It’s no secret that Nordic companies need to sell in international markets to achieve rapid growth. With uncertainty in the EU and American markets, where should Nordic companies look for future investment? Over the past five years, almost two-thirds of the world’s economic growth was in emerging markets. China and India are held up as prime examples of this rapid growth, but for years economists have made an art out of predicting who will be next. There is one place Nordic economists and business leaders would be remiss to ignore: Africa.
Seven of the world’s ten fastest growing economies are in Africa. By 2050, Africa could see a meteoric rise from a $2 trillion economy to $29 trillion one, according to Renaissance Capital’s Global Chief Economist Charles Robertson. Along with that may come a doubling of population, a 13-year increase in life expectancy, and a sevenfold increase in household incomes, not to mention a rapid rise in education levels. With Africa poised for massive growth, now is the time to invest.
Nordic companies are uniquely positioned to capitalise on this growth since they have expertise that is in high demand in African economies. What are some ways Nordic companies can capitalize on Africa’s growth potential?
Export health equipment and MedTech
Many African countries import all of their medical equipment and most of their pharmaceuticals. The market opportunity is massive – according to Deloitte, healthcare spending in South Africa alone is expected to reach $39 billion by 2018. This presents a lucrative opportunity for healthcare equipment and pharmaceutical companies, but also for MedTech innovation. Mobile health, telemedicine, and early detection devices are particularly needed, and they offer exciting opportunities for Nordic companies.
Invest in urban infrastructure
Africa’s cities are booming. By 2030, it’s projected that 50% of Africa’s population will live in cities, up from 40% today (and just 28% in 1980). As people flock to cities, someone has to build the infrastructure to accommodate this rapid growth. Billions are being invested right now in building roads and railroads in Africa, and international partners have played a key role in projects like Lagos’ first metro line. Nordic countries have some of the best infrastructure in the world, and Africa’s urban growth provides a promising new market for Nordic infrastructure expertise.
Develop cleantech solutions for pressing challenges
Growing African economies aren’t without challenges, of course. Electricity, waste management, and water purification remain major issues. The Nordics lead the world in ecological sustainability – the top four countries in Yale University’s 2016 Environmental Performance Index rankings are all Nordic – making this a particularly fertile ground for partnership. Tackling these challenges can mean major growth potential for cleantech companies, with the added bonus of helping African cities leapfrog over the 20th-century systems that chained stifling pollution to rapid growth in cities like Beijing and Mumbai.
Sell consumer goods
In recent years, an increasingly affluent middle class has emerged in many African countries. With the rise in incomes has come an appetite for consumer goods, especially aspirational Western brands. Mobile phones, luxury items, alcohol, and sports equipment are all in particularly high demand. Incomes are projected to continue rising, so the demand for consumer goods is likely to just keep growing.
The world is changing, and Africa is no longer a place where the only money flowing in is from development aid. Africa’s growing markets are ripe for investment with potential for lucrative returns.
Learn more about business opportunities in Africa at Springboard’s African-Nordic Business Conference 2017 on May 4 in Helsinki.