Africa Megatrends

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The term megatrend was made famous by John Naisbitt with his bestselling book, Megtrends. He defined a megatrend as a general shift in thinking or approach affecting countries, industries and organizations. Megatrends are processes that are slow to form, and have a dramatic impact in shaping future markets and shifting the status-quo. There are three characteristics in which megatrends differ from other trends.

Time horizon. Megatrends are evident over decades. There are empirically unambiguous indicators available in the present that indicate their prevalence, and they can be projected with a high degree of confidence, at least 15 years into the future. 

Reach. Megatrends impact comprehensively on all regions, and result in multidimensional transformations across politics, society, and the economy. 

Intensity of impact. Megatrends impact powerfully and extensively on all of society - governments, individuals and their consumption patterns, or corporations and their strategies.

Of all the places in the world where megatrends are catalysing rapid growth and transformation in a remarkable way, it is Africa. 

Today, 7 of the 20 fastest-growing economies in the world are on the continent. Africa will continue to move deeper into the limelight as an investment destination that simply cannot be ignored.

Real GDP Growth (2016, %)

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While in the past two years, the economic powerhouses that are Nigeria, and South Africa have seen dismal levels of growth, Ethiopia, Kenya, Rwanda, Uganda and Tanzania have all seen strong and consistent levels of economic growth in the past few years, and indeed are projected to maintain this going forward.

Global real GDP growth heat map (2016, %)

These strong and consistent growth profiles have forced foreign investors to turn away from their traditional investments, and start looking seriously towards opportunities on the African continent. Queue the capital market stalwarts MTN, Dangote Cement, Safaricom, Naspers, Ecobank, Umeme, and East African Breweries to name only a few. 

The megatrends in Africa that we have identified as catalysing the empirical transformation in African business are:

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"So what now" should be the inevitable question that anyone invested in Africa should be asking. Harnessing these megatrends should form part of any organisation's long term strategy, especially in light of their global ramifications, suggesting the opportunity for scalable results. 

Investing in Africa is not a punt, if you are in it for the long-haul.