Africa’s booming cities are a huge opportunity for UK firms

Africa’s most populous and thriving cities pose huge opportunities for UK investors, with demographic growth that could triple the size of their economies in just a decade and a half, according to research released today.

Although many European firms have accessed markets in Lagos, Kinshasa and Johannesburg, Africa’s three biggest cities, they are missing out on the next 10 largest, according to a report released today by PwC.

The number of people in Dar es Salaam, in Tanzania, and Luanda in Angola, will rise to more than 10m apiece by 2030, according to United Nations projections.

In total, the 10 metropolises are expected to nearly double in size, with young and rapidly growing populations.

PwC economists believe their GDP could triple in the same period, hitting $140bn (£83.10bn) in 16 years’ time.

“There is an educated investor base in London that understands the opportunity that Africa presents and is prepared to invest in scale in the region, across a wide range of sectors,” said Simon Raggett, chief executive of Stand Hanson, a British merchant bank with a major presence in Africa.

The bank has advised on major African flotations, and thinks there is significant room to grow further.

“This trend will continue, particularly as Africa seeks to build the infrastructure to support its growing economic aspirations and demographics,” added Raggett.

The report notes that there are major challenges standing in the way of economic growth. PwC identify low-quality physical infrastructure such as roads, as well as inadequate educational and political institutions as potential speed bumps for the continent.