A continent of immense opportunities
Africa is a market of challenges and immense opportunities for German companies.
According to forecasts by the United Nations, over 2 billion people will live in Sub-Saharan Africa by 2050. This rapid population growth brings a host of opportunities: the International Monetary Fund forecasts an almost 6% rise in GDP for 2015. However, “given the huge population increase these rates are not sufficient to eliminate poverty,” maintains a report by Germany Trade and Invest. Moreover, safety and health risks pose additional challenges.
Despite this, Sub-Saharan Africa is an attractive market for German firms. In recent years, major German automotive corporations such as Volkswagen (VW), Daimler and BMW have continually expanded production in South Africa and modernised their plants. Indeed, the VW plant in Uitenhage, South Africa, is one of the firm’s most environmentally friendly productions sites. German small and medium-sized enterprises (SMEs) are also increasingly getting involved. In a study by the German-African Business Association, experts state they expect huge opportunities particularly in the ICT sectors. Yet German firms are also active in other sectors today. For example, Hansgrohe has been selling its bathroom fittings to Africa for 20 years now. Several years ago, cement manufacturer Schwenk invested 250 million euros in a factory in Namibia. German industrial service provider Ferrostaal has been willing to spend over a billion euros in constructing a fertiliser complex in Tanzania that is run on natural gas. Young firms are also discovering the continent, such as Berlin business startup Mobisol. The firm is highly successful on the southern continent with its compact solar systems for private households.
