Conrad Onyango, bird story agency

Zimbabwe is pushing past sky-high inflation, global sanctions and illicit trade to find itself the unlikely winner in a consumer index that measures Africa’s emerging consumer market.

Efforts by the government to offer "essential consumer spending solutions through credit and digital advancements" - including the recent launch of Zim-gold, a new “structured currency” backed by gold - are helping to lower inflation, bolstering consumer spending power and the market’s attractiveness.

The Stears Consumer Intelligence Report 2024 highlights Zimbabwe’s willingness to attract capital and bolster government efforts to revitalise the economy and push the country into Africa’s emerging consumer class.

“The Zimbabwean government’s unconventional move to back the country’s currency to gold has attracted optimistic investors and market sentiments that may bear good fruits in the medium term for Zimbabwe’s consumer class,” the report, which assesses consumer market potential, reads.

“Though it will take time for consumer spending and the nature of the consumer class in Zimbabwe to match its Southern African neighbours, there is light at the end of the tunnel should the country continue this path,” said the authors of the report.

Over the last five years, the report noted, Zimbabwe’s triple-digit inflation has dropped significantly from as high as 255% in 2019, to a low of 48% as of February 2024.

Easing inflation boosted the country's Human Development Index, helping it rank as one of the top 15 counties in Africa in 2023. 

Zimbabwe tops the list of the category of emerging consumer markets in the region, followed by Gambia and Lesotho.

Elsewhere, Tanzania is viewed as a strong contender to enter the "developing" category in the near future.

The report cites the recent advancement of Tanzania from low-income to a low-middle-income country and increased efforts by the government to make it an investment hub as key drivers for growth. 

“Additionally, other consumer market equipping indicators, like adequate electricity access and a latent appetite for digital credit solutions, position Tanzania as a consumer market investors should watch out for,” explained the report.

While Mozambique, Malawi, and Madagascar, with an average GDP per capita (PPP) of over US$1,400, are also rising emerging consumer markets, Tanzania is ahead with almost twice as high GDP per capita (PPP) at US$2,624. 

Mozambique’s strategic location - borders strong advanced consumer markets like South Africa and Eswatini and budding markets like Tanzania - favourably ranks ahead of larger West African markets like Cote d’Ivoire on the index. 

The report ranks South Africa, Botswana, Cabo Verde, Eswatini, Namibia and Kenya as the most advanced consumer markets in Sub-Saharan Africa respectively.

South Africa, Botswana, Namibia, and Eswatini are classified as advanced consumer markets because they exceed the Sub-Saharan African average GDP per capita (in Purchasing Power Parity terms) by four times. 

Kenya’s appreciating currency - among the best performing in the world this year - has bolstered that country’s economic fundamentals to push it into the advanced consumer market category.

In North Africa, Egypt is the largest consumer market with an expenditure of US$296 billion followed by Morocco (US$63 billion) and Algeria (US$61 billion) according to data published by Statista in August 2023.

Africa has one of the world’s fastest-growing consumer markets, projected to boast 1.7 billion consumers by 2030 and bolstered by the opening of the US$3 trillion Africa Continental Free Trade Area - the world's largest single market. 

According to The Knight Frank Wealth Report, Africa will this year experience the third highest growth in the number of ‘ultra-high net worth’ individuals with assets exceeding US$30 million, after North America (7.2%) and the Middle East  (6.2%). 

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Useful links: https://www.stears.co/article/special-report-assessing-consumer-market-potential-in-sub-saharan-africa/