Africa’s economy is growing at a rapid pace. In 2011-12, the continent is expected to grow faster than any other region or country in the world, apart from China and India.- and increasingly, this is becoming more than just a commodity story. Africa has peaked the interest of companies looking to expand their businesses, but the question now is where to invest? Africa is a huge continent with many diverse nations. To help answer this question, the EIU has developed an Africa Cities tool, which compares key indicators across 25 of the fastest growing cities in Africa. These key indicators include population and demographics, income and expenditure, business demographics and lifestyle indicators, and cost of living. Executives can now size out the market for their products today and for the future based on these essential city data points. Download the summary to find out about Africa's fastest growing cities and what it means for the global economy.

1. Africa cities rising
Forecasting data and analysis from the EIU
September 18th 2012
© Economist Intelligence Unit
Contact us to learn more about how we can
help your company plan your Africa strategy:
AfricaCities@ eiu.com

2. Africa’s economy is growing fast
Real GDP growth
(2012-2016 forecast)
Above 10%
7.5% to 10%
5% to 7.5%
2.5% to 5%
Below 2.5%
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3. By 2012, 8 of the world’s 20 fastest growing economies
will be African
GDP growth
12
10
8
6 2011
2012
4 2013
2
0
Western US Brazil Russia Sub-Saharan India China Sub-Saharan
Europe Africa Africa ex
South Africa
-2
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4. Africa’s growth story has always revolved around commodities
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5. But Africa’s growth story is now more diverse
The ‘peace dividend’ – After years of armed conflict and military
rule, democracy is the latest wind of change sweeping across the continent
Urbanisation - Half of all Africans are under 20, and are rapidly
moving to cities: more than 40% of Africans now live in urban areas
Improved governance – Greater accountability comes hand-in-
hand with democracy and the slow strengthening of institutions
Trade, not aid – Europe is still Africa’s largest trading partner, but
China’s share of trade has exploded in the last decade
The rise of technology – The number of mobile subscribers in
Africa exceeded the 0.5 billion mark in 2010, allowing companies greater access
to consumers
Infrastructure investment – Chinese companies are building
roads and upgrading railways, ports and airports
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6. Even though challenges for companies remain
• Katherine Changes in Transparency
International’s corruption
rankings for African countries
since 2005
25
23
Inefficient border posts Inadequate railway networks
Poor roads – and not enough of them Bribery &
either corruption
Poor skill base Congested ports
Uninviting airports
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7. Companies are showing more interest than ever in expanding
into Africa
A recent survey conducted by The Economist Group of 217 global companies based in 45 countries
revealed that expansion in Africa is a priority for two thirds of them within the next decade
Does your company operate in … Plans to expand in the next 3 to 5 years…
South Africa Elsewhere in Sub-Saharan Africa South Africa Elsewhere in Africa
56% 140%
54% 120%
52% 100%
50% 80%
48% 60%
46% 40%
44% 20%
42% 0%
Yes No Existing Planned
* Economist Corporate Network survey, 2012
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8. Companies need Africa city-level data and analysis
Companies looking to expand into Africa want to concentrate their strategy where growth and
demographics are most favourable – in major cities.
It is not enough to plan a strategy around nationally forecasted growth, but rather to have critical
forecasting and business information on a particular city.
In response to increasing inquiries from companies to understand African growth, the EIU has
developed a tool to forecast key demographics and indicators for 25 of the fastest growing and most
important cities.
Consumption
in Africa is
much greater
in urban than
rural areas
Source: World Bank
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9. Why these African cities?
Algiers Tunis
Alexandria
Casablanca Tripoli Based on key economic drivers,
Cairo
client feedback and a survey of
Corporate Network members, the
Khartoum
Dakar
EIU identified 25 African cities
Kumasi Abuja
Addis (across 19 countries) that are of
Ababa
Douala particular interest.
Kampala
Abidjan Accra Lagos Nairobi
Mombasa These cities represent some of the
Dar es Salaam
Luanda
best opportunities for growth, but
Lusaka up until now data has been lacking
to support the case, and strategy,
Jo’burg for market entry.
Maputo
Durban
Cape Town
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10. Introducing the EIU’s Africa Cities tool for city-level analysis
2. View an in-depth profile of a city
1. Compare indicators across all 25 cities
3. Compare two cities head-to-head
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11. The Africa Cities tool indicators
Business
Population and Income and Cost of living index
demographics &
demographics expenditure
lifestyle indicators
• Total population • Total expenditure per annum • Internet users % • Customised cost of living index
• Number of households • Expenditure per capita • Mobile phone subscriptions for the 25 cities, comparing the
• Total male/female population costs of:
• Expenditure per household • Number of salaried employees
• Population aged 0-4 • Food and non-alcoholic
• Expenditure by category • Number of businesses
• Population aged 5-9 () beverages
• Median income • Number of businesses with
• Population aged 10-14 • Alcoholic beverages and
• %/Number/Total income/of turnover: 0 - 25m LCU
tobacco
• Total population aged 15-19 people earning >$2,000 pa • Number of businesses with • Clothing and footwear
• Total population aged 20-24 • %/Number/Total income of turnover: $10 - 50m
• Housing, water, electricity, gas
• Total population aged 25-29 people earning >$5,000 pa • Number of businesses with and other fuels
• Total population aged 30-34 • %/Number/Total income of turnover: $50 - 100m
• Furnishings, household
• Total population aged 35-39 people earning >$10,000 pa • Number of businesses with equipment and maintenance
• Total population aged 40-44 • %/Number/Total income of turnover: $100 - 250m
• Health
• Total population aged 45-49 people earning >$15,000 pa • Number of businesses with
turnover: $250 - 500m • Transport
• Total population aged 50-54 • %/Number/Total income of
people earning >$20,000 pa • Number of businesses with • Communication
• Total population aged 55-59 turnover >$500m • Recreation and Culture
• %/Number/Total income of
• Total population aged 60-64 people earning >$30,000 pa • Number of businesses with 0 - • Educations
• Total population aged 65-69 • %/Number/Total income of 19 employees • Restaurants and Hotels
• Total population aged 70-74 people earning >$40,000 pa • Number of businesses with 20 - • Miscellaneous goods and
• Total population aged 75-79 99 employees services
• Total population aged 80 • Number of businesses with 100
- 499 employees
• Number of businesses with 500
- 999 employees
• Number of businesses with
1,000 - 4,999 employees
• Number of businesses with >
5,000 employees
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12. Our methodology
The Team Data gathering and estimation Collation and front-end design
Interviews with local
EIU project managers,
statistical bodies as well as
analysts & an on-the-
data collection from
ground network of African
household and labour force
contributors
surveys
EIU Worldwide Cost
Construction of a cost of
of Living team Cost of
EIU Worldwide living index for the 25 African
Living team cities
Design of an interactive
Excel workbook with a
graphical interface that
allows quick comparison of
Estimation and econometric cities.
EIU Economics Unit
modelling of unavailable data
EIU Africa analysts Sense-check of final data
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13. Key results – Cities paint a much different picture than nations
• Per-capita expenditure was higher in each of the 25 • Africa is urbanizing fast and cities are attracting
cities, than in their respective nations. more and more migrants.
• Citizens in cities spent 94.4% more, per capita, than • As a result we are witnessing the emergence of
their countrymen as a whole. “super cities”- each bringing considerable
opportunities.
• The demographic profile of these cities can be
much different than the national level picture.
Per capita city-level expenditure v national-level expenditure Demographic profile of Lagos v Nigeria
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14. Key results – Demographics are favourable
• While Africa as a whole has
favourable demographics, the
Africa cities we measured had
notable differences between
them:
• Cities like Nairobi, Addis
Ababa and Mombasa
have a glut of their
population in the key 20-
35 age demographic.
• The largest growth in
population from 2012-
2025 will come from
Kampala, Dar es Salaam,
and Lusaka
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15. Key results – Expenditure is growing
Expenditure per capita differs markedly across cities, depending on the product in question.
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16. Key results - Cost of living differs between cities
Cities like Luanda feature considerable inequality and official prices are extremely expensive.
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17. What are companies doing with Africa Cities data?
Forecasting sales of their products and services
in African cities
Benchmarking African cities to find the best
opportunities for their products and services
Forecasting demand for their products and
services
Determining wages for staff in various African
cities
Finding new market opportunities among African
consumers
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18. Want to learn more about the EIU’s Africa Cities data and
analysis?
Contact us to learn more about the tools and analysis we
have that can help your company plan your Africa
strategy:
AfricaCities@eiu.com
London: +44 (0)20 7576 8181
New York: +1 212 698 9717
Hong Kong: +852 2585 3888
About the Economist Intelligence Unit:
The Economist Intelligence Unit’s forecasting and analysis has informed government and
industry around the world since 1946, when we were founded as the research arm of The
Economist.
Like The Economist we are independent of all governing bodies and corporations.
For the last 65 years we have provided focused business insight on any given industry,
country and market to help clients take advantage of new opportunities, maximise capabilities
and support both tactical and strategic decision making.
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