7 Questions
What is one of the factors driving rising demand in Africa?
An expanding labor force and group of consumers
What makes Africa unusual in comparison to the rest of the world?
Expanding working-age population
What is expected to happen to Africa's population by the middle of this century?
Double in size
Where are affluent consumers mostly concentrated in Africa according to the text?
North African countries and South Africa
Why did Nestlé think Africa would be the next Asia initially?
Because of the large African middle class
Which country-based food company has grown significantly by catering to both higher-income and lower-income customers?
Zambeef
What does Zambeef control that has helped its growth from a staff of sixty in 1994 to over seven thousand today?
Entire value chain
Study Notes
- Africa is experiencing a historic shift towards an urban economy, with over 80% of population growth expected to occur in cities by 2030, making it the fastest urbanizing region in the world.
- By 2030, Africa will have 17 cities with more than 5 million inhabitants, including familiar names like Addis Ababa and Nairobi, and lesser-known cities like Ibadan, Kano, and Ouagadougou.
- Africa's urban population is expected to triple between now and 2050, meaning that two-thirds of urban space in Africa is yet to be built.
- Urbanization and industrialization have historically been associated with income growth, as seen in 18th century England and Europe, 19th century America, and 20th century Japan.
- Africa's urban population rose from 25% in 1975 to 40% in 2015, and is projected to reach a majority-urban population around 2037.
- Some African cities, such as Addis Ababa in Ethiopia and Kigali in Rwanda, are investing in infrastructure to attract businesses and improve living conditions.
- Lagos, Africa's largest city and commercial capital, is a challenge due to its size and urban planning issues, but has shown improvement in recent decades with the support of democratically elected leaders.
- Lagos's governor, Akinwunmi Ambode, has ambitious plans to double the city's GDP by improving infrastructure, education, health care, and closing the infrastructure gap through public-private partnerships.
- Africa's urban population represents a significant market opportunity, with private consumption estimated to reach $2.1 trillion by 2025 and business-to-business spending projected to reach $3.5 trillion.
- Consumers in Africa plan to purchase items such as clothes, appliances, and gadgets, and there is also rapid growth in spending on discretionary categories like soft drinks, alcoholic beverages, and meat.
- Zambeef, a Zambia-based food company, has grown from a staff of sixty in 1994 to over seven thousand today by controlling the entire value chain and catering to both higher-income and lower-income customers.
Test your knowledge on the fast-growing, urbanizing population and unmet needs in Africa. Learn about the rising demand from African consumers and enterprises, driven by the continent's expanding population and labor force.
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