The Economist
The article is from the economic magazine The Economist posted on Aug 23rd 2014. As I began to read about the article, I thought about all the misconceptions of the actual size of African continent that we have learned at class on Tuesday. Many people still believe that African continent is smaller than Asia and the United States while it is not. This article is about the huge capability of African continent, especially in Nigeria, the continent’s largest market. Even though the success of beginning business in the continent would never be easy, people cannot easily ignore the fact that African continent has its huge capability to be invested. Especially in Nigeria, its promise has made a test-bed for the Africa strategies of consumer goods firms and this is not just because of its size but because of Nigerian culture that has been traded nearly for a century.
Following to the graph attached, Africa’s engine of growth, especially for Nigeria, it is much higher compared to that of the United States. Naturally, the percentage of change on a year for Africa is also greater than that of the rest of the world. These graphs are significantly saying that the future investment toward the new business opportunity will possibly be concentrated on Africa with the continent’s shortcomings following to Nigeria.
On the other hand, there are many problems that are not solved currently in the continent with new opportunities. A shortage of electricity is one of the worst problems. Nigeria has one of the world’s highest rates of road deaths and the government only recently made lessons and tests mandatory for new drivers not the existing drivers that had brought out many casualties. Back to the shortage of electricity and the other resources, these inefficient supply chains inevitably increase the cost of doing business and another problem about getting goods to customers are not adjusted fully in the current market. The high cost of construction and land disputes have disrupted that growth of formal retailing that made the fragmented market difficult to forecast sales. Therefore, it is more obvious to increase the cost of doing business due to the dispersed customers with inefficient supply chains.
Few months ago, I have read about the article saying that the biggest dam would be established in Africa that the cost to build a dam would be approximately $4.2 billion USD. One thing that consistently comes to mind is that many investors already know and recognize that African continent is full of things that are not discovered and invested at this moment and that the area has great growth potential. The article keeps mentioning about the inefficient capital and sources with the potentials following to the revenues that will grow faster than GDP. One thing I liked about this article was that the perspective of writing this article seemed to be very objective and not subjective by misconceptions and the certain stereotypes about Africa. The article was full of the potentials that African continent would possibly have only if there are abundant sources supported by the market. The tone was neutral by mentioning both possibilities with investing opportunities found in Africa and the limits with current problems that Africa is facing. I thought about the image and general facts that are facing toward African continent. Usually, people think about the scarcity of water in the African continent and when it comes to the people from rest of the world, it is easier to have more prejudice and uneasiness toward Africa even before knowing about its culture and people. After having read this entire article, I thought about Africa’s huge potentials that can be overtaken by business investment. It is also the best testing ground for new ventures since Africa continent is huge and is full of opportunities that are not found yet.