Africa’s biggest companies are growing faster and are more profitable than their global peers, the McKinsey Institute said last week. In the second edition of its widely-circulated Lions on the Move report, McKinsey also said Africa “could nearly double its manufacturing output to $930 billion in 2025 from $500 billion today.”
Continued rapid growth of Africa’s largest companies is by no means assured, the report said, and governments will have to play a key role creating an enabling environment. Governments will need to “mobilize more domestic resources, aggressively diversify economies, accelerate infrastructure development, deepen regional integration, create tomorrow’s talent, and ensure healthy urbanization,” McKinsey said.
Nigeria, despite its current troubles, is one of the African economies that present companies with the most interesting opportunities, the report said. “Consumer-facing companies cannot afford to ignore the market even if the business environment is challenging,” it said. Its current troubles, though, seem to be deepening. According to Cpital Economics, the already moribund economy deteriorated over recent months. Nigeria’s “economy will probably continue to contract over the duration of 2016,” the research firm said this week.
-Frontier Markets Update