Sub-Saharan Africa: A Rising Economic Frontier?

July 2023

The report analyses the economic state of Sub-Saharan Africa. It seeks to assess the opportunities in the region against the backdrop of its young, large and fast-growing population, as well as the bottlenecks Sub-Saharan Africa faces, including widespread corruption, infrastructure challenges and skills shortages. It ends with some key business takeaways for Sub-Saharan Africa and concludes on the region’s potential as a rising global economic frontier.

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This report comes in PPT.

Key findings

A rising economic frontier with uneven growth

Sub-Saharan Africa is a rising frontier, but economic growth will remain uneven across the region as countries will remain at varying stages of development. While GDP is forecast to more than double in real terms over 2022-2040 in Sub-Saharan Africa, most of the progress will arise from East Africa which is set to become one of the fastest-growing regions in the world.

Sub-Saharan Africa remains a small economy despite its large population

In 2022, Sub-Saharan Africa accounted for 15% of the global population, yet its economic footprint was lower, generating just 2% of GDP. An overly large dependence on less productive sectors of the economy, especially agriculture, inhibits economic growth.

Critical challenges are holding back progress

Sub-Saharan Africa remains mired in corruption, macroeconomic instability and poor infrastructure, among other challenges. This greatly reduces the region’s ability to progress and improve the standard of living of its population. In 2022, more than half of the urban population was living in slums, while poverty remains rife.

However, the region does present significant, opportunities

Sub-Saharan Africa presents numerous opportunities which include the region’s digital economy, green economy, natural resources, consumption potential and improving value chains. Its large, young and growing urban population will supplement the region’s labour force and will help it capitalise on its large demographic dividend. 

Commercial entry strategies require careful due diligence

Sub-Saharan Africa remains a heterogenous economy with countries at different stages of development. Yet a uniting factor is that many are endowed with relatively weak economic environments. Commercial strategies will require careful due diligence, including prioritising economic stability over high growth and building a diverse portfolio to mitigate risk.

Key findings
Why focus on Sub-Saharan Africa?
Sub-Saharan Africa in 2022 and 2040
Economic progress of the 2000s undone by a myriad of adverse factors since the mid-2010s
Sub-Saharan Africa could have been USD700 billion richer based on growth trends pre-2015
Nonetheless, some countries have continued to deliver strong economic growth since 2015
Regional economic balance has been shifting from South to East and West Africa
Low wealth has curbed Sub-Saharan Africa’s progress in raising living standards
Business registrations have surged in Sub-Saharan Africa, but business density remains low
Sub-Saharan Africa has been the fastest urbanising region but remains largely rural
Economic : Diversification is needed to improve macroeconomic stability
Political: Sub-Saharan Africa remains entrenched in corruption despite improvements
Environmental: Food insecurity needs to be addressed in the face of climate change
Social: Poverty and inequality remain bottlenecks to future growth in Sub-Saharan Africa
Other key challenges
Areas of opportunity in Sub-Saharan Africa
Digital economy: Sub-Saharan Africa is accelerating its digital transformation
Digital economy: High proportion of the unbanked offers opportunities for fintech providers
Case study: Raxio to build seven data centres in Sub-Saharan Africa to boost digitalisation
Green economy: Focus on green energy can be a driver and enabler of economic growth
Green economy: Green Bonds can provide financing for climate-related projects
Green bonds finance Angola’s largest ever solar power project
Natural resources: Sustainability shift can offer opportunities to tap natural resources
Case study: MMG to expand mining operations in Democratic Republic of the Congo
Case study: BHP Group invests USD100 million in Tanzania’s nickel mining industry
Consumer spending: Large opportunities to grow modern and informal retailing
Case study: Carrefour opens its first hypermarket in Cameroon
Case study: Wasoko provides more efficient access for small informal retailers
Value chains: AfCFTA can promote regional trade integration in Sub-Saharan Africa
Value chains: Sub-Saharan Africa can be a key intermediary in manufacturing value chains
Case study: Stellantis reaches a preliminary agreement for a production site in South Africa
Case study: Atlantic Group seeks to build a cocoa processing plant worth USD108 million
By 2040, Sub-Saharan Africa is to more than double its GDP but will remain a fringe economy
South Africa and Nigeria are to see their influence fade amid growth in other economies
East Africa is expected to overtake southern Africa as the second largest regional economy
Sub-Saharan Africa is expected to account for one third of global urban population growth
Sub-Saharan Africa spending to grow, but will remain low relative to other global markets
Top five recommendations for commercial success in Sub-Saharan Africa
Sub-Saharan Africa is a rising economic frontier, but has several obstacles to overcome


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