Many beginners in the export import trade do not give Africa top priority as a viable target market. This could be because of misconceptions about the commercial potential of the continent. It is remarkable though that the annual gross domestic product for this market accounts for a remarkable percentage of global figures. In fact, six of the top 10 fastest growing countries worldwide are found in Africa. Statistics also indicate that the three largest economies on the continent, South Africa, Nigeria and Egypt, account for almost half of the entire continent’s GDP every year.
South Africa is considered the gateway to the continent’s market as it is one of the most sophisticated economies in Africa. It features a lot of similarities with markets in western countries and holds the highest trade potential. It benefits from high financial stability, a remarkable infrastructure and friendly business policies and regulations. Nigeria has vast natural resource reserves in the form of crude oil. The consumption levels in this country are however significantly high thanks to the high population. Nigeria is the most populous country on the continent. According to Africa imports and exports statistics, it ranks highly on the list of top importers.
Africa as a whole has in the recent past enjoyed tremendous growth in both the economic and social sectors. French speaking countries in West Africa, DR Congo, Ethiopia, Angola and Kenya are other rapidly growing markets on the continent.
Here are some of the reasons for the boom:
- Growing Middle Class
The middle class represents a group of people who have high spending power thanks to a relatively high income level. They form the bulk of the consumer market and bring with them lots of business opportunities. This class has shown remarkable growth in the local market and this has been great news for traders dealing in African exports.
- Policy Reforms
Trade regulations in most countries have eased in recent years making the continent more favorable for trade. There is also a marked decrease in political instability and war torn countries are fewer now than ever before. It is no longer considered a high risk market and more investors are now willing to take the plunge.
- The Agrarian Economy
A high percentage of the African economy mostly centers on agricultural activity and the vast natural resource reserve on the continent. This is the main source of employment for the populace and foreign exchange to support growth. However, a majority of countries are now seeking to diversify and this has created numerous trade and investment opportunities. But because of the low industrial capacity prevalent across the continent, manufactured products have very high demand and limited supply in domestic markets.
Other factors behind the rapid growth in Africa trading trends include a rapidly expanding population, high rates of urbanization and reducing prices for technological gadgets. Let us take a look at the top performing products in this market that would make a good investment for Africa imports and exports traders.
Top Products Imported to Africa
- Consumer Goods
A notable percentage of African imports are consumer goods. In the past, the continent was viewed by some as a dumping site for the surplus from western nations but this is no longer the case now. The upwardly mobile consumer has specific demands and the popular manufacturing countries are working hard to meet these needs for African goods.
It is however a price-sensitive market and taking this into consideration, Asian manufacturers are producing affordable products tailored precisely for Africa. Even though some initially shied away from the low price target market, those who have mastered the art are making a fortune from it. China takes the lead as the major supplier on the continent closely followed by India.
The technology-related consumer goods sector is a particularly worthwhile endeavor. The appetite for these products is rapidly increasing and considering that only a small fraction of the populace already has access, the market potential is almost limitless. In proportion to annual income capacity, South Africans are spending more on such goods as mobile handsets and refrigerators than people in Japan, Europe and America. Similar trends are experienced in Nigeria with smartphones and hi-tech TVs taking the market lead.
- Pharmaceutical Products
Pharmaceutical products also make a sizeable bulk of products imported into Africa. The Indian subcontinent takes the lead in exporting these to Africa. This is because it is currently the global hub for generic goods. These drugs cost a small fraction of their original counterparts but are still effective and more importantly, attainable for the populace.
Even though the continent only accounts for approximately 15% of the global population, it bears over 24% of the world’s disease burden. This places demand for drugs at an all-time high and makes it a great business opportunity. There are a number of disturbing reasons driving this high demand.
These reasons include poor nutrition, limited access to vaccination and medication and quality healthcare and the warm tropical climate that favors disease and poverty. Poor hygiene and sanitation also make a great impact as they result in the rapid spread of infectious diseases. With the right drugs, most of the diseases crippling the continent can be treated. This makes it worthwhile and profitable to invest in the industry guaranteeing high returns.
Changing lifestyles also account for the rise in chronic diseases that were previously notably low on the continent. But the fact that the propagators of these new lifestyles also have higher spending capacity makes it a good market for drugs. Few countries have the capacity to produce drugs. They include South Africa, Morocco, Algeria and Egypt. They can hardly meet the local demand though necessitating importation of these products.
Considering these factors, healthcare product imports in general and generic drugs in particular have rapidly risen to popularity. They offer a viable option to the African populace and present a multi-billion dollar investment opportunity for discerning traders.
- Agricultural Equipment and Food Products
The Agriculture-based economy of most African countries necessitates a significant investment in related tools. But seeing as there are few manufacturers on the planet, large scale farmers mostly rely on imports to access the equipment needed for farming. At the same time, this continent is in most cases unable to meet food demands for its rising population.
Extreme weather conditions sometimes render a whole season’s worth of crop a total loss for farmers. This leaves a food supply deficit in the local market and more and more countries have to import food to meet basic needs. It has in fact almost crippled the African food exports market which left a very small portion of it functional.
Another factor leading to high food product demand is the middle class’ taste for processed foods. In fact, this account for a huge chunk of total imports into South Africa, Nigeria and other top economies on the continent. This demand is attributed to a changing diet that seems to favor western preferences.
Additionally, urbanization plays a major role in this regard as more people prefer quick solutions due to tight schedules associated with city life. Ready-to-eat food, canned products and bottled beverages have become more commonplace and most of the supply for them comes from external sources.
Seafood importation also presents a feasible prospect for Africa trading. Crustaceans, fish and mollusks are in high demand yet the local supply cannot effectively meet demand. There is a gap in the market that requires input from external sources and therefore provides a viable investment opportunity.
- Motor Vehicles
The automotive market has also shown remarkable growth on the continent. In the past, the market was dominated by low-cost vehicle models which offer poor performance and high luxury vehicles for the top cream of society. Manufacturers have since that time noted a gap in this market which provided a niche opportunity to the upwardly mobile middle class.
There are new vehicle models that offer great performance especially considering the rough terrain and poor infrastructure that define most countries. They are not too luxurious as to supersede the spending capacity of the society’s middle class. The expanding target population for these models and the increased spending power ensure consistent demand and high growth in this market.
Apart from disposable income, another factor that is driving automobile demand is infrastructural development. This has made motor vehicle maintenance a whole lot easier and reduced the burden on vehicle owners making it seem more appealing to own one. Toyota is the most dominant vehicle brand in Africa. Statistics from the firm show South Africa to be the current market leader accounting for almost 90% of the continent’s purchases.
A majority of vehicles sold here is second hand. Even though big importers focus on few wealthy buyers of high end vehicles, the collective demand for used cars in good condition makes this a worthwhile opportunity. The fact that vehicle ownership is still very low in most of the markets is a positive sign that there is significant room for growth in this sector.
At the same time, the demand for motorcycles is on the rise even in poorer countries. They are considered a viable means of transport particularly in rural areas. The growing demand for automobiles has also led to a subsequent rise in demand for spares and accessories.
African exports list places plastics on the list of top imports into the continent. Urbanization is the main driving force for the high demand and this is directly proportional to the demand for consumer goods. The urban population is the top target market for consumer goods. This usually requires some form of packaging hence for as long as these products are marketable, polymers will continue to sell.
There is some local investment in the sector but the production output is low compared to demand. Thus, most of the plastics used here are imported from Asian countries and the UAE among other sources. Africa still has a long way to go before it can manufacture plastics to match demand levels. This gives ample space for African products exporters to exploit and make top dollar.
Clothing is a basic human need and offers a lucrative business opportunity for import export Africa. A fast growing trend is used clothing mostly from the US and Europe. The used clothes are sold at low prices that entice the poor population which makes the majority on the continent. Even though some countries’ regulations currently do not sit in favor of these items, the majority of countries still accept them.
At the same time, China has come to the fore as a producer and distributor of brand new clothing items that are far below western market prices. These items have found favor in the market and form a sizeable portion of Africa imports wholesale in the fashion industry. They are usually lower priced imitations of top market trends and they sell rather fast resulting in a quick profit.
How Waystocap Can Help You Successfully Trade with Africa
For as long as these factors remain relatively constant, the trade potential offered by the African market will continue to be a viable opportunity for import export traders. Prevalent trends indicate that they are not likely to shift any time soon. Therefore, this offers great export opportunities to Africa for beginners and expert entrepreneurs alike. But when venturing out into a new market, taking the first step is often the hardest part.
This is where Waystocap comes in. With years of experience on the African continent market scene, we have valuable insight to offer traders. Our African B2B marketplace is loaded with useful resources to help you make your mark on this emerging market. We help you to partner up with buyers and suppliers creating a network to sustain your business needs.
Our platform offers a secure trading environment for beginners and experienced traders as well. We will help you to keep up with the changing regulations in this market and stay on the safe side of the law in every market of interest. Join Waystocap today and make the most of the import export business opportunities in Africa.