28 Feb Driving Benzes, Beemers and Porsches To Eat At KFC and Subway
If you have products or services for a large (200M+), and growing quickly, middle class economy, that has piles of cash to spend, you have unique opportunities in East Africa. Yes, it is as simple as that and it cannot be ignored.
The USA fast food franchises are popping up all over, albeit “pulled” in by non-American investors, and other indications that East Africans want to experience the “Western ways of life” are everywhere. Countless new shopping malls, big movie theaters, water parks and other recreational centers and luxury brand outlets like Porsche, Mercedes Benz, BMW, Rolex and more.
Oh, by the way CNN just reported there are nearly 200,000 millionaires in Africa and the average net worth is OVER US$100M. Do the math just for the luxury goods market!
So one of the reasons you may have not yet looked at East Africa is the famous old, and I mean REALLY old; “How do I get paid, nobody has any money?”
Well, put it this way, my wife and I recently took a long over due trip to the game parks in Tanzania (see previous post). Specifically, The Ngorongoro Crater and The Serengeti National Park and it was fantastic. Also, the one thing I was astonished by, and very happy to see was the number of African tourists enjoying the game parks. Now keep in mind foreign tourists are paying up to US$1,000 a night for the lodges in the parks. And, I must admit, as a former resident of Tanzania, residents pay about half the full rate. That said, African tourists that live OUTSIDE Tanzania pay the same as we do and the residents are paying upwards of $500 a night. AND, that doesn’t include the Safari vehicle, driver, park fees etc.
Yes, there are many wealthy Africans and the middle class is growing at an exponential rate. Forget about the tourism sector, just image how much money the same people are spending on simple consumer goods and other things you spend YOUR money on.
Some examples of sectors growing at incredible rates year after year include:
- Furniture, home and office. (Quality – they are tired of junk).
- Appliances, Electronics, Kitchenware
- Quality Clothing and Accessories
- ANYTHING for Children
- High end packaged foods, drinks, candies, etc.
- Personal Services, Spas, Health Clubs / Stores, Juice Bars.
- The list really goes on and on . . .
Now, I know that one of the other reasons, again another VERY STALE reason, people do not look at doing business in Africa is that: “Everyone is corrupt and it is an unfair playing field. We cannot compete because other people cheat and do not pay taxes.”
Well, all I can say is keep thinking that and watch your competitors rake in the sales and profits. Oh yes, very nice profits. The margins in East Africa are much better that the pressurized markets of the rest of the world.
The fact is, a lot of corruption is being eradicated. Governments like that of Tanzania’s President John Magufuli have attacked corruption in a way no other African leader has in history since taking office in November 2015. The result has been record tax revenue collections month after month. BUT, the biggest corruption killer in Foreign Direct Investment and new commerce. More jobs, higher paying jobs, job security (due to growing markets) are having a huge impact because more people are now making a living wage and don’t have to search for corrupt ways to survive.
Therefore, East Africa is exciting, growing fast and needs more companies and investors to meet the huge demands that will not slow down for the next two decades.
Don’t wake up one day and tell yourself you should have checked out East Africa.
Photo credit: cnn.com and shutterstock.com