Dramatically increased bilateral trade with strong emerging economies such as Brazil, Russia, India, China and South Africa (Brics) was supporting “a remarkable economic turnaround in a number of African countries”, Standard Bank chief economist Goolam Ballim said on Tuesday.
“Supply-side forces and themes have been sweeping the continent, enabling some economies to grow at a rate of 6% a year — dare I say into perpetuity,” he said at Accelerate Cape Town, a corporate think-tank.
Ballim said Africa’s population of one billion would double by 2050. Most of these people would by then be living in cities, which could be used to the continent’s benefit.
“Africa has a growing middle class and skilled workforce, which has been shown to stimulate economic activities and consumerism.
“Standard Bank is already seeing a dramatic deepening in the financial services sector in countries like Nigeria.
“Mobile phone technology is already extensively embraced by Africans with more than 600 million active connections on the continent.”
Ballim and Accelerate Cape Town chief executive Guy Lundy agreed cities would become more important than nation states in terms of trade in coming decades.
But Ballim warned that South Africa could not assume to be the gateway into Africa, as other countries such as Brazil and China had better diplomatic relations than South Africa in a number of high-growth African countries.”
While the Chinese, the Indians and
the Brazilians had been expanding their business activities rapidly across Africa, it had taken most South African firms a while to grasp the economic opportunities of doing business there, Lundy said. But “corporate Cape Town can help position the city as a hub for doing business in Africa”.
Hinre Smit, the development manager in Africa at Distell, which has grown its exports to the rest of the continent, said it was important to find the right local business partner with sufficient cashflow, to get to know the preferences of African consumers, to rethink marketing strategies for each country, to employ skilled locals and to have “huge patience with permits and processes”.