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Population estimates from the United Nations Department of Economic and Social Affairs tell us that the world's 15 fastest-growing cities are all in Africa. This is because Africa has the youngest population of any continent, with some 75% of our people aged under 35. It’s a massive and very attractive market.
The Chinese have long understood this. They know what an opportunity Africa presents, and they’ve spent years taking advantage of our continent’s growth by supplying the products Africans crave. It seemed nothing could stop them… until the coronavirus.
I’s not just Africa where China has become the dominant supplier of goods. This was highlighted by Bruno Le Maire, French finance minister, who said this week that the virus highlighted an 'irresponsible and unreasonable' reliance on China. He called the coronavirus a game changer that will require a rethink in global supply networks. He’s right.
Economically, this is no minor slump. It is set to reshape the global economic landscape.
Such is the power of the disease that it has shut most of China down: flights into and out of the country have largely been suspended and raw materials and equipment have dwindled, slowing production of the millions of goods the country churns out for sale to the rest of the world. And Africa is a significant market for other Asian countries too, such as Taiwan, South Korea and Japan, all of which are struggling in the wake of the coronavirus.
All over the world, major cultural, sporting and economic events have been suspended. The virus is destabilising markets and affecting the ability of companies everywhere to do business. Italy is on lockdown; Hong Kong schools are closed for at least the next two months; even the Tokyo 2020 Olympics, scheduled to start in July, are under question.
Opportunity knocks
There's a lesson here in over-reliance. But the fact is that we’d also be foolish not to take advantage of this moment to claim some new territory. According to McKinsey and Company, consumer spending in Africa is projected to reach $2.1 trillion by 2025, by which time one fifth of the world’s people will be living in Africa and the 65% of African households will be in the discretionary spending income bracket, so there will be a shift from basic necessities toward more discretionary products.
This gives South Africans a great incentive to fill the gap left by China and the other traditional Asian suppliers to the continent. There is no reason that we can’t supply the goods they do. And it’s not just manufactured goods that aren’t getting to Africa right now; farms and fresh food supply are being severely hampered too. There's an opportunity to turn our resources into the products that Asia simply can’t supply right now.
Let’s not kid ourselves – the coronavirus will impact African trade eventually. But for anyone who is prepared to take a risk to get a foothold into the rest of our continent, this is your moment. Any good businessperson knows that capturing a new market is half the growth battle won, so bolster production and take Africa by storm. The time has never been better for South Africa to make a cross-border play.
Andrew Robinson is co-founder and executive director of SiSebenza. Views expressed are his own.
