Africa’s economic potential is unparalleled, with much of the continent’s most promising industries offering significant growth opportunities. From the energy sector to infrastructure to agriculture to commerce, Africa is well positioned to drive long-term and sustainable growth on the back of industry revitalization. In 2023, several economic sectors are set to witness unprecedented growth, with research firm, Economist Intelligence, emphasizing that almost every African economy will continue to grow, driven by increased competition among global markets for African resources.
Natural and Mineral Resources
Driven by higher prices, heightened global demand, increased foreign investment and long-term development plans, Africa’s natural and mineral resource sector will remain one of the continent’s fastest growing markets in 2023. Across the natural resource industry, a slate of large-scale projects expected to come online throughout the year as well as a suite of licensing rounds, project launches and deals are set to significantly increase foreign direct investment (FDI) flows into the continent.
Noteworthy projects include Senegal and Mauritania’s Greater Tortue Ahmeyim facility; Senegal’s Sangomar Field Development; Ghana’s deepwater Tano Cape Three Points; and Nigeria’s Bonga North Deepwater Project while upcoming licensing rounds in Kenya, Angola, Equatorial Guinea, Uganda, the Democratic Republic of the Congo (DRC) and more are set to reawaken new opportunities for market expansion and investment. Additionally, Namibia is expected to double its GDP by 2040 with its two large-scale hydrocarbon discoveries, Ethiopia expects FDI to increase significantly from its 79% increase in 2021 while the African Continental Free Trade Agreement is expected to simplify intra-African trade, leading to heightened FDI flows across the entire continent.
At the same time, Africa’s mineral markets are set to witness unprecedented growth in 2023 due to increases in global demand, energy transition-related trends and improved trade networks. Rich in an abundance of mineral resources – Africa is home to approximately 30% of the world’s mineral resources, according to the United Nations -, Africa has become the destination of choice for clean energy investors and mining companies alike, and as such, FDI flows are anticipated to dramatically increase.
The Automotive Industry
The light manufacturing and automotive industry is projected to be one of Africa’s top sectors to record significant growth in 2023, driven by factors including sustained domestic demand for vehicles and regional trade, improvements in foreign investment and global value chain integration as well as the implementation of major supporting policies.
As Africa focuses on industrialization and job creation, an increasing number of multinational vehicle manufacturers have identified the continent as a growth opportunity and are setting up production plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria, Rwanda and South Africa. What’s more, with global policies being directed at climate mitigation, firms such as Volvo, Audi, BMW, Mercedes Benz, Toyota and Volkswagen have launched project developments in South Africa, Rwanda and Morocco to capitalize on the supportive business environments, policies as well as market trends.
The Construction Market
Africa’s construction industry is expected to expand significantly in 2023 owing largely to multi-sector developments. These developments include the expansion and construction of oil and gas pipelines and transportation infrastructure as part of efforts undertaken by African countries to maximize energy trade across the continent and with international markets. In this regard, investments and activities in large-scale pipeline projects such as the Central African Pipeline System, Nigeria-Morocco Gas Pipeline, Trans-Saharan Gas Pipeline and the East African Crude Oil Pipeline are expected to drive economic growth and job creation across various African economies.
Additionally, investment in electrification will also positively impact the industry as energy providers seek to expand grid networks and modernize generation systems to secure energy supply and meet national electrification targets. As more investment flows into a variety of economic sectors including energy, agriculture, transportation and manufacturing, the continent’s construction market is set to expand significantly.
