Johannesburg - African households are becoming ever-richer as the continent's economies surge forward, offering enormous untapped growth opportunities for consumer companies, a report released Wednesday showed.
A McKinsey & Company study showed 84% of Africans were "exceptionally optimistic about their economic future", with urban Africans already spending more on apparel and food than those in Brazil, China and India on average.
"By 2020, more than half of African households are projected to have discretionary income, rising from $85m households today to almost $130m in 2020," said Bill Russo, the co-author of the report titled: 'The rise of the African continent.'
According to Russo, despite the increasing wealth, companies had failed to seize the opportunity presented by Africa.
Russo advised companies considering entering Africa to concentrate on the countries and cities with the most promising markets.
"Viewing Africa as a single market is unlikely to get results since the continent comprises 53 countries with more than 2 000 dialects and languages," said Russo.
Out of the continent's 53 countries on the continent, growth opportunity was concentrated in 10 countries: Algeria, Angola, Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, Sudan, and Tunisia.
These economies accounted for 81% of Africa's private consumption in 2011.
Cities like Abidjan in Ivory Coast, Khartoum in Sudan and Rabat were described as "middleweight" destinations, with a prospect of less competition and better margins.
The survey showed that African consumers were brand conscious and demanded quality products, dismissing the view that the continent was a dumping ground for second rate merchandise.
It cited the expansion of consumer goods retailers like US giant Wal-Mart to Africa as an indication of faith in the region. In 2011 Wal-Mart bought majority shares in South African group MassMart, which has presence in a number of southern African countries.