Business
Ghanaian capital Accra has the highest growth potential in Africa over the next 5 years – Study
Nairobi, Kenya
Companies looking to expand into Africa should seriously consider setting up shop in Accra in Ghana, Lusaka in Zambia and Luanda in Angola.
A recent study – the MasterCard African Cities Growth Index, produced on behalf of MasterCard by Prof. George Angelopulo of the University of South Africa has revealed that the capitals of Ghana, Zambia and Angola as having the greatest economic growth potential over the next five years.
The study includes 19 African cities, ranking them according to their economic growth potential between the years 2012 and 2017.
Angelopulo looked at various data related to city-level economic growth. He argues that the reasons for the Ghanaian capital’s (Accra) high ranking is because of its gross domestic product (GDP) per capita growth in recent years, its projected consumption growth, a strong regulatory environment, and the relative ease of doing business in comparison to other cities on the African continent.
“One of Africa’s key economic and social challenges is how its cities attract significant inward investment by being globally competitive, serving as magnets for investment and growth, hot-spots of innovation and, most importantly, developing attractive and thriving business environments,” said Angelopulo.
It is estimated that Africa’s urban population will triple by 2050, reaching 1.23 billion people. It is expected that by this time 60 percent of the continent’s population will live in urban areas.
In 2012, consulting firm McKinsey suggested in a report that cities, not countries, should drive investment decisions in Africa, noting that “most companies are still not looking at cities as they calibrate strategy”. The firm found that “less than one in five executives is making location and resource decisions at the city, rather than the country, level”.
“Companies that understand the shifting urban marketplaces relevant to their businesses and build an early presence with sufficient scale are likely to benefit from being the incumbent with better market access and higher margins. Looking at cities rather than countries can be eye-opening. Take laundry care products as an example. We expect to see more sales growth of these products in São Paulo than in either France or Malaysia over the next decade,” noted the report.
Below are the cities and their ranking:
1. Accra (Ghana)
2. Lusaka (Zambia)
3. Luanda (Angola)
4. Dar es Salaam (Tanzania)
5. Addis Ababa (Ethiopia)
6. Nairobi (Kenya)
7. Kampala (Uganda)
8. Johannesburg (South Africa)
9. Kinshasa (Democratic Republic of Congo)
10. Durban (South Africa)
11. Cape Town (South Africa)
12. Mombasa (Kenya)
13. Lagos (Nigeria)
14. Abuja (Nigeria)
15. Dakar (Senegal)
16. Harare (Zimbabwe)
17. Kano (Nigeria)
18. Abidjan (Côte d’Ivoire/Ivory Coast)
19. Khartoum (Sudan)
Source: How We Made it in Africa