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Africa: The next gold rush?

  • Africa is witnessing geo political changes never before experienced by the continent in history. And it is not only the countries in Northern Africa, like Tunisia, Libya and Egypt, that are witnessing the type of change thought impossible even a couple of years ago. Countries ranging from Sierra Leone to Nigeria and Zimbabwe to the newly carved out South Sudan are undergoing rapid change. Many countries on this continent are witnessing or are experimenting with peace for first time in decades. And totalitarian states are giving way to representative governments.

     

    The continent has always commanded attention from the world for a range of natural resources it can provide, a sort of raw-material supplier to the world. But perhaps for the first time in history, Africa is turning into a consumer demanding goods and services. It is a huge potential market of over a billion people, with latent demand that is expected to show over the coming years.

     

    The most urgent demand is in infrastructure. After decades of neglect and destruction, almost everything has to be built from scratch. Demand arises not only for civil infrastructure in transportation, energy and telecommunications, but also for industrial and mining development. Specifically, opportunities exist in building roads, rail lines, airports, ports, power plants and power distribution infrastructure. Banking facilities are required to manage the new wealth being generated. And a young and vibrant population gives rise to demand for international clothing brands, latest gizmos and fast food. Several African cities are already witnessing very high growth in modern retail.

     

    Companies from India are uniquely positioned to benefit from this huge market due to India’s traditional ties with Africa, a sizeable Indian-origin population on the continent, and in general a positive perception of India among the people of Africa (as opposed to say China, which many Africans perceive as acting like a colonial power that takes away minerals and resources without sharing its benefits). While Indian multinationals (like Tata) have been active in various countries in Africa for many years now, the time has come when even small and medium sized Indian companies, across the sector spectrum, can grow and benefit by operating on the continent that gave birth to the human race.


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