The African continent is often overlooked when it comes to identifying promising export markets. One reason for this is the image of Africa in the minds of many people: People think of wars, corruption or poor infrastructure.
But Africa's economic situation is changing rapidly. Therefore, it is worthwhile to look at the continent as an export market.
Some countries like the USA, Brazil, China and India are steadily increasing their business activities with the continent. Also, in 2018, the British and South African governments set a target to double their bilateral trade by 2023.
Facts about Africa's economic recovery
Africa is the continent with the most fast-growing economies in the world. For instance, most of the top 10 fastest growing economies in the world are located on the African continent.
According to the World Bank, most African countries will reach what is called "middle income" by 2025, which means at least $1000 per person per year. Covid-19 has lowered growth rates in most countries, but a recovery is expected this year so that growth rates will rise again.
Export market Africa
Many African industrial sectors are growing. This increases the demand for imports needed to add value. Some of the most exported goods to Africa include machinery, chemicals, pharmaceuticals, petroleum products, scientific instruments, food, batteries, automotive spare parts, cosmetics, stationery and electronics.
Africa's integration into the world market poses some challenges, but it is evident that some African sectors are already outpacing world market growth. This is a sign of the continent's competitiveness. The stars of the African export portfolio include cut flowers, frozen fish, T-shirts, women's trousers, shoes and transistors.
Things to consider when exporting to Africa
In order to export to African markets and take advantage of the great opportunities, one should first research the target market and find out who the competitors are, which products are already on the market, what the price level is.
Likewise, you should find out about customs structures, freight rates, currency fluctuations and local laws. An example of this is the BEE laws in South Africa, which require that a certain percentage of employees, directors and shareholders be black South Africans.
Through the new African Continental Free Trade Area (AfCFTA), tariffs between African countries are to be abolished bit by bit at a rate of about 90% by 2026. It is therefore worthwhile for potential exporters to follow this development. More information about AfCFTA: African Continental Free Trade Area - Opportunities for European companies
To achieve the best possible results, exporters should fly to Africa in person to better understand the local culture. This will help avoid mistakes and make market entry easier.
It is recommended to work with partners who will network for you in the target market so you can focus on production and supply.
E-Commerce - a fast-growing sector in Africa
A fast-growing sales channel in Africa is E-Commerce. This sector has been growing steadily for many years and was given a further boost by the Covid19 crisis, as even more people and businesses are now doing their shopping online. More information about E-Commerce: E-Commerce - How to profit from online trading
African markets bring enormous potential with them for several reasons. The population is growing and so is the middle income class as well as the population of big cities and business hubs. The growth of E-Commerce on the continent shows, that there is a demand for products as well as a trend towards digitalisation. With our E-Commerce service offerings, we as Enterprise Africa International make sure to reduce your risk of investing in Africa and entering African markets to make Africa your Export market of the future.