Business & Economy

Gabon tops for retail despite low population

Gabon is the most attractive sub-Saharan country for international retailers to target due to strong economic growth and a stable middle class, according to AT Kearney’s African Retail Development index.
The study, which evaluated 48 countries in sub-Saharan Africa, ranked Gabon ahead of Botswana,Angola andNigeria, Africa’s biggest economy.
The index, published by the US consultancy on September 7, is based on factors including the size of the urban population, business efficiency and risk of investment.
‘Scale will come to sub-Saharan Africa only when a few things happen, particularly the development of a shopping culture,’ AT Kearney consultants, including Mike Moriarty and Jaco Prinsloo, are quoted by Bloomberg as saying in the report. ‘The first priority in most markets is for basics and dry goods, but over time fresh supply chains and modern shopping space will be increasingly needed.’
South African retailers including Shoprite, Woolworths and Pick n Pay are expanding in Africa to take advantage of higher economic growth rates than in their home market, and rising household incomes. US chain Walmart is adding new stores in sub-Saharan Africa via its Johannesburg-based unit, Massmart Holdings. None of the four chains has entered Gabon.
Gabon is expected to see economic growth of 5.5 percent next year, compared with an average of 5.1 percent for sub-Saharan African countries, according to the International Monetary Fund. About 86 percent of the population are urbanised, Kearney said, while its stable middle class is ‘exactly what is lacking in so many other sub-Saharan African countries,’ says the report.
Gabon’s population of 1.7 million is its biggest downside, Kearney said, deterring retailers seeking larger populations and potentially higher sales volumes. Gabon was ranked as the fifth most attractive country by the consultancy last year.
Other countries that make the top 15 include SA, Ethiopia, Ghana and Zambia. Kenya did not make the list as the East African country’s urbanisation rate remains low, while there is still some security risk following a series of attacks by Islamist militants, according to the report.

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