Tag: Trade and Investment in Africa

  • 4th February, 2024
  • 4 min reading


On Sunday, January 28, 2024, the military governments of Burkina Faso, Mali, and Niger jointly announced their exit from the Economic Community of West African States (ECOWAS) with immediate effect. The planned exit will see the number of countries that make up the West African Economic Bloc shrink to 12. 

Widely seen as West Africa’s top political and regional authority, the 15-nation bloc of ECOWAS was formed in 1975 to “promote economic integration” in member states. However, in recent years, the organisation has struggled to reverse rampant coups in the region, with citizens complaining of not benefiting from the abundant natural resources in the region. 

In the joint communiqué, the three Sahel countries said the bloc has not offered significant support to their countries’ fight against insurgency and terrorism, which has led to the loss of lives and rendered millions of their citizens homeless. 

There has been widespread concern about the political and economic implications of the countries’ planned exit on the region’s fragile peace and development. The potential impact of the exit spans various sectors reliant on regional trade, supply chains, and international business within the region. 

In addition to being founding members of the 49-year-old West African organisation,  the three countries are also part of the Sahel region of Africa, which is adjudged to be potentially one of the richest regions in the world due to its abundant human, cultural, and natural resources, as well as its youthful population, yet among the poorest in the world. 

How easy can the exit be for the Sahel trio? 

Article 91 of the ECOWAS Treaty of 1975 requires “Member States wishing to withdraw from the community to give the Executive Secretary one year’s written notice.” While the immediate withdrawal as announced by the joint military government may not be feasible as a result of the countries being signatories to the ECOWAS Treaties, if the exit happens, beyond the political implications, this may have an impact on the future of trade in the region and the continent. 

In a recent discussion with leading pan-African news outlets CNBC Africa and Channels Television, ETK Managing Director Bolaji Sofoluwe provided expert insights on the potential trade disruptions and supply chain complexities resulting from this exit and the broader implications. 

Key Insights from Bolaji’s Discussions:

  • There is a need for clarity on what the three countries are withdrawing from, as there are numerous infrastructures that bind ECOWAS together as a regional bloc.
  • The decision to exit ECOWAS by the three countries should not only be based on political sentiment since the countries are landlocked countries that depend on infrastructure in neighbouring countries to trade with the rest of the world.
  • The exit may have an impact on commodity prices if the three countries continue to transport their goods through other ECOWAS member countries, and they may find themselves in extreme economic isolation.
  • Africa is going through strategic integration in terms of trade and development. The exit of the three countries would mean decoupling the continent, and this would pose a significant setback to the ongoing integration of Africa being achieved through the AfCFTA. 
  • African leaders need to have an honest conversation with each other to stop external interventions in the continent’s affairs and formulate policies that suit the people of Africa.

Impact on Borderless Africa 

The Borderless Africa campaign had a target to achieve an Africa where Africans can move around their continent without the current restrictions or visa requirements, as well as for better trade, integration, and development.

The ECOWAS Protocol on the Free Movement of Persons, Residences, and Establishments allows nationals of member nations, including Niger, Burkina Faso, and Mali, to enter member countries without a visa. According to the 2023 Africa Visa Openness Report, 97% of ECOWAS country-to-country travel routes require no visa for regional individuals. Because people of the three Sahel states trade with West African countries and other nations, they are likely to lose these rights, unless they are protected by separate bilateral agreements. In addition, if the trio leave ECOWAS, the remaining members may begin to levy import duties or require visas from their citizens. 

Impact on Trade Relations and Economic Integration 

The landlocked countries of Niger, Mali, and Burkina Faso are among the poorest on the continent; however, if the secession move by these landlocked countries is carried out, it’ll undoubtedly disrupt the region’s trade and service flow. In 2022, total trade volumes, including imports and exports, from the ECOWAS region to the rest of the world totaled $277.22 billion, according to data from the region’s Trade Information System (ECOTIS) portal. Total exports from ECOWAS were worth $131.36bn. Burkina Faso’s contributed $4.55 billion out of this number; Mali exported $3.91 billion worth of goods; and trade with the rest of the world accounted for $446.14 million. Mali’s imports were worth $6.45bn, Burkina Faso $5.63bn, and Niger $3.79bn. While the economies of the three countries account for just 8% of ECOWAS GDP, withdrawing from ECOWAS may amount to the countries condemning themselves to economic isolation. 

Setbacks on the AfCFTA 

Africa is undergoing profound changes as the region becomes more integrated, accelerated by the African Continental Free Trade Area (AfCFTA). The full implementation of the AfCFTA agreement is projected to increase real incomes by 7%, or nearly $450 billion. 

In addition to the economic impact of the announced withdrawal, it also poses a significant challenge to the African Continental Free Trade Area (AfCFTA). The regional economic blocs are the pillars of the African Continental Free Trade Area (AfCFTA). The shrinking of ECOWAS is likely to weaken the pillars of the AfCFTA. 

Laudable innovations such as the proposed Eco currency, a centralized currency for the region, and the Pan-African Payment and Settlement System (PAPSS), the centralized payment and settlement system for intra-African trade in goods and services, would be affected by the exit. Also, the progress made with AfCFTA in terms of trade and movement of people would be slowed down by the withdrawal of the three countries. 

While both parties are likely to be affected by the announced exit, there is still room for proactive strategies to mitigate the fallout. The military governments and ECOWAS need to explore realistic avenues for regional cooperation, international diplomacy, and innovative business solutions capable of putting an end to this unprecedented situation.  


  • 12th January, 2024
  • 3 min reading

Recently, while sharing valuable tips on mastering adaptability in entrepreneurship and navigating career transitions on the BLACK RISE Podcast Series with Flavilla Fongang, ETK Managing Director Bolajo Sofoluwe emphasised that success is a marathon, not a sprint.

The same could be said about doing business in Africa. If you are a company trying to enter the African market in 2024, our advice to ‘newbies’ is to treat doing business in Africa as a marathon, not a sprint.

Do you need a crash course on entering the African market? Our FREE Market Entry Guide will teach you all you need to know, from picking the right partners to selecting the suitable market for your product and service, promotion, and finding your African client base.

Doing business in Africa is a marathon; if you aren’t physically fit, don’t start. African marketplaces require a significant amount of discipline, attention, time, and investment. The goal is to cross the finish line, and whether you’re first or last, the real achievement is getting started and earning the “medal” of success.

Before you get started, it’s crucial to outline your market entry objectives when considering expansion and entry into the vibrant African markets. Whether you’re eyeing Nigeria, Ghana, Kenya, South Africa, or any other country on the continent, consider these key points:

Business Objectives for Africa Expansion
It is critical to define your African expansion goals and how success will be judged. Set precise targets to help you track your development and measure your triumphs as a starting point. Measuring progress and determining whether your strategy is performing as anticipated can be challenging without clearly defined targets. This must be in line with the goals of your firm. For example, if you are expanding into a new African market like Ghana, your objectives could include increasing your customer base, increasing revenue, or enhancing brand visibility.

Understand your Sales Value or Volume
Rather than monetary profit, your targeted sales volume reflects the quantity of products you need to sell in your chosen African market. While it may appear that sales volume is less essential, this is not true. Africa’s growing population presents significant prospects for retail and distribution expansion. As a result, your sales volume is an important sign of the health of your African business. It enables you to monitor the effectiveness of marketing initiatives, assess the efforts of sales personnel, and select the ideal sites for real stores.

Identify Relevant Product or Service
If you have considered direct sales or exporting as your main entry options into your chosen African market, the overall success of your export business in Africa will depend strongly on the products and markets you have chosen to export to.
The right market can give you a competitive advantage and the chance to expand your business. On the other hand, picking the wrong market can lead to low sales, higher expenses, and legal difficulties.

Define your Target Market or Markets
When expanding into Africa, one of the major areas to consider is market size. While most African countries can boast of a sizeable population, a market worth targeting should be sizeable enough to be profitable, have growth potential, not already be swamped by competitors, be accessible, and fit with your firm’s mission and objectives.

Allocating Resources for Project Success
Funds and resources play a vital role in the success of your expansion into African markets. You might have a great idea to compete in the sustainable energy market in Africa. However, it is a business that is capital-intensive. What this means is that you will either need a lot of money or must be able to raise funds. The question then is: does your organisation have the resources to do business in Africa?

Is your business eyeing economic opportunities in Africa? Our team of African business expansion experts is ready to guide you in achieving your African market entry goals.

  • 10th October, 2023
  • 2 min reading

We are building an Africa-focused Environmental, Social, and Corporate Governance (ESG) framework that will help companies meaningfully measure how they are performing with respect to the non-financial risks and opportunities inherent to their day-to-day operations.

At our recent partner event in Lagos, Nigeria, ETK Group Managing Direct, Mrs. Bolaji Sofoluwe, unveiled our new ESG framework for assessing companies using a series of guided questions and assessments. She revealed that “while none of the existing frameworks have implemented a scoring system, ETK Africa-focused ESG framework intends to align with best practices to ensure that the scoring system is reflective of what is adopted internationally”.

Brent Barnette, Operations Director at ETK Group, also highlighted the importance of an Africa-focused ESG approach to drive better results for businesses, including a variety of baseline assessments such as materiality, risk, and impact of supply chain challenges, as well as strategy development, implementation of mitigation and adaptation plans, and other services to ensure meaningful results for businesses.

The event also explored the need for managed services solutions to support businesses and entrepreneurs to successfully run their operations while they are temporarily or permanently away from the country their businesses are located in.

ETK Group is a market expansion, trade, and development consultancy provider positioned to contribute to the growth of the African business market by bringing great business opportunities from around the world.  We are the leader in Africa in market entry and business expansion and the go-to-market entry partner for businesses globally. ETK supports global and local businesses with effective strategy, planning, implementation, and e-consultancy to enable seamless and successful expansion into and across Africa.

We are strategically connected to international markets, which offers unique and lasting value to its clients. It has also delivered projects in 34 African markets and influenced over $1 billion worth of deals, making us one of the most prolific service providers in the African space.

ETK ConnectXperience was our second event in Nigeria, and it presented various partnership and networking opportunities to enhance businesses’ competitive edge and fuel their growth in the global marketplace.

Notable guests at the event included representatives of the Bank of Industry, the International Finance Corporation, Mastercard Foundation, General Electric, Africa Prudential, and other reputable organisations.

  • 15th December, 2021
  • 7 min reading

Overview of tech investment opportunities in Africa

Technology is an important part of any country’s modernisation strategy; technology developments in health, communication, and economy benefit all nations. The most powerful countries in the world are also associated with technological breakthroughs, which emphasises the importance and influence that can be generated by developing a technologically integrated society.

As a result, there is a widespread misconception that Africa lags behind the rest of the world in technological breakthroughs; nevertheless, recent achievements are gradually dispelling this myth and significantly repositioning the continent in this regard.

Over the last decade, digital connectivity has rapidly spread across Africa. More than 300 million Africans acquired Internet connectivity between 2010 and 2019, with approximately 500 million more smartphone connections. According to the International Finance Corporation, the number of Internet users in Africa is predicted to increase by 11% over the next decade, accounting for 16% of the global total.

The number of mobile phone users has grown at an exponential rate, from 330,000 in 2001 to 30 million in 2013. It could be argued that the Internet is the first piece of technology to have had a substantial impact on Africa’s technological advancement.

In Africa, a 10% increase in mobile Internet coverage raises GDP per capita by 2.5 percent, against only 2% globally. Furthermore, a 10% rise in digitisation, or the conversion of information to a digital medium, increases GDP per capita in Africa by 1.9%, compared to 1% in non-OECD nations. More broadly, reaching 75% of the population with Internet access could result in the creation of 44 million jobs. It’s safe to claim that the mobile technology industry is a significant economic driver and has resulted in increased trade and investment opportunities in Africa.

In Sub-Saharan Africa, mobile technology and services accounted for 8.6% of total GDP in 2018, a contribution that amounted to over $144 billion of economic value added. In addition, the mobile sector supported approximately 3.5 million jobs, generating an extra $15.6 billion in taxes. As a result of increasing connectivity, businesses and communities have been able to leapfrog societal challenges and weak infrastructure through the use of new technology, which has paved the way for economic progress.

by the end of 2019, Sub-Saharan Africa had approximately 144 mobile money providers, servicing over 469 million registered accounts with $1.25 billion in daily transactions, compared to 298 million registered accounts for traditional bank accounts in 2017. Mobile devices are now the accepted medium to connecting to the Internet, and to carry out financial transactions in Africa.

investment opportunities in Africa

Internet’s contribution to GDP in Africa

Fintech, healthtech, media and entertainment, e-mobility and food delivery, and B2B e-Logistics are just a few of the emerging verticals in Africa that are fuelling innovation. Over the last decade, Africa’s Internet gross domestic product (iGDP) – defined as the Internet’s contribution to GDP — has rapidly increased. In 2012, less than a decade ago, the Internet economy in Africa was estimated to be around 1.1% of GDP, or $30 billion. According to Accenture, iGDP might add $115 billion to Africa’s 2.554 trillion GDP (4.5%) in 2020, up from $99.7 billion in 2019, with the potential to rise as economies develop. By comparison, the Internet sector contributed 9% of GDP in industrialised economies like the United States in 2018.

The Internet economy has the potential to add $180 billion to Africa’s GDP by 2025, rising to $712 billion by 2050. Over the next five years, COVID-19 is expected to limit economic growth in Africa and the rest of the world. Despite the pandemic, Africa’s growth will be driven by the Internet economy’s resilience, private consumption, developer skill, public and private investment, digital infrastructure investments, and new government laws and regulations.

Investments did pick up, and from July, VC funding on the continent had a bullish run until December. Despite the fact that 2020 did not see the same level of megadeals as 2019, and did not surpass the $2 billion barrier, it proved to be a successful year for acquisitions. High-profile instances include WorldRemit’s $500 million purchase of Sendwave, Network International’s $288 million purchase of DPO Group, and Stripe’s more than $200 million purchase of Paystack.

Sector analysis of Africa’s Internet economy Sector

Fintech has evolved into a major driving force in the African Internet economy, directly contributing to GDP growth while also enabling a variety of other industries. Fintech startups continue to be Africa’s most funded sector, with a significant year-on-year increase. The vertical received $836 million in investment across 65 deals in 2019, up from $379 million in 2018 across 42 deals, resulting in a 120% increase in funding and a 55% increase in deal volume year over year (YoY).

Fintech startups have remained the most popular destination for tech investment opportunities in Africa, growing at a CAGR of 24% over the last decade and accounting for 54% of all Africa startup funding in 2019. The fintech sector in Africa is expanding in part to serve the unbanked and financially excluded population. However, the rise of these solutions and increased access to mobile technologies is driving demand and growth in this sector. The opportunities arising from vertical expansion beyond traditional banking services are also a contributing factor.

Surprisingly, despite the Covid pandemic, Africa’s venture capital ecosystem has been steadily growing in recent years, with an influx of funding from local and international investors reaching previously unheard-of levels. According to Africa-focused firm Partech Africa, African entrepreneurs raised a modest $400 million in 2015, compared to the $2 billion invested in the continent in 2019.

These figures were expected to rise in 2020, but with the pandemic sparking an economic downturn, businesses were forced to downsize as investors re-strategized, which slowed down activities during the first few months of the year.

However, in an unexpected turn of events, investments began to increase, and VC funding on the continent began a bullish trend that lasted until December 2020. Despite the fact that 2020 did not witness the same flurry of megadeals as 2019, and did not break the $2 billion barrier, it was a good year for acquisitions. The $500 million purchase of Sendwave by WorldRemit, the $288 million purchase of DPO Group by Network International, and the more than $200 million purchase of Paystack by Stripe were all high-profile acquisitions.

tech investment opportunities in Africa

Four key factors that are having a positive impact on technological investments in Africa:

  • A rapidly rising urban and mobile population is driving digital consumption growth

The African economy benefits greatly from a growing urban and mobile population. Internet penetration is currently at 40%, and a 10% increase in mobile Internet penetration can boost GDP per capita in Africa by 2.5 percent, compared to 2% globally. Increasing Internet penetration to 75% could result in the creation of 44 million new jobs.

  • The tech sector is driven by a thriving developer and startup scene

Africa’s tech talent is at an all-time high, and it will only get better. There are approximately 690,000 professional developers in Africa, with more than half concentrated in just five countries: Egypt, Kenya, Morocco, Nigeria, and South Africa. Despite the challenges that the African startup ecosystem faces, the future appears bright as venture capital continues to pour into the continent.

  • Internet infrastructure investments are further boosting connectivity

More people will be able to enjoy cheaper and faster Internet access as infrastructure continues to improve. Subsea and terrestrial fibre-optic infrastructure investments have fueled the rapid expansion of global Internet capacity. For example, Equiano, Google’s own undersea cable, is set to be finished in 2022.

  • Pro-innovator regulation can benefit the African Internet economy

Inconsistencies in regulatory requirements make it difficult for businesses to gain market access and raise capital. Initiatives such as startup acts and regional harmonisation are examples of progressive initiatives that are promoting mutually beneficial growth. Entrepreneurs, investors, and policymakers must continue to communicate in order to foster enabling environments conducive to the growth of digital firms.

Development opportunities

Africa can take advantage of the Internet economy to help informal businesses and workers overcome challenges. For example, businesses in Africa’s informal sector have limited access to finance and quite often do not make use of modern business practises, particularly in bookkeeping and accounting. As a result, they often incur higher costs when interacting with suppliers or clients due to insufficient logistics, a plethora of middlemen, and the prevalence of cash transactions. Furthermore, access to electricity is less certain in the informal sector, particularly in rural areas, creating an overall unpredictable economic environment.

Despite this, the vast majority of workers in the informal sector own a mobile phone, often used for both private and business purposes. Mobile phone ownership in the informal sector is broadly correlated with access to digital connectivity at the national level.

COVID-19 pandemic highlighted how digital platforms that service the informal sector can support societal resilience. Because of their ability to quickly reengineer their platforms, digital platforms were critical in supporting government responses to the outbreak in several markets, particularly in reaching the underserved. This further emphasises the importance of technology in supporting Africa’s economic growth and stability.

The most significant development opportunity lies within Africa’s significant population growth and demographic transition, which is driving, increased consumption. As they mature into household decision-makers, young African consumers are becoming more rich and globalised. The proportion of the population that is of working age will continue to rise; by 2050, Africa will have the lowest dependency ratio in the world.

As a result, the continent’s competitiveness in both skilled and unskilled labour will improve, resulting in greater consumer purchasing power. By 2030, Africa is expected to have more than 1.7 billion consumers, with the ability to spend a whopping $2.5 trillion.

tech investment opportunities in Africa

What does the future hold?

Year after year, African technology startups continue to raise record-breaking sums of money. While actual investment numbers vary, estimations show that investment opportunities in Africa’s digital sector have increased year after year for the past five years. The attraction and reputation of Africa as a venture capital investment destination is growing, attracting investors ready to take some early risks based on the continents attractive opportunities and long-term economic potential.

This expansion is being largely driven by the increased ease of doing business, improved business environments, and the world’s youngest and fastest-growing labour force. Improved government policies that encourage greater cooperation across the continent and across various sectors of the economy have given investors even more reason to be optimistic.

Not to mention the implementation of the African Continental Free Trade Area (AfCFTA), which will bring together a market of 1.3 billion people with a combined GDP of $2.6 trillion. AfCFTA aims to reduce tariffs on 90% of all goods and promote free movement of goods, services, capital, and people throughout Africa. It will make Africa’s regional economic communities more integrated and accessible, making it easier to do business across the continent.

Despite this progress, investment in Africa remains in its early stages when compared to other emerging global trading blocs such as Southeast Asia. This indicates that there are still untapped technology investment opportunities in Africa, but this will require governments to become more investor-friendly to achieve continued and consistent investment growth.

In conclusion, despite the pandemic and other challenges facing the African continent, trade and investment opportunities in Africa continue to thrive, and the future of Africa looks bright with continued investment in technology and progressive policy initiatives such as the AfCFTA.

  • 14th July, 2021
  • 3 min reading

Businesses within a trade and investment environment have spent most of the last fifteen months attempting to adjust to unusual conditions. While the struggle against the pandemic is far from over, there is now a glimmer of hope and optimism in the air. The reality of things now is that companies or individuals that want to trade and invest in Africa must adjust their approach in order to survive.

Various reports suggest that economic recovery from the pandemic could take 2 years, or more. The Africa’s Pulse report which was recently released by the World Bank, suggests that economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020 and beyond, depending on the success of measures taken to mitigate the pandemic’s effects.

The pandemic has presented a challenge for businesses to reinvent themselves in order to survive and take advantage of prevailing economic opportunities; the main way of achieving this is by restructuring themselves and their business operations. Adaptability is the key to solving this conundrum, and any entity that is not able to adapt and be agile within a short period of time is unlikely to survive in the long-term. The inability to adapt quickly or become agile and take advantage of economic opportunities in the post pandemic environment is one of the key challenge’s businesses are facing in Africa. So how do businesses that wish to take advantage of trade and investment opportunities in Africa navigate the new post pandemic world, and what are the economic opportunities?


The Do’s and Dont’s of Trade and Investment in Africa Post Pandemic

The Do’s

Technology is now a game changer for businesses – The rapid adoption of technology, digitisation, and new ways of working will continue to accelerate. Most of the businesses that did not embrace technology at the onset of the pandemic are nowhere to be found today.

The name of the game is surviving rather than economic efficiency – To secure survival in the post-pandemic environment, contingency planning should be integrated into every link of the value chain. Businesses will have to be much more strategic in deciding which alliances are vital and which are transactional, rather than building relationships based on leverage and getting the better end of the bargain wherever feasible.

Trade and investment initiatives need to look inwards; hence the strengthening of intra-regional and Intra-Africa trade is critical. Regional partnerships are critical for businesses. There needs to be concerted efforts to harmonize trade-related regulations, customs controls, and reduce both tariff and non-tariff barriers. The implementation of the African Continental Free Trade Area (AfCFTA) provides opportunity for this to become a reality.

The Don’ts

Don’t be stuck in your old ways – Companies that hurry back to old ways of trading in Africa may very well stumble and stagger in the decade to come. The pandemic has given companies that want to trade and invest in Africa the opportunity to transform and prepare for a more turbulent world. First, they must be able to fully reimagine the boundaries of their company from an African trade and investment perspective.

What do you want inside vs. outside? In other words, post pandemic environment (the outside) dictates that companies that revert to business as usual (the inside) will not survive for long, the way businesses must now function are dependent on the adoption of a set of different rules and skills. These emerging post pandemic rules and skill sets are going to be based on two key principles, namely the ability to be agile and quickly adopt change, and secondly, the mindset to understand the importance and necessity for change.

Don’t assume anything – Don’t take your existing clients for granted, post pandemic you should throw away old assumptions: The raw customer needs that will define your industry may be drastically different. What are your customer’s needs? Be resilient and adapt as you progress, responding to your customers’ evolving needs. And beware of new entrants that could leapfrog you to meet those needs faster, cheaper and better.

In conclusion, your Africa trade and investment strategy post pandemic will be less about beating your economic opponents and more about how businesses can help to battle a bigger, common adversary, such as climate change, pandemics, or maybe socio-political ills such as inequality.