Part 1: What Does the Market Look Like?
Deciding to expand a business internationally isn’t always the easiest decision. It requires due diligence that must include market research, supply chain considerations, and of course, a sound expansion plan—and that's just when expanding domestically.
International expansion plans increase this process tenfold in terms of both research and intensity. However, the benefits of pursuing economic opportunities in international markets outweigh the challenges of planning—if planned wisely. And that begins with identifying advantageous target markets. For an increasing number of organizations, that means expanding into one or more of Africa’s 50+ countries.
Africa’s unique emerging market offers excellent growth opportunities and an able and skilled workforce spanning much of the continent. As the world’s most central continent, it’s the perfect hub to reach the rest of the world. It's also considered one of the most profitable regions in the world, as it’s home to some of the most profitable businesses, making it a top choice for short- and long-term expansion projects.
Companies like Sonatrach and MTN Group are some of the top-performing companies in Africa and, as the economy keeps growing, these companies will enjoy a continuous upward curve in revenue.
As of 2023, Africa has experienced GDP growth from 3.8% to 4% and is still showing great potential for further growth. When including all countries across the continent, the total GDP currently stands at an estimated $3.1 trillion, and upward trends indicate an expected growth of approximately $2.1 trillion. However, as Africa includes 50+ economically, politically, and culturally diverse countries that offer different expansion opportunities and challenges, wise organizations will explore different countries and regions before committing to the continent.
Despite the booming economy, expanding into Africa doesn’t come without its challenges; the African business market remains underestimated and misunderstood by many. But if managed well, investing in Africa will yield high returns. Whether or not a business expands into Africa will depend greatly on the sector and the organization’s growth plans. No matter the industry, it’s essential to perform proper due diligence before making the move. The following sections will focus on the pros and cons of expanding into Africa, the challenges expansion may impart, and a proven solution to mitigate risks and capitalize on unique opportunities across the world’s most promising market.