Africa’s markets are never quite what they seem as revealed by the latest Nielsen Africa Prospect Indicator (APi) which shows that amidst relentless change, country prospects are stabilizing on the continent. This is evidenced by the fact that only two markets changed position on the latest APi ranking update, with Kenya remaining in top position, followed by Cote d’Ivoire.
According to the latest results Nielsen Executive Director Intelligence Global Markets Ailsa Wingfield comments; “Looking at the broader macro prospects, it is clear that Sub-Saharan Africa’s momentum will take longer than expected to flourish, with the initial 3.3% SSA GDP forecast for 2019, downgraded to 2.8%. With this slower growth comes subdued advances in consumer prosperity and demand, and business growth will need to be boosted in non-commodity dependent countries, which provide nuggets of opportunity.”
When drilling down to individual country performance, it becomes clear that top performer Kenya, is characterized by strong economic and consumer prospects, however, its business and retail prospects have deteriorated and GDP growth rates are lower with the economy losing steam in Quarter 1, 2019.
Second ranked Cote d’Ivoire’s greatest challenge is its consumer potential which weakened further in the latest quarter. Only 17% of Ivorian retailers feel that consumer spend is increasing and just 15% think that consumers are increasingly willing to try new products.
Tanzania remains steady in third place on the APi ranking with improved retail prospects although these are countered by a weaker business outlook due to restrictive investment regulations and policies.
Ghana in fourth position is forecast by the International Monetary Fund (IMF) as having one of the fastest growing economies in the world. Companies share this positive outlook, rating Ghana as Africa’s second best business prospect, with improved growth expectations. Ghanaian consumer prospects have also increased significantly, with 36% of retailers of the opinion that consumer spend is increasing, compared to only 11% a year ago.
Nigeria retains fifth place which represents its best level in the last three years, and its economic recovery is set to gain further momentum in 2019, with business prospects improving in parallel.
Business prospects
Looking at how businesses rate country growth prospects, the SSA average is moderate for the year ahead, and has remained unchanged for four consecutive quarters. Ethiopia leads the country growth expectation list followed by Ghana, Kenya, Uganda, Cote d’Ivoire and Nigeria, all ahead of the SSA average. While only six markets are regarded as having a ‘good’ growth outlook, businesses back their own growth options more highly. Own business growth expectations exceed country growth expectations in two thirds (12) of Africa’s markets.
Nigeria and South Africa show the biggest discrepancy between country and own growth outlook, where own growth expectations are markedly stronger. Companies maintain a strong conviction that these two core markets remain crucial to success and that growth is achievable despite adverse macro factors.
Consumer prospects
Africa’s consumers are marked by disparate spending intentions and purchasing pressure points. For example, Ivoirians pay 33% more than Nigerians for a common basket of goods and only 15% of Ivoirians are more willing to try products, compared to 44% of Nigerians, despite a GDP per capita of 1.6 times higher than Nigerians. Ivoirians’ purchase decisions are however not primarily based on price. They are firmly entrenched in familiarity and trust, with 84% of consumers saying they choose products with this in mind. For this reason, brand propositions must establish awareness and confidence to gain users and grow spend, not merely provide cheaper alternatives.
In Nigeria, despite higher inflation and lower incomes, consumers are adventurous when it comes to experimenting with new products which provides a window of opportunity to reach and resonate with consumers based on their more positive spending intentions.
This shows that cash constrained consumers don’t only need better price points or are risk averse, but also want value and quality assurances from those they have confidence in. Brand, marketing and retail initiatives will therefore demand very different strategies in different countries.
Retail prospects
Overall, the retailer growth outlook is the most favorable it has been in three years, with Tanzania, Cote d’Ivoire, South Africa and Uganda ahead of the average. That said, the ease of doing business remains challenging. Manufacturers therefore need to work with retailers to bolster sales through optimal stock supply, relevant product portfolios, favorable pricing points and beneficial trading terms.
Smaller players are providing formidable competition on this front in the prolific informal channels. As a result, the top 10 manufacturers account for approximately 55% of sales in Kenya, Nigeria, Ghana and Cameroon but are growing at less than 5% per annum, while smaller manufacturers are growing ahead of 15%.
Wingfield adds; “With temperate growth, business expectations are centered on core countries for success, but now more than ever, strategies need to be flexible, adaptable and focused on consumers.”
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: Jacques Nel [1], [2].
Visa Changes Coming to South Africa
The Department of Home Affairs is working on a number of changes to South Africa’s visa regime, in an effort to make the country more accessible for visitors, investors and people with skills that are critical to building the economy.
Presenting at the monthly Presidential Working Committee on Monday (7 October), Home Affairs minister Dr Aaron Motsoaledi said that his department has lowered turnaround times for critical work skills visas, which are now issued within four weeks in 88.5% of applications.
By comparison, business and general work visas are issued within eight weeks in 98% of applications.
“In November, the Department of Home Affairs will embark on a pilot scheme for the issuing of e-visas, which applicants will be able to access online, eliminating the need for applicants to visit South African missions abroad.
“The department has also located visa services within the offices of various investment facilitation agencies around the country.
“In addition, visa requirements have been simplified for countries such as China and India, which are key markets for tourism to South Africa,” he said.
New countries can now visit South Africa visa-free
Motsoaledi added that the government also recently waived visas for travelers from Saudi Arabia, United Arab Emirates, Qatar, New Zealand, Cuba, Ghana and Sao Tome and Principe.
In July, a spokesperson told BusinessTech that the Department of Home Affairs will also enter into talks with their counterparts in a number of countries to allow visa-free access for South African travelers.
While countries such as Qatar and Ghana already have visa-free or visa on arrival agreements with South Africa, it would be considered a serious boon if South Africans could travel visa-free to countries such as the UAE and New Zealand.
Department spokesperson Siya Qoza said that Home Affairs was currently in talks with these countries on two main issues.
“We have entered negotiations with these countries with the first priority being an implementation date for visa-free access to South Africa.
“Once this has been confirmed, our second priority is reciprocity.”
Qoza said that initial conversations held with these countries have been positive, with talks expected to be concluded by September.
He added that Home Affairs may expand these negotiations to other countries.
“We are consistently looking at which countries would be of a trade and tourism benefit to South Africa,” he said.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].
Nielsen Reveals Stabilizing Prospects in Africa
Africa’s markets are never quite what they seem as revealed by the latest Nielsen Africa Prospect Indicator (APi) which shows that amidst relentless change, country prospects are stabilizing on the continent. This is evidenced by the fact that only two markets changed position on the latest APi ranking update, with Kenya remaining in top position, followed by Cote d’Ivoire.
According to the latest results Nielsen Executive Director Intelligence Global Markets Ailsa Wingfield comments; “Looking at the broader macro prospects, it is clear that Sub-Saharan Africa’s momentum will take longer than expected to flourish, with the initial 3.3% SSA GDP forecast for 2019, downgraded to 2.8%. With this slower growth comes subdued advances in consumer prosperity and demand, and business growth will need to be boosted in non-commodity dependent countries, which provide nuggets of opportunity.”
When drilling down to individual country performance, it becomes clear that top performer Kenya, is characterized by strong economic and consumer prospects, however, its business and retail prospects have deteriorated and GDP growth rates are lower with the economy losing steam in Quarter 1, 2019.
Second ranked Cote d’Ivoire’s greatest challenge is its consumer potential which weakened further in the latest quarter. Only 17% of Ivorian retailers feel that consumer spend is increasing and just 15% think that consumers are increasingly willing to try new products.
Tanzania remains steady in third place on the APi ranking with improved retail prospects although these are countered by a weaker business outlook due to restrictive investment regulations and policies.
Ghana in fourth position is forecast by the International Monetary Fund (IMF) as having one of the fastest growing economies in the world. Companies share this positive outlook, rating Ghana as Africa’s second best business prospect, with improved growth expectations. Ghanaian consumer prospects have also increased significantly, with 36% of retailers of the opinion that consumer spend is increasing, compared to only 11% a year ago.
Nigeria retains fifth place which represents its best level in the last three years, and its economic recovery is set to gain further momentum in 2019, with business prospects improving in parallel.
Business prospects
Looking at how businesses rate country growth prospects, the SSA average is moderate for the year ahead, and has remained unchanged for four consecutive quarters. Ethiopia leads the country growth expectation list followed by Ghana, Kenya, Uganda, Cote d’Ivoire and Nigeria, all ahead of the SSA average. While only six markets are regarded as having a ‘good’ growth outlook, businesses back their own growth options more highly. Own business growth expectations exceed country growth expectations in two thirds (12) of Africa’s markets.
Nigeria and South Africa show the biggest discrepancy between country and own growth outlook, where own growth expectations are markedly stronger. Companies maintain a strong conviction that these two core markets remain crucial to success and that growth is achievable despite adverse macro factors.
Consumer prospects
Africa’s consumers are marked by disparate spending intentions and purchasing pressure points. For example, Ivoirians pay 33% more than Nigerians for a common basket of goods and only 15% of Ivoirians are more willing to try products, compared to 44% of Nigerians, despite a GDP per capita of 1.6 times higher than Nigerians. Ivoirians’ purchase decisions are however not primarily based on price. They are firmly entrenched in familiarity and trust, with 84% of consumers saying they choose products with this in mind. For this reason, brand propositions must establish awareness and confidence to gain users and grow spend, not merely provide cheaper alternatives.
In Nigeria, despite higher inflation and lower incomes, consumers are adventurous when it comes to experimenting with new products which provides a window of opportunity to reach and resonate with consumers based on their more positive spending intentions.
This shows that cash constrained consumers don’t only need better price points or are risk averse, but also want value and quality assurances from those they have confidence in. Brand, marketing and retail initiatives will therefore demand very different strategies in different countries.
Retail prospects
Overall, the retailer growth outlook is the most favorable it has been in three years, with Tanzania, Cote d’Ivoire, South Africa and Uganda ahead of the average. That said, the ease of doing business remains challenging. Manufacturers therefore need to work with retailers to bolster sales through optimal stock supply, relevant product portfolios, favorable pricing points and beneficial trading terms.
Smaller players are providing formidable competition on this front in the prolific informal channels. As a result, the top 10 manufacturers account for approximately 55% of sales in Kenya, Nigeria, Ghana and Cameroon but are growing at less than 5% per annum, while smaller manufacturers are growing ahead of 15%.
Wingfield adds; “With temperate growth, business expectations are centered on core countries for success, but now more than ever, strategies need to be flexible, adaptable and focused on consumers.”
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: Jacques Nel [1], [2].
DHL Expands Africa eShop Online Shopping Application to 34 Countries Across Sub-Saharan Africa
Since its initial introduction in April 2019, the DHL Africa eShop app has seen its user base grow rapidly, and within the first three months of operation, it had already been rolled out to 20 countries across Sub-Saharan Africa (SSA).
DHL Express announced this week that the innovative mobile and desktop platform is now available in 14 additional countries across the region. This increases the platform’s reach to 34 countries across SSA.
Hennie Heymans, CEO of DHL Express Sub Saharan Africa, says that user uptake on the DHL Africa eShop app has been remarkable over the last five months, not only from the number of downloads, but just as importantly, from an order perspective. This is why we’re excited to launch DHL Africa eShop in Angola, Benin, Burkina Faso, Burundi, Chad, Ethiopia, Guinea, Lesotho, Liberia, Mali, Namibia, Niger, Sudan, and Togo.
“DHL adopted a phased approach for the rollout of the platform on the continent, with the initial launch implemented in 11 countries to test the market’s reaction. Within the first seven weeks, the response from the consumer market was so impressive, that the second phase was initiated – which added 9 more countries to the list. Now we are once again able to build on that momentum, with the biggest single rollout phase so far.”
The DHL Africa eShop app offers African consumers unprecedented access to international retailers on an easy-to-use platform, with great convenience and speed. It also enables many global brands to connect with a captive African market. The DHL Africa eShop enables African customers to shop directly from over 200 US- and UK-based online retailers, with purchases delivered to their door, by DHL Express. This solution was developed in partnership with Link Commerce – a division of Mall for Africa.
He adds that while Africa’s ecommerce market is still lagging behind the rest of the globe in terms of annual turnover, it may well make significant strides to catching up in the near future. “A report by Statista reveals that e-commerce in Africa was valued at $16.5 billion in 2017. McKinsey adds to this calculation by predicting that this value could potentially reach $75 billion by 2025.”
As the global leader in express logistics, DHL is well positioned to connect African consumers with these exciting global brands. “We are committed to driving e-commerce growth on the continent for etailers as they work to expose their brands to international markets and also for consumers, who want easy access to global brands,” concludes Heymans.
DHL is celebrating the launch of the new countries with a promotion of $20 flat rate shipping for up to 5 items from over 100 US/UK selected sites to all DHL Africa eShop countries. The promotion is limited to Clothing and Accessory items only, and buyers need to use coupon code CELEBRATE when completing their order.
To visit the eShop, click here.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].
Angola Cables and TM Global Successfully Establish Proof of Concept For a New Undersea Cable Route
Most of the global internet traffic today utilizes infrastructure located primarily in the northern hemisphere to link Asia, Europe and North America. Meanwhile, the southern hemisphere, which includes parts of Asia, Africa and South America is heavily connected via links coming from the North as well. However, the traffic to the southern region currently travels a longer route which may affect the internet experience of the end-users.
Aware of the increasing needs for a more efficient and low latency route, TM GLOBAL, the global and wholesale arm of Telekom Malaysia Berhad (TM) and Angola Cables have been exploring another alternative via a new express route connecting the southern hemisphere subsea cables from Asia directly to South America. A Proof of Concept (PoC) testing is being conducted by both parties leveraging two (2) cable systems; the South Africa Far East cable system (SAFE), connecting Malaysia to Angola, and South Atlantic Cable System (SACS) connecting Angola to Brazil owned by both parties respectively.
The preliminary PoC results have showed up a reduction in the latency reading as compared to the current northern hemisphere routes. This may lead to a significant improvement in the global internet traffic routing quality especially on data connectivity services to the southern hemisphere.
The new express route is set to provide a shorter path connecting Asia to South America while bypassing the Middle East and Europe, hence delivering a better customer experience. The low latency routing will also provide the catalyst for the creation of more effective digital ecosystems that are developing within the southern hemisphere. This initiative is expected to transform data transfer between countries and economies, enabling more robust connection amongst back-haul providers, content/application providers and content delivery network providers in a more efficient data sharing process. The benefits will be far-reaching, especially for financial institutions in conveying market-sensitive information or multinational companies in sharing large amounts of data and applications to users in the US, Latin America or the Far East region.
TM GLOBAL and Angola Cables believe that this initiative will provide better options for service providers in growing their business and expanding their reach to new and niche markets. Both parties will continue to explore other potential collaboration areas in penetrating new market opportunities and serving the customers who are looking for diversity, high resiliency route and better quality of service.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].