Africa holds great promise for consumer goods companies. Observers say that consumer spending will rise sharply in the next five years. Brookings predicts that household consumption will reach $2.5 trillion by 2025.
Kenya is among African countries expected to experience strong growth in consumer spending. NKC African Economics predicts that Kenya’s household spending will increase by more than 5 percent in 2020. Other African countries expected to record significantly higher household spending in 2020 are Egypt, Ethiopia, Tanzania, Uganda, Rwanda, Ghana, Ivory Coast, and Senegal.
The increased spending will be driven by the fast economic expansion, rapidly growing working population, increased urbanization, and technological advancement in the continent.
The continent has some of the world’s fastest-growing economies. As a result, personal income in most households in Sub Saharan countries has improved. Additionally, increased internet connectivity and mobile phone penetration has improved the lives of many people on the continent.
Jacques Nel of NKC African Economics told Bloomberg that by 2025, Africa’s consumer spending will be 40 percent of the US consumer spending, the leading nation in household spending.
As a result, multinationals such as Jumia, Walmart, Carrefour, GE, and Volkswagen have set up shops in Sub Sahara Africa to benefit from the increased personal spending.
Enhanced consumer spending will provide employment opportunities for many unemployed youths and result in economic growth.