.
The Nigerian market has an enormous potential for penetration by “Made in Italy”, from miscellaneous machinery and equipment for agriculture and mining, to quality furniture, to food, textiles, fashion accessories, as well as luxury and sports cars. Relaunching production is one of the Government’s priorities. There are specific opportunities offered by the supply of machinery and technology for typical crops and agro-industrial processing.
Nigeria still needs a large number of civil infrastructures, for industry and transport. It also needs to boost its power production and distribution system. Electricity is privatised and fully open to interested international companies.
The forecasts regarding Kenia’s economy are positive. For the next three years, a constant growth between 5% and 6% is expected.
This progress scenario is supported by the consolidation and further increase of the middle class, estimated as the highest in the whole continent. Substantial growth in terms of consumption and demand is expected.
The country has embarked on a successful route thanks to tourism projects. The office sector is re-absorbing an over-capacity situation because many companies are transferring their headquarters here.
According to recent estimates by the International Monetary Fund the growth rate of the Ivory Coast economy will reach 8.5% in 2015, with a “favourable” forecast also as regards 2016.
After a long recession due to the political crisis, an ambitious National Development Plan has been implemented, which is expected to lead the Ivory Coast to becoming an Emerging Country by the year 2020.
There are three key elements underlying the country’s economic policy:
- The national Development plan (PND);
- The UEMOA convergence criteria;
- The 2014-2016 economic and financial plan.
The Ivory Coast, with its population of about 22 million people, is the first economy in the Western African Monetary Union, accounting for 40% of its GDP.