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Technology advances key to the next decade of African economic growth, spurring urbanisation and demand for commercial real estate.

The development of information communications and environmental technology, alongside the growth of technology electronics clusters, will be critical in securing a more sustainable economic future for African economies. That’s according to leading diversified professional services and investment management firm Colliers which has just released  Inside Africa - Six Nations Spotlight   focusing on South Africa, Egypt, Nigeria, Kenya, Ghana and Cameroon.
Corporate investment into Africa

In recent years there has been a clear shift in the type of corporate investment into Africa, with a greater focus on technology-driven sectors. The expansion of occupier footprints in Africa, including those of multinational companies, is stemming from the desire to service demand-side growth and establishing a broader, more balanced global-to-regional production process and operational footprint.

“The expansion of the service sector in Africa is now supported by the commencement of the African Continental Free Trade Area (AfCFTA) in January 2021”, says Damian Harrington, Director, Head of EMEA Research. “This signifies the start of a new trading era for Africa, one that could support and help catalyse the continent’s service sector expansion over the coming decade. The AfCFTA liberalisation process is likely to accelerate the growth of technological, financial and business services and education, alongside the trading of physical goods.” 

Governance & doing business

Several nations have been improving the ease of doing business at a national level to support greater corporate investment. South Africa and Kenya are ahead of the global average, with Egypt and Ghana not far behind, whereas Cameroon and Nigeria have further work to do.

Labour force

The size of the labour force in the most populous nations is low relative to the population size, with figures for Nigeria and Egypt at only 30% of the population.  Cameroon, Kenya and Ghana have much higher labour force rates, at just under 50%. This is closer to European norms of around 53%, hinting at the latter three nations having better developed governance and education systems - Kenya achieving the best scores for doing business out of the six compared.

Technology & infrastructure

When it comes to technology, the mobile subscription levels are quite staggering - they are higher in South Africa (1.66 per person) and Ghana (1.34 per person) than for established western European economies (average of 1.24 per person). Conversely, fixed broadband and server penetration rates are significantly lower – fixed broadband subscriptions are only 7.8% of the size of established European locations. This is where there is huge scope for investment and growth on the back of building a more robust and accessible telecoms infrastructure to support service-led, not just merchandise-export-led, expansion.

Economic composition & exports 

An examination of the composition of economic/business sector output and exports reinforces the fact that higher GDP and GDP/per capita comes with a greater engagement in manufacturing and services - with South Africa, Nigeria and Egypt leading the way. 
Nigeria is heavily driven by the hydrocarbons industry and the upstream and downstream plastics and chemicals businesses that are linked to it. For Kenya, Ghana and Cameroon, the economy is more agriculturally-led, particularly for exports.

Real estate requirements - focus on offices

Service-sector expansion has led to an increase in demand for commercial real estate but, like all other markets across the globe, the pandemic has put a short-term dent in the long-term expansion of Africa’s commercial real estate market with agile working increasing in popularity. 
“If there is one word to characterize the office markets in Africa in 2021 it would be unpredictability”, says Filip Rerko, Head of Complex and Emerging Markets EMEA. “The physical impact of the pandemic in terms of reduced mobility, combined with an economic slowdown and historic oversupply in key markets, has led to rises in vacancy rates and decreases in rents. While each market differs, the common consensus is that this situation will continue for at least the next 12 months during which time the core African markets will remain firmly slanted in favour of occupiers.”

Rerko goes on to say “In comparison, the overall slowdown in the commercial markets has positively impacted the residential market. Staff are looking for bigger houses in order to be able to work from home, as corporations continue to support agile working”.

In conclusion the report highlights that, despite Africa’s robust demographic profile supporting large-scale growth and urbanization, improving governance will be critical in managing a post-pandemic recovery. As Covid-19 cases continue to surge across the continent, most African governments have made little progress in securing vaccines. Dependence on the WHO’s Covax programme, which is committed to vaccinating 20% of African nations, underlines a challenging year or two ahead.

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Aleksandra Wasilewska

PR Director | EMEA


I have 16 year experience in PR and marketing communication. I worked among others for NFI Magna Polonia; Skanska Polska; Apsys Polska and Polish Council of ShoppingCentres. I implemented projects from the field of consumer marketing; market research; corporate communication; as well as brand building; positioning and evolution in Skanska  and Apsys. I am the author of numerous articles on PR and marketing communication.

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