CONSULTING
Our prime focus is in growing a portfolio of development project investment in Africa.
The region has already made big strides below the radar. It now stands to become the developing world’s next great success story. In fact, the International Monetary Fund acknowledges that by 2015, seven of the world’s top 10 fastest-growing economies are African. The future for Africa has never looked brighter. Over the next several decades, sub-Saharan Africa will continue to attract the highest rates of foreign direct investment (FDI) inflows per capita of any developing region. Business case studies on the continent suggest that risk-adjusted returns for new investors on the continent have never been higher.
The times they are a changing!
New markets, new business models, new opportunities for those ready to catch the wave!
Private Equity firms are now beginning to focus more on Africa's growing consumer base instead of their traditional pursuit of natural resource commodity developments. "Demographic shifts, including an increasingly urbanized population with more disposable income, mean that Africa presents a staggering amount of opportunities for businesses that serve these shifts," AVCA said in a recent research report. "PE investors are perfectly positioned to invest and benefit from this demographic shift by investing in businesses that support what is still a hugely under-served emerging middle class population." Regionally, West Africa—driven by powerhouse Nigeria—is getting the most investment, about 25 percent of all African PE transactions, according to AVCA. South Africa, previously the leader, is second at 24 percent.
The complexity of Africa often requires turning conventional thinking on its head, as is illustrated by South Africa-based ‘Shoprite’, the largest food retailer on the continent. Shoprite has expanded from eight supermarkets in Cape Town in 1979 to 1,500 stores in 16 African countries today, thanks in large part to an automated supply chain that leverages centralized procurement—resulting in reduced costs and improved service levels. The consumer class is expected to top 300 million by 2025. So making those brands affordable to them in everyday, on-the-go options is compelling.” Indeed, despite high food and fuel prices, consumers in Africa continue to spend; the growing middle class has boosted consumption, residential construction, and private investment. New products and services will require new ways of configuration to suit the distinctive needs of a young, increasingly more urban population—a population that aspires to consume more sophisticated products and services and indeed, the as yet undeveloped potential phenomena of ground-breaking new spending power from the untapped millions of AFS trained entrepreneurial subsistence farmers as they take up the AFS agroforestry initiative, increasing their yields and harvests by 6 to 10 times existing levels and thus begin to enjoy surplus income and improved living standards. Forecasts point out that African GDP per capita should continue on its positive trajectory of a 4.5 percent compound annual growth rate (CAGR) through 2015. That would mean a more than 35 percent increase in spending power. Combined with strong population growth (2 percent) and continued urbanization (3 percent), this increase leads us to estimate that 221 million basic-needs consumers will enter the market by 2015. The African consumer is undoubtedly on the rise. Many consumers have moved from initial destitute levels of income, then to the basic-needs level and now to growing middle-income levels. Many millions of additional households now can enough discretionary income to take their place as consumers – and if more embrace AFS led initiatives, we have barely reached start up consumer potential. AFS recognises that all these new consumers require banking accounts/facilities and products to purchase. AFS recognises that this evolution is critically important to consumer-facing businesses, from fast-moving consumer goods manufacturers to banks to telecommunications companies. AFS clearly recognises and understands that when people begin earning money at and above the basic-needs level, they blossom and start buying and consuming goods and services. History points out that when a country achieves a basic level of income, growth rates accelerate three to fourfold. The enormous expansion of mobile telephony in Africa provides clear evidence of this phenomenon.
Our prime AFS focus is therefore to grow a portfolio of development project investment in Africa to capture this unique window of opportunity through harnessing our Consultancy services to win and service business from the emerging and enterprising consumer marketplace which will soon typify the new Africa.
The region has already made big strides below the radar. It now stands to become the developing world’s next great success story. In fact, the International Monetary Fund acknowledges that by 2015, seven of the world’s top 10 fastest-growing economies are African. The future for Africa has never looked brighter. Over the next several decades, sub-Saharan Africa will continue to attract the highest rates of foreign direct investment (FDI) inflows per capita of any developing region. Business case studies on the continent suggest that risk-adjusted returns for new investors on the continent have never been higher.
We seek to create positive economic impact and long-term value for ourselves, our clients, our joint venture partners and our investors through the immense potential of exclusive opportunities we will bring forward for their consideration as Joint Venture initiatives. Our team of AFS experts are rich in African and International Development experience. Unlike others however, we recognise that to deliver sustainable projects and portfolio investments, will involve harnessing innovative approaches to identify our exclusively identified, rapidly emergent, new market opportunities We will work closely with ever more efficient African Governments, striving to eliminate inefficiencies, corruption and reliance on aid budgets instead of encouraging funds to invest in creating trade and employment.
All our recommended initiatives for investment balance opportunities and risk, recognising that when properly managed, the risks of doing business in Africa are more than worth the rewards and that opportunities abound for those with exclusive insights and foresights to capitalise upon ‘first-mover’ advantage.
We have learned from our front line participation that although Africa’s economic prospects are bright, they differ not only country by country but also sector by sector. Bearing this in mind, we recommend our prospective Investment Funders and Clients to initially consider the following five ‘AFS Consultancy’ sectors for engagement and even mutual investment;
Farming & Agroforestry Banking & Financial Services
Telecommunications Oil, Gas & Unconventional Energies
Mining
These sectors are fully supported by our ongoing AFS Capacity Building educational programmes which are delivered by through our Academy courses. These programmes help grow sustainable African employment, personal and corporate earnings and wealth to assist the advancement of a new strata of healthy Consumerism and help spread economic prosperity across the continent.
Market Notes – Current and Future landscape
As many as 200 million Africans will have entered the consumer goods market by 2015.
Banking and Telecommunications are growing rapidly and Capacity Building infrastructure expenditures are rising significantly faster in Africa than in the world as a whole.
Notwithstanding the impressive growth of extractive industries, in addition, the continent has more than one-quarter of the world’s arable land.
Eleven of Africa’s countries rank among the top ten sources for at least one major mineral.
Africa will have produced 13 percent of global oil production by 2015, up 9 percent from 1998.
African leaders now recognise that short term (reversible) initiatives must be replaced by sustainable and permanent commercial solutions. They further understand that well intentioned Western interventions, mostly introduced through delivering international Aid must be replaced by the encouragement of Trade incentives and support which will bring employment, commerce and economic growth to the Continent
Trades empowering women and young people are to be given encouragement and priority.
A prime conduit being Agriculture and Farming where, through the adoption of the AFS project programmes embracing education in agroforestry techniques and entrepreneurism and offers significant employment,
Food surpluses will create new markets and will create a massive new strata of consumer spenders, savers and investors. Accordingly, the African economy will enjoy a massive injection of upcoming growth from the improved earnings and livelihoods from a massively populated and better educated and insightful emerging workforce.
Remittances and knowledge transfer from the global African diaspora will play a major and growing role in the growth of this Continent in the immediate future and beyond.