Business
Three interesting countries to consider when investing in African retail
Various international retailers – from supermarket giants like Wal-Mart to clothing chains such as Gap – have recently entered the African market, targeting the continent’s growing middle class. However, with 54 independent countries, deciding which markets to enter is not an easy decision. Research company Euromonitor International recently identified a number of African countries with growth potential in the retail sector. We take a closer look at three of these markets – Rwanda, Zambia and Angola.
1. Angola
Angola, South West Africa
After decades of civil war that destroyed infrastructure and ruined the economy, Angola had nowhere to go but up.
The return of peace in 2002 led to significant economic growth, albeit from a very low base. According to The Economist, Angola experienced an average annual GDP growth of 11.1 percent between 2001 and 2010, largely sustained by the oil industry.
“In 2011, it was the second largest African oil producer, with China its main client,” says Euromonitor. “Rising oil prices over the past five years have translated into nearly 55 percent gross domestic product (GDP) growth, enabling Angola to climb from being a low to a middle-income country.”
2. Rwanda
Rwanda, East Africa
One of the top performers in the World Bank’s ease of doing business ranking is Rwanda, moving up from 150th position to 50th between 2005 and 2011.
Though Rwanda has seen sustained economic growth since 2000, its history of violence and political instability has meant that it is still underdeveloped, especially in the retail industry.
According to Euromonitor, “retail spend per capita in 2011 was only US$35 compared to US$108 in Kenya.”
There have been a number of infrastructure developments and plans in recent years, including the development of residential areas, roads, hotels, offices and retail spaces. The Union Trade Centre, in the capital Kigali, is Rwanda’s first modern shopping mall, and has a 24-hour Nakumatt. In 2011 a second shopping centre, Kigali City Tower, was built in the same area, also anchored by Nakumatt. A new airport at Bugesera, 40km from Kigali, should be finished by 2016.