Despite all the disruption caused by COVID-19, one trend during the global pandemic looms unabated. And this means that five of the world’s 10 fastest-growing countries remain based in Africa, with at least a few more countries on the continent poised to outperform the world in the next two years. This means that
Speaking of coronavirus, accelerated the transition Wireless and remote commerce with traditional natural resource exporters has become possible among 54 African countries, where the average age of people is younger than in other regions.
Three years ago, Uganda, Ivory Coast, Egypt, Ghana, Rwanda and Kenya were among the world’s top 10 fastest growing countries as measured by gross domestic product growth. The same countries except Egypt dominated again in 2021 and 2022, with Rwanda’s GDP expanding by 11.1% and 8.2%, compared to the global average of 6.3% and 3.5%, according to data compiled by Bloomberg. .
If this forecast is to be believed, Rwanda will once again lead the continent with an estimated growth rate of 6.8% this year, followed by Mozambique at 6.4%, Cote d’Ivoire at 6.2%, and Ethiopia and Uganda at 5.5%. Dew. That’s just 2.8% growth. As of 2018, only three African economies were in the world’s top 10 in terms of pace of expansion.
The sub-Saharan telecommunications industry is a huge industry with exceptional performance and revenue growth in the stock market. Sales at the region’s 15 largest companies are expected to rise 18% this year and 9% in 2024 and 2025, after growing 29% in the past five years, according to analyst estimates compiled by Bloomberg. is.
Ghana base Scancom PLC Leading the group with sales growth forecasts of 34%, 23% and 21%, South Africa’s Vodacom Group Ltd. (26%, 6% and 5%), Nigeria-based MTN Nigeria Communications (23%, 18% and This is followed by 16%). %). Such strong growth is unparalleled in a world where telecommunications revenues have increased by 20% over the past five years, increasing by an average of 1% this year and rising by less than 3% in 2024 and 2025. It is predicted that this will happen.
Ralph Mupita, CEO of South Africa-based MTN Group, said: “Due to the impact of COVID-19, demand has changed significantly as people go online and move into their homes. “We saw very strong growth in both fintech and fintech services.” He said this at an earnings conference with analysts in March. “Structurally high demand for data and fintech services remains across the market, which is driving the growth seen in financial as well as non-financial numbers.”
In sub-Saharan Africa, there are 96 wireless accounts for every 100 people, and some people have multiple accounts. This is 39 times the initial usage in 2000. According to data compiled by Bloomberg, South Africa and Ivory Coast have more than 160 accounts per 100, while Central Africa and Mozambique have fewer than 50 accounts, meaning business continues to grow at breakneck speed. ing.
The outlook for African companies is equally good, with financials, communications and consumer staples industries set to outperform the rest of the world in 2024, based on analyst forecasts compiled by Bloomberg. Telcos’ revenue is expected to increase by 11%, higher than the global average of 3%. Financial institutions will account for twice the global rate of 7%, and daily necessities will account for 10%, overwhelming the 6% predicted by global peers.
Ghanaian companies will lead sub-Saharan Africa with revenue growth of 34% in 2023, followed by Nigeria at 32% and Namibia at 20%. Scancom, an Accra-based wireless communications company, has achieved a total return (earnings plus valuation) of 202% since its 2018 initial public offering. Emerging market stocks rose just 5% on average over the same period.
assets of Zenith Bank PLC Since its IPO in 2004, it has increased 109 times to $27 billion. The stock is up 91% in the last year, and analysts expect it to rise another 27% over the next 12 months. Capricorn Group, an investment firm based in Windhoek, Namibia, has seen its revenue increase by 51% in the past few years and is expected to increase by 7% in 2024, according to data compiled by Bloomberg.
Even in a bond market where most investors are suffering the biggest losses of the new century (-5% for global government bonds), Africa is proving to be relatively prolific. Ghana’s government bonds had a return of 20% (income + valuation) in 2023, followed by Mauritius and Zambia at 11%.
Such investor confidence cannot be achieved without Africa’s continued extraordinary growth.
Author Matthew A. Winkler is editor-in-chief emeritus of Bloomberg News.
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