NAIROBI, Kenya, Apr 4 – The International Finance Corporation projects Sub-Saharan Africa economy will surpass the $ 2 trillion in the next two years.
In a new report, IFC says despite the recent economic drag, Africa is a rapidly expanding market as Sub-Saharan Africa economy quintupled over the last two decades, from $300 billion in 2000 to $1.6 trillion in 2017
This rapid growth has been driven by Africa’s services sector, which represents a tremendous economic opportunity as it contributes more than half the region’s output growing at an average 6.6 percent over the last decade as the middle class in the region continues to expand.
According to the report, by 2030, Africa’s middle- and high-income groups are expected to grow by 100 million, boosting them to over 160 million people across the region.
These consumers will spend smaller portions of their income on basic necessities such as food and beverages and more on transportation, ICT, housing, education, clothing and footwear, pharmaceuticals, and other products and services.
“Household spending in Africa is projected to grow at an average rate of 5 percent, surpassing the 3.8 percent average growth among other developing countries. The robustness of Africa’s consumption growth potential is present across all sectors. While consumption growth in Africa is expected to exceed 6 percent in most sectors, spending on transportation and information and communication technologies (ICT) is expected to grow faster than spending on other sectors,” the report indicates.
Expenditures on food and beverages—the largest share of total spending for African households—should continue to grow much slower, but will remain the most important component of total household spending, – the report states.