Cote d’Ivoire tops Nielsen’s African investment list

12 May 2016

Cote d’Ivoire is the best sub-Saharan African destination for investors, with South Africa in the top seven, according to Nielsen’s 2016 African Prospects Indicators report. The report, the second published by Nielsen, collects and analyses business, retail and consumer information on sub-Saharan Africa for investors.

Nielsen’s assessment lifted Cote d’Ivoire above Nigeria as offering the best return on investment. Kenya, Tanzania, Nigeria and Zambia made up the rest of the top five, with Cameroon at sixth and South Africa at seventh place.

“Cote d’Ivoire’s position has improved based on its business outlook dimension, and it continues to rank top in terms of retail sentiment,” Allen Burch, Nielsen Africa MD, told CNBC Africa. “Despite the fact that it comes in third position on broader macro factors, its favourable economic growth and stable inflation climate and recent elections provide a fertile investment environment.”

One of the key macroeconomic indicators the report measures is inflation. For Nielsen, inflation indicates conditions directly affecting consumers and their ability to save, spend or invest. Higher inflation creates unfavourable conditions and constrains growth. Zambia, for example, is notable as having the best ranking for consumers.

Nielsen rankings: countries and categories

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Types of media used in Africa

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Overall opportunities for investment in Africa

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According to Tarek Sultan Al Essa, CEO of Board of Agility in Kuwait, one of the six reasons there must be investment in Africa is that the continent needs connectors. “Lack of infrastructure hinders growth of imports, exports and regional business,” he wrote in WEF Agenda. “Companies that can connect Africans and markets can prosper.

“Lessons from Dubai and Singapore tell us that once an infrastructure race is on in a rapidly expanding market, being the first mover is a significant advantage for investors.”

The other factors Sultan Al Essa cited as improving investment prospects in Africa are:

African trade barriers are falling and intra-African trade holds enormous potential

Increased processing of local commodities – such as minerals, coffee and cotton – rather than exporting them in raw form could drive growth. That said, it will continue to be a challenge for regions with poor power and infrastructure to compete as global manufacturers.

Customers are changing

“Educated, urban professionals are young, brand-aware and sophisticated in terms of their consumption,” said Sultan Al Essa, adding that small to medium enterprises need to meet the demands of working alongside international supply chains to better compete with global brands.

Digital transformation

Africa leads the world in mobile adoption. Improved communications infrastructure offers Africa new and innovative cross-sectoral economic opportunities. Ethiopia set up a telephone hotline in 2014 allowing small farmers immediate access to advice from agronomists. Over 3-million calls were received in the first six months of the pilot programme.

Africa is diversifying

African countries are packaging themselves to appeal to a broader set of investors. These countries are beginning to place bets on non-commodity areas where they can be competitive.

Africa can lead in sustainable development

It is an advantage that Africa has so much unused or poorly used arable land. This gives the continent the opportunity to reap big agricultural breakthroughs and improve productivity in food production.

Sources: CNBC Africa and the Africa’s Prospects Indicators digital report.