13 November 2012

Uganda Ranks Eighth Among African Nations With High Consumption Growth Potential

A recent report by Rand Merchant Bank (RMB), a South African investment bank has ranked Uganda eighth among the best ten African nations with high consumption potential.

The report entitled, "Where to Invest in Africa," says when consumer-facing multinational companies such as super market chains and mobile phone operators are looking at factors when deciding where their goods should go, they should consider population size, forecast population growth rates, forecast per capita GDP rates as well as urbanization growth rates.

By combining these variables into a single measure, RMB has created a ranking index of the countries with the best outlook for consumer goods.

The index has Nigeria at the top, followed by Ethiopia, the DR Congo, Kenya, Tanzania. The list is completed by Egypt, Sudan, Uganda, Burkina Faso and Mozambique.

However, the report notes that although Africa is an important market for consumer goods from a macro-economic perspective, companies need to remember that each country is different.

"Ethiopia, for instance has a large population and a decent market size, but it would probably not offer a concentration of high-income earners for high-end retailers," says the report.

RMB says there are many other aspects to consider when assessing where the most attractive consumer environment are in Africa.

RMB named these to include strong local partners, good local management teams, alternative distribution methods, competition, population densities, infrastructure, acquisition opportunities, market saturation and branding.

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