6 Kenyan companies are part of African businesses that are overcoming longstanding geographic, geopolitical, transportation, and infrastructure barriers to drive the economic integration of the continent.
The companies identified were, Bidco, Safaricom, Tecno Brain, M-Kopa, Nation Media Group and Equity Bank.
The new report by The Boston Consulting Group, Pioneering One Africa: African Corporations Trail-Blazing Across the Continent, argues that while fragmentation in many forms remains a major problem for businesses in Africa, economic integration is not only taking place but also gathering speed.
The primary drivers come from within the continent, led by African corporate entrepreneurs.
The report identifies 150 companies that are blazing the trail toward a more integrated Africa and the eight factors that explain how these companies are making an impact.
Patrick Dupoux, BCG Senior Partner and co-author of the report said that fragmentation in Africa is much greater than anywhere else in the world, and it adds significantly to the economic challenges facing countries that typically lack the critical mass to compete globally.
“Despite these barriers, we see more signs of economic integration with each passing month, quarter, and year. The primary drivers come from within the continent, led by African business. Africa invests more in Africa, Africa trades more with Africa, and Africans travel more to Africa,” said Patrick Dupoux.
Between 2006–2007 and 2015–2016, the average annual amount of African foreign direct investment—money that African companies invested in African countries—nearly tripled, from $3.7 billion to $10 billion. Over the same period, the average number of intraregional M&A deals each year jumped from 238 to 418, with African-led transactions representing more than half of all African deals in 2015.
Meanwhile, average annual intra-African exports increased from $41 billion to $65 billion, and the average annual number of African tourists (Africans traveling in Africa) rose from 19 million to 30 million. African tourists made up more than half of all tourists on the continent in 2015–2016.
BCG identified 150 companies that are blazing a trail toward a more integrated Africa. They consist of 75 Africa-based companies and an equal number of MNCs that have established impressive track records in Africa and are contributing to further integration.
The African pioneers come from 18 countries on the continent32 are based in South Africa; 10 in Morocco; Kenya and Nigeria are each home to 6, 4 are from Egypt, and 2 each come from Côte d’Ivoire, Mauritius, Tanzania, and Tunisia.
The MNCs are a global group, with France, the United Kingdom, and the United States most strongly represented.
At the same time, a dozen MNCs from China, India, Indonesia, Qatar, and the UAE are active across Africa.
This report gives credit to African corporate entrepreneurs who, by investing early in building a footprint on the continent, are giving a sense of reality to the integration of Africa.