According to the latest study by CEO Africa, top African countries in terms of economic growth owe their success to the youth embracing technological innovation with fresh ideas. In the upcoming fourth edition of Rencontres Africa to be held in October, nations in the region will gather in the spirit of commitment to bolster economic growth.
CEO Africa highlights the outstanding cities in Africa that are making a name for themselves for their rapid economic development, therefore making them conducive to setting up a business. The indicators for the study include data from renowned institutions such as the following:
- Doing business with the World Bank
- Quality and cost of living by Mercer rankings
- Global Index of Innovation by Cornell University, INSEAD Institute and the World Intellectual Property Organization
- Global Competitiveness and Talent Index (GTCI)
- AfDB African Infrastructure Development Index
- Global Entrepreneurship Index
- The Afrasia report on HNWI (High Net Worth Individual)
Other indicators for the study include the number of incubators that help start-ups survive, co-working spaces as alternatives for the traditional classic office set-up, amount of revenue earned by start-ups, quality of projects by entrepreneurs size of local market that will provide sales and enable businesses to flourish.
What are the industries to invest in?
The fastest growing industries are that of consumer driven ones such as financial and consumer goods. Next comes healthcare and education, followed by the agricultural sector. Infrastructure is also an excellent sector to invest in. the growing interest in technology and the young, skilled labor in this sector make it an interesting sector to invest in. Tech hubs have sprouted in several countries of the continent and are rapidly evolving. In fact, Kenya, Malawi and Rwanda are embracing technology to apply it to their agricultural sectors. That includes imaging satellites, weather forecasting equipment and soil sensors.
Who are the top investors in Africa?
China leads the way with around 10, 000 firms implanted across Africa. A feat largely attributed to its Belt and Road project.
Tailing behind China is another Asian giant, Japan. It has already been working with East Africa: Rwanda, Ethiopia, Kenya, Nigeria and South Africa. Next comes the European Union and the United States.
Top 5 Cities to Invest In
Cape Town, South Africa
Cape Town is the ultimate success story of Africa and today, is the top city to invest in the region. Known for its tourism industry and political history, Cape Town has the fastest growing ecosystem for start-ups in Africa. While challenges still exist, there are also a lot of advantages such as its strategic location and the fact that a lot of major companies have Head Offices in the city.
Johannesburg, South Africa
Johannesburg has one of the strongest and most diverse entrepreneurial ecosystems in the region. The city has set up a number of incubators and accelerators for a successful business environment as well as development organizations that offer benefits and resources to aid entrepreneurs with their business ventures.
Port Louis, Mauritius
In the advent of technological innovation, Port Louis attracts a diversified range of businesses coming from different sectors. Tourism, business processing and outsourcing, financial services and other promising sectors make up the vibrant thriving entrepreneurial ecosystem. And the thriving business environment also trickles down to neighboring cities such as the Ebene Cybercity. It hosts 350 companies that greatly contribute to the prosperous economic development and technological innovation of the island.
Cairo, Egypt
Cairo has a huge domestic market and the country has also embraced technology to drive its economic growth. They have a large domestic market as well as human capital to fish talent from in order to keep their technological innovations moving. Support structures in technology are: Flat6Labs Cairo, Ebni, EdVentures, Falak Startup and more. Egypt has a very strategic location geographically to its neighboring Arab States, which is its advantage for having endless potential for financing startups.
Casablanca, Morocco
The Casablanca Technopark and other support structures such as Bidaya Space, Impact Lab and New Work Lab drive Casablanca's economic growth. Technology is the main sector that is contributing to the country's economic development with distinguished number of patents filed per capita as well as venture capital for tech related industries. The city is also known as the 6th most innovative cities on the African continent.
In summary, businesses get to enjoy an ecosystem that supports them in order to grow their ventures in Africa prosperously. A region once overlooked for its lucrative business potential because of its political instability, it is now recognized worldwide for its major improvements in providing a ripe location for start-ups to grow. The digital revolution in the region is very promising. The World Bank predicts that the continent could increase growth per capita by 1.5 percentage points per year. This positive effect can reduce poverty by .7 percentage points per year. If Africa continues to invest strongly in its human capital, the positive effects of it will be doubled. With training of skilled people to fill newly created jobs and institutions equipped with Internet to empower its citizens, the continent's future looks very bright.
