Financial expert Ted Bauman recently authored an article on Africa. He began by discussing the negative or outdated visions that the continent often recalls. Relatively few people know about the real situation in modern Africa and understand current economic trends, according to Bauman.
The investment guru went on to explain why the sub-Saharan region will surely experience swift growth in the decades to come. He believes that two major factors contribute to the expansion of any nation’s economy: an increasing population and rising productivity. Technological advances bring about greater production.
Experts predict that the continent’s population will increase by 100 percent during the next 30 years. This could cause its economies to expand more quickly than those of any other nation. Growth normally results in higher wages, enabling people to purchase more goods.
African commercial enterprises and individuals spent about $4 trillion during 2015. This figure could increase by almost 67 percent in the next 10 years, according to economic experts. Bauman commented that people have begun to change their shopping habits as incomes rise and transportation systems improve.
Many Africans currently shop at small retailers and local markets. However, Ted Bauman believes that they will gradually switch to large grocery stores and malls. People may begin to embrace online shopping as well. These trends have the potential to create lucrative economic opportunities.
Bauman’s commentary pointed to multiple rapid technical advances that have occurred throughout the region. Developing countries don’t necessarily need to follow the Western path to technological progress. The Banyan Hill Publishing editor highlighted voice communication and mobile banking as two examples.
Most Africans have never held traditional checking accounts. They skipped over this form of banking and embraced mobile financial services. Over 115 million accounts exist on the continent, according to Bauman. Customers use cellphones to manage their money instead of visiting conventional bank branches.
Landline telephones have remained unavailable to most Africans who don’t live in large cities. Numerous people gained enough wealth to afford phones during the last 15 years, and they adopted cellular technology rather than corded equipment. Consequently, Africa has become the biggest consumer of cellphones except for Asia.
This combination of a growing populace and rapid technological progress give the continent a remarkable potential for economic advancement. However, Bauman notes that his prediction isn’t only based on theories. Current statistics confirm the existence of a trend toward swift growth. Six African countries rank among the 10 economies that expanded most rapidly in 2018.
Although Ted Bauman presently resides in Georgia, his long-term experience in South Africa helps him offer wise insights. He provided consulting services to government officials and various nonprofit groups. The financial expert worked in Africa’s southernmost nation for more than two decades.
Bauman earned history and business degrees at Cape Town’s university. His writings have appeared in multiple South African publications, such as the New Internationalist and Cape Times. Bauman’s charitable work has helped provide affordable housing to people across Africa and the developing world.
Financial data and forecasts support Bauman’s assertions about the continent’s potential. In January, the World Bank predicted that sub-Saharan economies would grow by 3.4 percent. African Development Bank officials forecasted a growth rate of 4 percent in a recent statement. The total size of the region’s economies expanded by 3.5 percent during the previous year.
The Brookings Institution issued a relevant report in January. It highlighted several investment opportunities in Africa, such as an increasingly prosperous manufacturing sector with a wide range of products. The authors predicted that this continent’s factories could increase their output by almost 100 percent during the next six years.
They pointed to the potential for significant growth in the automotive, food processing and chemical sectors. Africa may begin to export more products soon. The report also remarked that businesspeople frequently perceive investments in Africa to be perilous when the actual risk level is comparatively low.
Another recent Brookings Institution document focused on the continent’s progress and supplied several compelling facts. Over 400 African firms generate at least $1 billion in revenue each year. Governments spend approximately $80 billion on infrastructure, a number that has increased by about $40 billion since 2000.
The report discussed appealing business opportunities in the medical, education, food, communication and finance sectors. It also mentioned growth in the tourism industry. Some successful enterprises primarily serve foreign customers or visitors, but many companies concentrate on meeting the needs of the local population.
Although Bauman’s commentary focused on the entire continent, some nations currently appear to hold greater economic potential than others. Countries like Ghana, Uganda and Burkina Faso have achieved extraordinary growth rates in recent times. For instance, Rwanda’s economy typically expands by more than 7 percent each year.
This relatively small nation has worked to enhance its infrastructure and manufacture more goods. African Business Magazine reports that the government intends to boost exports of building materials, clothing and leather products. Although a textile trade war has curtailed dealings with the United States, Rwanda increasingly benefits from business relationships with other nations like France and the United Arab Emirates.
Ethiopia has also attained an impressive growth rate. Its economy expanded more quickly than that of any other African country in 2018, according to CNN. Like their Rwandan counterparts, Ethiopian authorities have taken steps to bolster the nation’s manufacturers.
Many Ethiopians continue to work in agriculture. Nonetheless, the service sector produces more revenue. The government operates large portions of the economy, including the national airline, banks, communication networks and transportation systems. It has launched a major effort to achieve greater prosperity by improving the country’s infrastructure.
Ted Bauman could also point to the economic situation in Tanzania as proof of Africa’s extraordinary potential. Despite the worldwide recession of 2008, the coastal nation’s economy has grown approximately 6 percent every year since 2009. Gold mining helped both Tanzania and Ivory Coast become less dependent upon agriculture.
More and more businesses have begun to process materials locally. This strategy greatly increases the value of commodities and helps sub-Saharan economies grow. For example, some countries have started producing coffee instead of simply exporting the beans.
The African Continental Free Trade Agreement recently took effect. It reduces tariffs that apply to intra-African transactions. Nearly all African Union members signed the Fact, and more than 20 countries have ratified it. This agreement could benefit the continent’s chemical, textile, food and electronics industries, according to the World Economic Forum.
African nations want to attract a wider range of investors from countries around the globe. Numerous governments have established agencies that help foreign businesspeople learn how to set up new enterprises in Africa while complying with unfamiliar laws and respecting local customs.
Ted Bauman also hopes to assist investors who want to benefit from these emerging economies. He has promised to provide detailed instructions on how to invest in Africa’s retail market in an upcoming issue of The Bauman Letter, a financial advice newsletter that Banyan Hill releases each month.