Africa's rapid rates of urbanisation and population growth are creating one of the fastest growing labour forces and consumer markets in the world. Across the continent, state-owned enterprises have been privatized or are planning privatisation, trade borders have been opened, corporate taxes lowered, and regulatory systems strengthened, while most African governments are keenly focusing on promoting economic activity, raising prosperity and increasing national GDPs.
As a result of these reforms and this mindset shift, the continent has been attracting significant foreign investments, with billions of dollars in foreign capital inflows pumped into Africa every year. At the same time, persistent obstacles are becoming a thing of the past; corruption is being stamped out, incidents of violence are waning and stable regulation is being introduced and enforced.
As a continent with the largest and most varied natural resources, Africa has now become the main provider to emerging markets such as China, Brazil and India, as well as nations of the Arabian Gulf. The UAE government alone is estimated to have invested $97bn in the continent over the last 10 years.
The investment trend has definitely picked up. For example, UAE-based solar manufacturer, Mulk Holdings entered a joint venture (JV) agreement with Suzan General Trading in March to establish a new company, Alubond Africa in Kenya with an investment of about $25 million.
The new company is part of a two-phased plan to eventually set up factories producing the full range of Alubond USA metal composite panels, and to have a regional base for its solar energy solutions. Nigeria is in line be next for the JV partners, with a visit to explore the market planned for October.
"Consistent African economic growth in construction and energy, coupled with abundant natural minerals and metals is a sign that for the next two to three decades, business will be booming in Africa," says Arif Hafiz, group managing director of Suzan General Trading. "Hence our decision to enter this JV at the right time and we're confident that Alubond Africa will prosper and grow many folds in time to come."
UAE-based Splash, a mid-market fashion retailer and a unit of Landmark Group, also plans to access a number of African markets via franchise agreements and has signed deals to open outlets in Libya and Kenya.
When expanding into international markets in the past, including Egypt, where there are two Splash outlets, the firm typically invested its own cash, but now it is seeking franchise partners to do so. "It's easier and the person on the opposite side understands their markets very well and they can...