Africa Rising is a popular term coined to explain the rapid economic growth in Sub-Saharan Africa after 2000, and the certainty of its continuation largely due to the demographic dividend that Africa promises to deliver.
However, this was essentially already Africa Rising 2.0, as Africa Rising 1.0 was the era around the mid 20th century associated with the independence of African states since the end of the Cold War, coupled with sustained periods of relative peace.
The Financial Times defines Africa Rising (2.0 for the purposes of this piece) as a "narrative that improved governance means the continent is almost predestined to enjoy a long period of mid-to-high single-digit economic growth, rising incomes and an emerging middle class." It has been particularly associated with a young and aspirational population, greater availability of mobile phones and the Internet, increase in African consumer spending as well as the continent’s entrepreneurial spirit. In the decade between 2005 and 2015, the economy of Africa as a whole increased by 50%- in contrast with a world average of 23%.
At Fernridge we have been part of the exciting Africa Rising 2.0 journey, culminating in the event where Nigeria actually overtook South Africa as the Number 1 economy on the continent. And then the oil price crashed. Projects were stopped immediately, funding was pulled – basically a real sense of mass panic. We are used to currency fluctuations in Africa, but during that time it was really different… New malls have been developed across the continent, with Dollar based loans and rent agreements, but Nigerian Naira or Angolan Kwanza or Rwandan Francs through the cash registers in the shops. This had a massive impact on investors and the overwhelming majority pulled out – many of them South African based and our clients.
What we are now experiencing, is the early emergence of a 3.0 resurgence. It’s (much) less dramatic than the previous two (1.0 and 2.0), more considerate, and more localized. Covid has of course played a major role in this, and the megatrends of “community-first” and “convenience-is-king” are no different in our beloved continent.
Sectors that we are now seeing an emergence of are:
We have recently been involved in projects in some of the “less prominent” African markets such as Zimbabwe, Sierra Leone, Liberia and Cote d’Ivoire. The broad indicators are (cautiously) optimistic, and this is in line with our observations on the ground.
Africa has its own unique (and very real) challenges but remains a massively untapped market for development – of the right kind, at the right time...