GDP per household in Africa has more than doubled in the last 15 years. Today, around 85 million households earn at least US$5,000 a year.
Summary: Africa is a significant growth market that no consumer products business can afford to ignore. But capturing the opportunity in Africa is going to be a long and complex journey.
Establishing a presence, reaping the benefits
Many of the consumer products companies that were quick to build a presence in Africa have already established successful, profitable businesses. Those companies have been able to generate competitive advantage by:
- Influencing consumer preferences
- Building brand loyalty
- Shaping industry structure before competitors become established
Other companies that have yet to build a presence in Africa need to move fast if they are to enjoy the same advantages.
Africa by the numbers
GDP per household across the continent has more than doubled in the last 15 years. Investment increased sixfold1 between 2000–09 and today around 85 million households earn at least US$5,000 a year, the income point at which packaged goods become affordable. By 2015 it is estimated that individuals earning more that £1,000 will grow by 16%.
- Total population, 1 billion2
- Population under 15, 41%3
- Adult literacy, 62%4
- GDP income per capita is 10th of world average5
- Around 45% living on US$1 a day6
- Mobile phone subscribers, 37%7
- Population living in urban areas, 38%8
- Collective GDP (2008), US$1.6t9
- Collective FDI (2008), US$87b10
- Combined consumer spending (2008), US$860b11
- Total population, 1.4 billion by mid 202512
- Total population, 2.1 billion by mid 205013
- 128 million households with discretionary income by 202014
- Consumer spending will be US$1.4t by 202015
- Collective GDP will be US$2.6t by 202016
- Around 50% of Africans will be living in cities by 203017
Four areas of strategic focus
We believe there are four areas of strategic focus for companies building their African presence.
1 United Nations conference on Trade & Development (UNCTAD), January 2011.
2 Demographic Indicators, www.africaneconomicoutlook.org, January 2011.
3 2010 PRB World Population Datasheet, www.prb.org.
4 World Bank data, January 2011.
5 UN data, January 2011, http://data.un.org.
6 Poverty and Income Distribution Indicators, www.africaneconomicoutlook.org January 2011.
7 2010 PRB World Population Data Sheet, www.prb.org.
8 2010 World Population Datasheet, www.prb.org.
9 Africa — Growth Versus Corruption, All Africa, 20 December 2010.
10 Foreign direct investment, www.africaneconomicoutlook.org, January 2011.
11 Domestic Resources and Diversifi cation Key to Africa's Economic Growth — UN Offi cial, All Africa,28 October 2010.
12 2010 PRB World Population Datasheet, www.prb.org.
13 2010 PRB World Population Datasheet, www.prb.org.
14 KFC intends to double its restaurants in Africa, The Wall Street Journal Asia, 9 December 2010.
15 In Africa, consumers pick up pace, The Wall Street Journal Europe, 14 January 2011.
16 Business in Africa, a whole new scramble, Financial Mail, 25 June 2010.
17McKinsey on Africa, June 2010.