JOHANNESBURG: Financial services brands in categories such as retail banking and insurance are enhancing their African operations, reflecting the significant opportunities promised by the region.
Purchasing power levels stand at approximately $1.9tr across Africa, a figure which is expected to rise as key regional economies expand, offering significant opportunities for providers.
"I think the increasing wealth and affluence and consumption that people have is driving different behaviours. People can afford more, and they can save more," Nicholas Young, COO for Citibank Africa, said, as reported by How We Made It In Africa.
Young also suggested the substantial variations in performance observable between the continent's 50-plus nations meant that a highly nuanced strategy was required on the part of brand owners.
"There are a few economic groupings that are easier to do business in or make more economic sense and people can target those," he said. "However, the reality is that one needs to almost have a tailored approach for each market and each country."
Elsewhere, Absa, a local bank in which Barclays holds a majority share, has outlined ambitious plans for organic growth. It currently trades in countries like Botswana, Mozambique and Zambia, and is considering entering Angola and Nigeria.
"I think it is a great opportunity to take what we have done to integrate the Absa and Barclays Africa businesses and grow the business further," said Maria Ramos, the CEO of both firms. "All options are open."
Munich Re, the insurance group, believes that similar trends are developing in its sector. Junior Ngulube, chief executive of the German corporation's local arm, was thus optimistic about its future prospects.
"That's a growing market for us as insurance companies, and insurance penetration in this market is increasing as a result," he said." We see people coming into the financial services market. They are buying assets, they are buying their first homes and first cars ... and they need to protect those assets."
Actis, the specialist private equity firm focusing on emerging markets, is also targeting Africa, according to David Cooke, a director at the organisation.
"As our economies in Africa have grown there's an increasing demand for the sophistication of financial services products," he said. "The rise of debit cards [and] credit cards, is just tremendous."
"Invariably, given the size of the economies in Nigeria, in South Africa, and, for us, in Egypt ... that is where a lot of our time and effort goes into looking for new opportunities," he said. "But I think what is happening is quite interesting in terms of those exciting businesses [that] are now starting to take a much more regional view."
Data sourced from How We Made It In Africa; additional content by Warc staff