South Africa and Nigeria offered the best opportunities for foreign companies, in terms of unmet demand, the absence of major barriers to cross-border trade and their connectivity with other African countries, according to analysis by Barclays published on Thursday (see table).
While South Africa is the “standout performer”, Barclays said Nigeria arguably represented the “most exciting” long-term opportunity.
However it added that the country suffered from “logistical difficulties posed by inadequate infrastructure,” which meant many companies had to provide their own power and water supplies.
The bank, which has operated in Africa for more than 150 years and has 1,500 branches across the continent, said Nigeria, needed to reduce non-tariff barriers to trade, as well as invest heavily in transport networks and power provision.
The report, which was compiled as an aid for UK exporters but has wider ramifications, also pointed to the degree to which Europe has been usurped by the rise of Asia, which accounted for 19 per cent of sub-Saharan Africa’s goods imports in 2004 but 32 per cent by 2013.
Barclays saw some of the best opportunities in the retail sector, with the development of more formal shops, malls and supermarkets allowing customers to “trade up”, and expanding mobile and internet services creating new avenues for online retailers.