Ethiopia and Ivory Coast are the countries offering the best growth prospects in sub-Saharan Africa this year. They are followed by Mozambique and Kenya. Nigeria, once regarded as highly promising, drops into fifth place as a result of a slowing economy caused by low oil prices.
Also hit by oil pricing is Angola, which was previously ranked fifth in terms of growth prospects, but now drops dramatically to 16th position – behind countries such as the Democratic Republic of Congo (DRC), Zambia and Senegal. This is according to the African Prospects Indicators report released this week by research company Nielsen. The ratings for each country are based on macro-economic, business, consumer and retail factors.
Bottom in terms of growth prospects are South Sudan, Mali, Burkino Faso and Swaziland.
The countries ranked as the top four remain unchanged from the previous business survey and are considered ‘good’ growth prospects, says Nielsen. It also notes that business sentiment has dropped in Kenya, DRC, Congo, Zimbabwe and Zambia. “The majority of the countries which scored at lower levels have experienced ongoing instability which is reflected in a more cautious business outlook,” the report notes.
The Consumer Prospects Indicator contained in the report raises several red flags for marketers and notes that cash-strapped consumers are a reality in the region. “On average, food accounts for 30% of the African consumer’s basket, with this figure increasing to as much as 43% and 45% in Ethiopia and Angola. For consumers living in more impoverished conditions, the inflationary pressure on a basic basket of commodities is [even] more keenly felt.”
According to the Indicator, a like-for-like basket of essentials costs almost US$34 in Angola and US$27.50 in Ghana, compared to South Africa at US$15.33.
“As consumers struggle with rising overall expenses, product choice is of vital importance. Consumers are most likely to buy brands which are known, familiar and trusted. Fifty-seven percent also say they will buy brands that they have tried before. On the surface these factors appear as strong loyalty determinants, and more important than affordability or price,” says Nielsen. “In reality, this is a more likely indication of leaner financial times and cash-strapped consumers not being able to afford costly mistakes.”