Nigeria leads the African Economic growth story

Africa’s growth outlook continues to be robust, with Nigeria having quickly become the leader of the African growth story in 2014.

Africa on the globe. PHOTO: Getty Images

 

“One of the big areas is going to be the Fast Moving Consumer Goods sector, second to that the natural resource boom is going to continue growing, and the emergence of the huge middle class that Africa’s [developing],” Shoreline Group Nigeria, CEO Kolade Karim told CNBC Africa.

“With the continuous growth in the financial services sector right across the continent, from banking to insurance, these areas will actually deliver very good sustainable growth on the continent [in] 2014.”

 

 

Adding to the exciting growth is the stable macroeconomic environment, and rising internal consumer spending.

According to Martyn Davies, CEO of Frontier Advisory, however, a lot of work still needs to be done in certain areas, such as in security and governance.

“The Africa Rising narrative has largely been underpinned and driven by consumer-facing enterprises. It’s about multinational companies which are seeking to capture consumers, consolidate markets, build their businesses and ultimately create shareholder value,” Davies explained.

“The Africa story is about approximately a billion odd consumers, it’s all around consumer-capturing strategies. [Next] is looking at beyond the sector-specific general business strategies, looking at countries. I think the key story will be Nigeria looking to re-base their GDP, which is long overdue. It’s very likely that Nigeria will become the single largest economy in Africa, supplanting South Africa into number two.”

Davies added that 2014 and 2015 could additionally see a rapid development in the private sector, and substantive companies from other successful companies starting to step across national boundaries to become regional players.

It will however be crucial to develop the local consumer industry in African countries, and Karim explains the progress has been showing with time.

“For example, what [Aliko]Dangote just announced the other day, commissioning five cement plants on the continent this year. That is a formidable investment right across the board. If you look into the Fast Moving Consumer Goods sector, you see what these industries are doing right across borders,” said Karim.

“One important sector that is actually driving internal growth in Nigeria is the huge privatisation that’s taken place over the last couple of years. Over 100 government-owned companies and corporations have been privatised, which tells you that transfer of spend from public sector into private-sector drive is driving formidable growth right across the sector.”