Africa is well known for its wealth of natural resources, which includes oil and gas, a variety of metals and minerals as well as huge tracts of agricultural land. These riches have attracted global investors, most notably from emerging market countries such as China, India and Brazil. Many of these investors have been seeking raw materials for their own economic development and markets for their industries.
More than a billion strong and with a median age of just twenty, the population of Africa is now viewd as a burgeoning market in itelf. Consumer spending in Africa rose at a faster pace than India and Brazil in the past decade as surging commodity prices, debt relief and a move to freer economies helped to boost economic growth. Household spending is set to expand 63 percent to $1.4 trillion in Africa by 2020, home to the world’s youngest and fastest-growing population, according to a 2010 report by McKinsey & Co.
Teddy Muthusi goes to Kentucky Fried Chicken in Kenya’s capital, Nairobi, for more than just fried food: it’s a status symbol. Muthusi gladly spends 1,870 shillings ($22), a quarter of the national monthly minimum wage, to treat his girlfriend at the country’s first U.S.-based fast-food company’s outlet that opened in August. He can afford what many can’t. About 45 percent of Kenya’s population live on less than $1.25 a day, according to the World Bank. “I’m willing to fork out more because it’s cool, it’s trendy, it’s a great place to be seen, and the food is good,” Muthusi, a 36-year-old creative manager at Easy FM radio station said in an interview , raising his voice above the pop music blaring through speakers. “Kenyans have that feeling if you can eat at KFC, you’ve made it. You want to be part of that KFC conversation with friends, on Facebook, in the office,” he said.
About 200 million to 300 million people in Africa earn $730 to $3,650 a year, according to Shantayanan Devarajan, chief economist for Africa at the Washington-based World Bank. “That’s a healthy market for consumer-goods producers,”
According to Devarajan, the potential for growth in consumer spending is greatest in Ghana, where an oil boom fueled economic growth of 14.4 percent in 2011. Nigeria, Africa’s most- populous nation of more than 160 million people and Kenya, East Africa’s largest economy that expanded an average 5.6 percent a year since 2007, will probably also see an increase in retail demand. Sub- Saharan Africa’s economy will expand 5.4 percent this year, the fastest-growing region after developing Asian nations, the International Monetary Fund said