CEOs throughout Africa have unanimously confirmed that they see high growth potential in Africa. How do they intend to capture that growth? What are the priority business agenda actions to be launched? The CEO interviews brought to light a range of strategies. We believe some of these may be replicated successfully by other players across different countries or sectors. The priority actions show how a range of factors can weigh in on the overall approach.
In some sectors there have been very high growth rates. For example, in the telecom sector, the level of mobile phone penetration has increased by 20% per year for each of the past five years. In others, such as electricity, fundamental change is in progress, with 25% of the African network out of service and most of the network more than 40 years old. The current annual infrastructure investments across the continent are estimated to be $27 billion in power, $15 billion in water and $10 billion in transportation per year.
In the energy and mining sectors there has been increased interest and significant investment activity on the part of international players, increasingly from China, India, the Middle East and Brazil. The increasing population and GDP growth are expected to lead to a surge in consumer demand. Signs of increased consumer purchasing power on the continent can be seen in the success of Casablanca’s Morocco Mall, one of the five largest shopping malls in the world, which opened in 2011.
In sectors such as banking, insurance, automobiles and consumer goods, CEOs are scrutinising their markets to adapt and take advantage of the most attractive pockets of growth for their companies.
Issad Rebrab, the CEO of Cevital, has now seen double-digit growth in his group’s revenues for the past 12 years. Bertrand Vignes of SIFCA and Brahim Benjelloun of the BMCE are two of many business leaders who explained to us how they are now expanding operations beyond the traditional national borders, pursuing pan-African development strategies. Aliko Dangote has gone further, and is now planning to launch his group on the London Stock Exchange.