Despite rising political uncertainty and high inflation levels, consumers across Africa remain as optimistic as ever, according to new analysis from global management consultancy Boston Consulting Group (BCG). Consumers on the continent are willing to spend an increasing amount in the near future.
The consulting firm details how there are causes for concern across the political, economic and environmental domains in various parts of the continent. South Africa and Nigeria – the continent’s top two economies – have suffered from the dip in the global oil and commodity prices.
Angola, Egypt, and a number of other countries, meanwhile, are coping with radical political transitions, which have considerably dented the economic sentiment in the countries. Nevertheless, BCG has found a largely optimistic consumer base across various parts of the continent.
A survey conducted by the firm amongst participants from 12 countries in the region revealed that more than 85% of the consumers were confident about growth prospects in the future. Despite all that has happened since 2015, the figure represents a meager 2% dip in the time since.
The findings contrast with some of the stronger economies across the globe. In what BCG terms as rapidly developing countries, the firm found only 72% of the consumers to be optimistic about the future, while this number registers a substantial dip to 48% when it comes to developed economies.
In part, this contrast may stem from the difference in future economic indicators. While the population in most Western countries is ageing rapidly, Africa remains home to the youngest population on the planet, the majority of which is set to enter the workforce over the next half a decade.
In addition, the continent is developing rapidly at a time when there are radical transformations affecting the global economy, offering it the unique position of building an economy of the future. A number of countries are currently engaged in realising this economic potential.
In its report, BCG offers numbers regarding this growth. As per the firm, the population in Africa will grow by as much as 1.3 billion people by 2050, which will contribute substantially to this rapidly expanding workforce. By then, Africa will be home to 60% of the world’s population.
The economic efforts from some of the most prominent economies on the continent, meanwhile, have begun to manifest themselves. As per International Monetary Fund (IMF) estimates, of the ten economies that are anticipated to have the fastest growing GDPs this year, five are in Africa.
Part of this growth story is an increase in overall economic prosperity, which is driving substantial increases in the consumer spending on the continent. As per the report, 82% of those surveyed backed the statement: “Every year, there are more things I want to buy.”
One explanation behind this sentiment is the association between purchasing and happiness. BCG reports that 86% of consumers in Africa draw this link, which is a promising indicator for the future. Nevertheless, this upward trend is not only limited to the quantity of consumption.
The report reads, “This third edition of our Africa survey confirms a continuation of trends already evident in 2013 and 2015, such as a high degree of optimism among consumers, a preference for well-made durable products, and a significant amount of loyalty to long-established brands.”