A unique guide to business and investment in Africa.
Global Africa Network is proud to launch this inaugural edition of African Business 2020 at a time of energetic planning for a prosperous future for the continent.
The African Union’s Agenda 2063 is much more than a document about a hoped-for future, it contains concrete goals and deliverables. The Programme for Infrastructure Development in Africa (PIDA) and the development finance institution, the African Development Bank (AfDB) are already rolling out valuable projects that are changing the reality on the ground in vital areas of the African economy.
Perhaps the most significant event of recent times is the signing by African leaders of the African Continental Free Trade Area agreement (AfCFTA) which will bring together all 55 member states of the African Union and cover a market of more than 1.2-billion people. African Business 2020 has articles on all of these recent trends, plus overviews of the key economic sectors and regional and country profiles. In 2019 Ethiopian Prime Minister Abiy Ahmed received the Nobel Peace Prize for peace-making efforts in his region. The economic dividends of peace are beginning to be felt. In 2020 South African President Cyril Ramaphosa assumed the mantle of AU Chairperson. He brings to the role considerable experience in conflict management, constitution-writing and seeking consensus.
Global Africa Network is a proudly African company which has been producing region-specific business and investment guides since 2004, including South African Business and Nigerian Business, in addition to its online investment promotion platform www.globalafricanetwork.com
SPECIAL FEATURE taking
SPECIAL FEATURE taking our jobs” will have to be addressed at national and local levels. South Africa has experienced outbreaks of xenophobia. Migration patterns will likely change if movement around the continent becomes easier. A lot of work needs to be done to synchronise financial governance policies and to put better technology in place so that payments can take place across jurisdictions. Debt and deficit policies must chime. The African Development Bank is supporting regional financial integration with programmes focussed on banking and financial standards and the African Peer Review Mechanism. Regional payment systems are being developed in each of COMESA, EAC, ECCAS, and ECOWAS. Other projects of the bank are the Africa Financial Markets Initiative, Making Finance Work for Africa and the Association of African Central Banks. Possibly the biggest hurdle to seamless trading is poor infrastructure but a great many projects are underway in every corner of the continent. Among the initiatives of the Programme for Infrastructure Development in Africa (PIDA) is the West Africa Hub Port and Rail Programme, a regional hub-port, rail-linkage and port-expansion plan. Kenya’s -million Naivasha Dry Port project supports this plan. The Southern African Development Community (SADC) has been active with multimodal projects such as the development corridors of Nacala, Maputo and Lobito (Zambia to Angola). The Trans-Maghreb Highway in North Africa, the North-South Multimodal Corridor and the Central Corridor project are among other ambitious projects intended to provide inter-regional connectivity. Who will benefit? A recent research paper suggests that manufacturing will be one of the sectors to gain the most from the AfCFTA. According to “AfCFTA’s US-trillion Opportunity: Weighing Existing Barriers against Potential Economic Gains,” the dropping of tariffs between African countries will allow for the replacement of imported manufactured products, industrial machinery and transport equipment, which currently make up over 50% of Africa’s import basket. The report, based on research done by international law firm Baker McKenzie and Oxford Economics, contrasts Africa’s export of raw material with this need to import manufactured goods. As a percentage of GDP, manufacturing averages 10% in Africa but the AfCFTA provides a chance for this to grow as markets open up. Improved infrastructure will further spur trade, and drive demand for more manufactured goods. Countries which currently have strong manufacturing bases will benefit the most from the deal. Countries with less manufacturing like Algeria and Sudan will presumably move to diversify their economies and start building manufacturing capacity. Another sector likely to benefit from the deal will be the services sector. Countries with good infrastructure stand to benefit as efficient ports, airports and railway systems will be better equipped to deal with increased volumes of trade. ■ AFRICAN BUSINESS 2020 22
10 REASONS WHY YOU SHOULD INVEST IN SOUTH AFRICA 01. HOT EMERGING MARKET Growing middle class, affluent consumer base, excellent returns on investment. 02. MOST DIVERSIFIED ECONOMY IN AFRICA South Africa (SA) has the most industrialised economy in Africa. It is the region’s principal manufacturing hub and a leading services destination. LARGEST PRESENCE OF MULTINATIONALS ON THE AFRICAN CONTINENT SA is the location of choice of multinationals in Africa. 03. Global corporates reap the benefits of doing business in SA, which has a supportive and growing ecosystem as a hub for innovation, technology and fintech. 05. FAVOURABLE ACCESS TO GLOBAL MARKETS ADVANCED FINANCIAL SERVICES & BANKING SECTOR SA has a sophisticated banking sector with a major footprint in Africa. It is the continent’s financial hub, with the JSE being Africa’s largest stock exchange by market capitalisation. The African Continental Free Trade Area will boost intra-African trade and create a market of over one billion people and a combined gross domestic product (GDP) of USD2.2-trillion that will unlock industrial development. SA has several trade agreements in place as an export platform into global markets. 07. 04. 06. 08. PROGRESSIVE CONSTITUTION & INDEPENDENT JUDICIARY SA has a progressive Constitution and an independent judiciary. The country has a mature and accessible legal system, providing certainty and respect for the rule of law. It is ranked number one in Africa for the protection of investments and minority investors. ABUNDANT NATURAL RESOURCES SA is endowed with an abundance of natural resources. It is the leading producer of platinum-group metals (PGMs) globally. Numerous listed mining companies operate in SA, which also has world-renowned underground mining expertise. WORLD-CLASS INFRASTRUCTURE AND LOGISTICS A massive governmental investment programme in infrastructure development has been under way for several years. SA has the largest air, ports and logistics networks in Africa, and is ranked number one in Africa in the World Bank’s Logistics Performance Index. YOUNG, EAGER LABOUR FORCE 10. SA has a number of world-class universities and colleges 09. producing a skilled, talented and capable workforce. It EXCELLENT QUALITY boasts a diversified skills set, emerging talent, a large pool OF LIFE of prospective workers and government support for training SA offers a favourable cost of living, with a diversified cultural, cuisine and and skills development. sports offering all year round and a world-renowned hospitality sector. 23 AFRICAN BUSINESS 2020 Page | 2
