You would not imagine the amount of business opportunities in West and Sub-Saharan Africa for Spanish companies and, especially for SMEs, in a continent that is expected to surpass China in population this year, to become the largest market in the world.
As revealed on the day “Africa: the emerging market for Spanish companies”organized by Gedeth Network and the Association of Madrid Metal Companies (Aecim), with the participation of experts from InAfrica Strategy and Zurcom International, the African market is emerging as a world power with attractive business opportunities for Spanish companies.
On the one hand, for the growth of its population and, especially, of its consumer middle class and by an emerging generation of young entrepreneurs and startups (who have received more than 5,000 million in investments in recent years) who look more to Europe than to other continents.
In addition, the consolidation of the African Continental Free Trade Agreement (AfCFTA), despite the political differences between the countries, should strengthen legal certainty in business and facilitate the creation of a common market of more than 50 countries, 1,300 million people and a GDP of more than 2,000 million dollars, an interesting opportunity for those companies that know how to detect what is the value that they can contribute and identify the channels to reach the markets.
From a technological point of view, the World Bank has set 2030 as the date for African governments to have digital capabilities aware that digital transformation can increase the growth of the continent by almost two percentage points per year and reduce poverty by almost one percentage point per year. The planned investment for digitization is 25,000 million dollars to which the World Bank wants to add others 25,000 million from the private sector, for projects such as the fiber optic trunk network between the Republic of Congo and Gabon or the promotion of technology centers in Ghana, to name a few. Internet and online sales are growing, so there are opportunities to bring technology solutions and internet access.
Investments from China and the US
“Africa is an expanding market, which is receiving investment from China and the US and which Europe should look closely at for the advantages of being connected to a continent that supplies raw materials such as lithium or silicon”, pointed out Juan Millán, managing partner of Gedeth Network.
“And, in the case of Spain, we must take advantage of the competitive advantage of our proximity, with the Canary Islands as a logistics platform and with a land border in Ceuta and Melilla, the multi-sector opportunities in countries such as Morocco and our non-colonial experience to commit to Africa as a market of future and present opportunities”, added.
“The Spanish exports to different African countries they have not stopped growing in recent years and now there is an opportunity to repeat the good business experiences in North Africa in countries like Morocco or Algeria, with countries on the sub-Saharan axis”, pointed out Jorge Simón, director of the Foreign Trade area of AECIM.
“The advantage of West Africa is that it looks to Europe and with less competition from China. In addition, there have been many success stories and, above all, many opportunities for SMEsbecause the large multinationals are investing little and doing little follow-up”recognized Dani Vives, CEO of InAfrica Strategy who recalled that to do business in these countries “You have to know how to follow up, find the channel, know how to treat people… to enter correctly and efficiently, knowing that they are markets in which you have to invest time and money, but that they will give many rewards”.
For his part, Richard Zurba, CEO of Zurcom International, highlighted the opportunities that exist to make the first contacts through the upcoming international business fairs that are going to be held in different African countries. He also explained that it is “a very large continent that cannot be ignored because by mid-century it will account for half of the world’s workforce” and that the forecast is that the common market improves economies, up to 15% opening “numerous opportunities for Spanish companies, not necessarily in their main area of expertise but discovering new business areas”.
Ten African countries to which to export Spanish technology
During the conference, the advantages, opportunities and risks of ten African countries where Spanish SMEs should focus were analyzed:
- Morocco. The proximity and extensive presence of Spanish companies make the country an interesting destination for the first experience in Africa, with interesting opportunities in ICT outsourcing, aeronautics, agri-food and the pharmaceutical, automotive and textile industries.
- South Africa. It is the second African economy and concentrates 75% of the continent’s companies, although it is experiencing slower growth, but with greater diversification and sophistication. The ease to start businesses makes it a very interesting country to access other neighboring countries.
- Ivory Coast. It acts as a hub, with a constant growth of between 9% and 10% per year in the last decade. Its advantage is the existence of a middle class that represents 35% of the population that demands consumption, construction… and the government is providing many facilities for foreign investment, which has facilitated the establishment of several European factories for consumption and food.
- Senegal. It is very fashionable, although it is a smaller country (15 million people), which is politically and economically very stable, which is why there are many industry projects in the offing, favored by foreign investment aid.
- Ghana. It is known for its stability and constant political maturity. It has its own currency that does not have a fixed parity with the euro, so there is a lot of fluctuation that must be taken into account.
- Nigeria. It is expected that in two years it will reach 1,000 million people with a high level of industrial consumption. But it is a difficult country due to its bureaucratic obstacles, so it is still better to start in other sub-Saharan countries with easier entry and leave Nigeria for a second step.
- Cameroon. The interesting thing is that it is the gateway to the entire Central African market. At a development level, it is below the countries mentioned above, but it is a much more virgin country than those countries, which opens up opportunities of all kinds.
- Gabon. Thanks to oil, it has a high consumption capacity, although there is little developed industry that is not related to oil.
- Kenya. There are opportunities for digitization, tourism and sustainable infrastructure, in a market that has continued to grow despite the pandemic.
- Tanzania. There is an interesting opportunity in the field of construction since a deficit of 3 million homes is estimated. Several hospitals are also being built and they are demanding innovation for the health market.
