Other African cities on the come up include Addis Ababa in
Ethiopia, Dar es Salaam in Tanzania, Kinshasa in Congo and Mombasa in Kenya.
Some of the world’s largest companies have already made
inroads into these economies. Diaego, one of the world’s largest brewing
companies, paid $225m for Ethiopia’s state-owned brewer Meta Abo last year, to
tap into Addis Ababa’s growing consumer market. What’s more, the African Union
is headquartered in the city, making it the political capital of Africa,
Frontier says. That’s a bit of a stretch, but the business buzz in Addis is
undeniable.
Fellow beer group Heineken is spending $325m in Kinshasa,
Congo’s capital. Frontier says: “while poverty and an underdeveloped
infrastructure reduce market size in Kinshasa, staggering population growth and
consistently high economic growth means the city of 10 million cannot remain
ignored by many MNCs.”
Dar es Salaam, Tanzania’s largest city, arguably offers the
best investment prospects of all. Taking into account its size, short-term
stability and growth, Frontier ranks it as the third best risk-weighted
business opportunity in all of Africa by 2015.
An emerging trade hub in east Africa, it is increasingly
handling more cargo than Mombasa, the region’s other sea trade centre. And
Japanese carmaker Honda Motor has recently shown an interest, teaming up with a
Tanzanian company and preparing to build an assembly plant to expand sales in
the city.
There are risks to expanding in all of these markets, of
course – Frontier highlights the usual concerns about infrastructure,
corruption, and regulation. But Africa is the fastest growing and most rapidly
urbanising region in the world. The risks of staying out could be greater
still.
The article also forecasts that the economy of Lagos, which
is listed as one of the “Big 5”, will by 2015, outweigh that of it’s nearest
competitor, Johannesburg, which has the biggest economy in Africa. Johannesburg
has a nominal GDP output of $51billion, while Lagos has a GDP of $40billion but
that of Lagos is predicted to jump when Nigeria rebases its economic statistics
next year.
The Big 5′ - cities are said to be broadly politically and
economically-stable, and already major FDI destinations. They are: Accra,
Ghana; Johannesburg, South Africa; Lagos, Nigeria; Luanda, Angola; and Nairobi,
Kenya.
It would seem fate has quite the sense of humour, with this
article declaring Lagos as “economically-stable” just as the state has been
declared insolvent by the Revenue Commision.