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African Countries with Highest Consumption Growth Potential

So you’ve decided to take the plunge and expand your business into Africa. Great. But the continent is not one homogeneous market and comprises 54 countries, each with its own unique dynamics. Which countries are the most attractive?

A KFC outlet in Ibadan, Nigeria. The West African country has been ranked as the market with the most favourable macroeconomic backdrop for consumption growth.

The increasing spending power of African consumers has been covered extensively by How we made it in Africa. Rising incomes has attracted investment from many consumer-facing multinationals such as supermarket chains and mobile phone operators.

Rand Merchant Bank (RMB), in a recent report entitled ‘Where to Invest in Africa’, says that consumer goods companies should look at the following factors when deciding where their goods should go: population size; forecast population growth rates; forecast per capita GDP growth rates; and urbanisation growth rates.

By combining these variables into a single measure, RMB has created a ranking index of the countries with the best outlook for consumer goods. “This index provides us with a gauge of which countries rank the highest when all four measures are taken into account. Nigeria, Ethiopia, the Democratic Republic of Congo, Kenya and Tanzania have the most favourable macroeconomic backdrops for consumption growth.”

Top ten countries providing a favourable macroeconomic backdrop for consumption growth

Rank Country
1 Nigeria
2 Ethiopia
4 Kenya
5 Tanzania
6 Egypt
7 Sudan
8 Uganda
9 Burkina Faso
10 Mozambique
The report notes that although Africa is an important market for consumer goods from a macroeconomic perspective, companies need to remember that each country is different. “Ethiopia, for instance, has a large population and a decent market size, but it would probably not offer a concentration of high-income earners for high-end retailers.”

Read more: How We Made It In Africa

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