From Juba to Nairobi – how companies are making money on the new frontier

The raw numbers are compelling. In 2011, sub-Saharan Africa’s total population was estimated to be around 900 million people. Including the Maghreb puts the continent at more than 1 billion human beings, who, despite the prevailing belief in the West, are not trapped in a developmental stasis. That population is growing at a greater rate than any other region, and is forecast to reach 2 billion by 2050 – which has its concomitant risks and challenges – but also creates massive opportunities as those populations are moved from rural subsistence to urban consumption, a shift which is happening at a startling pace. In 2010, the United Nations’ Human Settlement Programme – UN Habitat – forecasted that by 2030, more than half of all Africans will live in cities, from around 40% in 2009. By the early 2040s, there will be more than 1 billion people living in the continent’s cities.

Today, these cities show the dichotomy of Africa’s growth. In Nigeria‘s commercial capital of Lagos, a sprawling conurbation draped across an estuary in the country’s south, artisanal charcoal burners sit cheek-by-jowl with the brand new Porsche dealership on Victoria Island, which boasts some of the world’s most expensive real estate. In Abidjan, Côte d’Ivoire, men and women compete with the white cranes to pick through the city’s detritus in the shadow of neon signs advertising Samsung televisions.

On the other side of the continent, in the heart of Kenya‘s capital, Nairobi, a stone’s throw from where sleek concrete and glass towers are rising to house the region’s new technology champions, the Kibera slum stretches on for miles, a corrugated iron and wood city-within-a-city with its own shops and bars, its own public transport and Pamoja FM, its own radio station, serving a population of several hundred thousand. On the edge of the sprawl new housing projects are stretching up out of the ground. The slow march of formalisation has seen sanitation and permanent structures eat into the slum, and while it remains an ugly scar for the television cameras and the swarms of gap year missionaries that flock to Nairobi every year, even Kibera is rising. It is that rise, from the base of the pyramid up towards its peak, that is Africa’s great potential.

It is something remarked on, but often dismissed, that almost anywhere in these cities, a visitor can buy a Coca Cola and watch English Premier League or Spanish Primera Liga football. The stores stock instant coffee and milk powder made by Nestlé, Unilever tea and hygiene products. Tusker, Kenya’s iconic beer, whose logo is worn as a souvenir on the chests of those same gap year students, is bottled in Nairobi by East African Breweries Limited, a subsidiary of the drinks giant Diageo. Lined up in glass cases in garishly painted stalls dotted around the city, merchants are doing a roaring trade in Nokia and HTC mobile phones. Africa’s urban population already buys branded necessities and small luxuries in huge and growing quantities. However, the turnover of goods, the increasing formalisation of these micro-economies, the construction of infrastructure and the inflow of international capital is also creating something new and powerful.

In the central business district, snarled as ever with traffic, urban professionals sip lattes at Java House, the country’s equivalent of Starbucks. They are not the wealthy elite, nor are they the struggling poor. They are aspirational, consumptive, creative and entrepreneurial. They are the new face of Africa’s cities, and the engine of the continent’s emergence. They are Africa’s middle class.

This article is an edited extract from Peter Guest’s book, Africa’s Century: Making Money On The New Frontier (Endeavour Press, August 2012). Available at Amazon.