African consumers spend US$600-bn/year, an enormous opportunity for SMEs

African consumers spend US$600-bn/year, an enormous opportunity for SMEs

African consumers spend US$600-billion annually, official statistics say. This, coupled with the 6% economy growth of sub-Saharan Africa in 2014 and a fastest growing middle class in the world, should constitute boundless opportunities this year for the continent’s small and medium enterprises (SMEs), DHL Express sub-Saharan Africa managing director Charles Brewer said.

Brewer singled out manufacturing, which he said was on a large scale still embryonic in Africa.

As such, there is a definite opportunity for SMEs to fill the gaps which are not being serviced by large global manufacturing companies, he said.

“As important, a growing SME base will create hundreds and thousands of new jobs, which is an absolute must for this ever growing continent.”

However, the eternal challenges facing the SME sector in Africa came once again to the fore.

Brewer fingered out usual challenges such as infrastructure, customs regulations and controls, and access to finance as main obstacles likely to hamper SMEs.

Despite these obstacles, he nonetheless demonstrated some sort of Afro-optimism, as if saying that everything will be fine.

He explained: “The Institute of International Finance reported that due to many countries in sub-Saharan Africa struggling with controlling price pressures, central banks have tended to keep monetary policy fairly tight.

“Despite this challenge, we expect SMEs to create growth opportunities through increased consumer spending power and expansion into untapped markets.”

He also said that Africa’s growing internet user penetration provided a sizeable opportunity for SMEs, as e-commerce as a way of life continues to grow and help businesses to leverage this online market, and reduce their traditional customer acquisition costs.

Lastly, he urged SMEs to tap into global opportunities, saying that the more they look into global expansion, the better the chances for growth become.

“When it comes to global opportunities the key to success for many SMEs is knowledge. Knowing which markets to target, how to market their product, how to identify customers, how to get paid and critically, how to ship globally,” he said.

DHL, the world’s largest logistics company, is said to be working with 25 000 SMEs across Africa.

Photo. World Bank

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