Jumia Technologies AG, a leading pan-African e-commerce platform, outlined four macroeconomic trends in Africa.
Broadly speaking, the company’s platform consists of its market, which connects sellers with consumers; its logistics service, which enables the shipping and delivery of packages from sellers to consumers, and its JumiaPay payment service, which, together with its network of licensed payment service providers and other partners, facilitates transactions between active participants on your platform in selected markets.
Africa represents a large and growing consumer market that is positioned for growth, driven by the following key macroeconomic facts and trends:
Increase in urbanization
Urban centers play a critical role in driving economic growth. As of 2020, it is estimated that only 43% of Africans lived in urban centers, compared to 82% in North America and 51% in Asia, according to a Statista report.
However, 60% of Africans are expected to live in urban areas by 2050, indicating organic and migration-driven growth of more than 920 million people to urban centers during that period, according to a 2019 report by The United Nations.
Large and fast-growing: In 2020, Africa comprised about 17% of the world’s population, according to the 2020 IMF report.
Also, according to the 2019 United Nations World Population Outlook Report, the sub-Saharan population would double by 2050 and the populations of North Africa and West Africa would grow 46% by 2050.
Also the United Nations projects that Nigeria will become the third most populous country in the world by 2050, after India and China.
The average age across the African continent was 19.7 years in 2019, more than 10 years younger than the world average of 30.9 in 2019, according to the United Nations.
In this regard, Jumia Technologies believes that this younger generation, born into an “online” world, increasingly seeks access to a wider variety of food, consumer goods and entertainment options as they become increasingly connected. to global consumer trends and become aware of them.
According to the African Development Bank, aggregate private consumption in Africa grew at an average 3.7% per year between 2010 and 2016 and, according to the McKinsey Global Institute, in 2015, consumer and business spending amounted to $ 4 trillion, with businesses spending only a total of 2.6 trillion dollars in 2015.
In 2010, 355 million people, or 34% of the population, were considered “middle class,” according to the African Development Bank.
By 2060, that number is expected to grow to 1.1 billion people or 42% of the population, representing an average annual growth of about 15 million people, according to the same source.
Investments in infrastructure
Investments in infrastructure, which totaled more than $ 62.5 billion in 2016, are key to this growth and are led by strong domestic and foreign direct investment, according to the African Development Bank.
Jumia Technologies is active in three regions of Africa, consisting of 11 countries that together accounted for more than 70% of Africa’s GDP of 2.3 trillion euros in 2020, according to estimates by the International Monetary Fund. The revenue of the companies was 139.6 million euros in 2020.