Guest Post by: Tumi Frazier, founder of Tumi Frazier International
Despite the challenges that Africa faces, the business environment continues to improve substantially. According to the International and Intra–African Trade report 2012, published by the United Nations Economic Commission for Africa (UNECA), intra–African trade averaged 10–12 percent over the past decade in comparison to other continents.
Yet, UNECA estimates that over 80% of African country exports are to overseas markets rather than regional markets. Whilst establishing significant global exposure is necessary to grow our businesses; attract investments and leverage technological advancements; how do we balance Africa’s exports in such a way that we do not lose out on the real value of our products and most importantly do not export jobs that Africa so desperately needs?
It is estimated that 80% of Africa's raw materials are exported outside the continent and at least 50% of goods produced from the same raw materials return to Africa as packaged or processed products. Several factors such as slow integration agreements, poor infrastructure development, information technology and transport connectivity to name a few, have attributed to barriers to effective intra-trade in Africa over the past few decades.
It is estimated that 80% of Africa's raw materials are exported outside the continent and at least 50% of goods produced from the same raw materials return to Africa as packaged or processed products.
There is good news, however. Sub-Saharan Africa is said to have recorded the second largest improvement in the 2015 Ease of Doing Business report. According to Dr. Donald Kaberuka, President of African Development Bank; Africa grew at 3.9% 2014, stronger than the global average of 3.3% and the growth is expected to accelerate at 4.5% this year and further 5% in 2016. So, what does this mean for business, and in particular, the growth of entrepreneurship here in Africa?
African cities still represent a growing and untapped consumer market that we should not ignore as African businesses. Disposable income in major cities in Africa is expected to grow, given the strong emerging middle class. Johannesburg, Cape Town, Nairobi, Lagos, Casablanca and Tunisia are considered to be top investment cities.
Added to that, there are also several infrastructure projects underway that will make it a little easier for African businesses to trade regionally. For example, the railway system being constructed that will run from Mombasa to Nairobi, then Uganda, Rwanda, Burundi and South Sudan. A new paved trunk road will connect Cairo to Cape Town, opening up new trade routes. And, a 3000km mega rail project in West Africa will link Benin, Burkina Faso, Niger, Ivory Coast, Ghana, Nigeria and Togo. These are all new developments that will encourage more inter-African trade over the coming years, and as a result, open up new opportunities for entrepreneurs to look to the continent for future business growth.
Tumi Frazier is a South African entrepreneur, professional speaker, author, TV personality, consultant, and founder of Tumi Frazier International, Tumi Leadership Academy, and Tumi Foundation. Tumi is an internationally acclaimed Leadership and Change Management expert who has worked with high profile clients and organizations across Africa, United States and Europe. Tumi has authored 4 books: Courageous Stories of Inspiration; In the Midst of the Storm; Stepping Stones to Success; and Your Moment. Follow Tumi Twitter | LinkedIn
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