Mozambique among the fastest growing economies in Africa

economies in Africa
3 min read

Mozambique has made it to the top three of the fastest growing economies in Africa, according to a new report, “Shifting Market Frontiers: Africa Rising”, published by Euromonitor International.

The research shows that South Africa and Nigeria will no longer dominate the African continent by 2030. Although these two powerhouses together currently account for nearly 50% of the continent’s GDP, by 2030 South Africa and Nigeria will represent just 37% of Africa’s total GDP.

Instead, all eyes will be on Mozambique as well as on Ethiopia and Rwanda as the three fastest growing economies.

Tour operators in Mozambique have welcomed the new research, saying that a growing economy will lead to a boost in tourism for the country.

Stephanie von Allmen, GM Dana Tours, told Inside Travel that a stronger economy would likely lead to general improvements within the country in terms of infrastructure, accessibility, product and service offerings which would contribute to an increased number of travellers into the country.

She said: “It would be great if we see a boost in the country’s tourism budget so that we can further invest in promoting the country as the untouched tourist destination that it is. A stronger and bigger economy would also mean increased job opportunities within tourism in the country which would benefit the locals and further showcase to travellers the friendly hospitality of the Mozambican people.”

Other trends to expect on the continent

The Euromonitor International report further stipulated that Africa will show the highest growth in disposable income globally over the period to 2030, at 9% CAGR.

The report identifies five key trends for the continent, which are summarised here: ‚

  • African population growth, increased urbanisation and expenditure presents opportunities Africa is the world’s second most populous continent. Its growing young population is expected to command nearly 20% of the world’s population by 2025. Equally, rapid urbanisation and fast-growing consumer expenditure provide long-term opportunities.
  • Consumers are diverse and a “one size fits all” approach will not work Africa’s 55 independent states are home to a diverse population of different income groups, religions, races, customs and languages. This diversity requires a more granular and regional approach for a successful and sustained market entry.
  • A flexible long-term strategy is required to succeed in the continent: despite signs of growing GDP and consumer expenditure, the challenges of the continent, such as lack of infrastructure, paucity of skills and political instability, require a flexible and long-term approach.
  • Africans are increasingly connected, with high mobile penetration – reaching one billion in 2017. By 2030, Africa will have 16% of the world’s internet users, which reflects growth of over 260% from 2017. This offers opportunities in various consumer industries, which include finance, apparel, food and drink, and beauty and personal care.
  • Modernisation of retail alongside informal retailing: Modern retail outlets are increasing at a rapid pace. However, a large proportion of retailing still takes place in traditional stores, open-air markets, street kiosks and even at the side of the road. Understanding how these markets operate and why consumers choose these channels is important.