Which key trends will shape sub-Saharan African business?

In 2014, sub-Saharan Africa will remain on a positive growth trajectory, attracting companies from across the world searching for the last investment frontier, says Anna Rosenberg, a senior analyst for sub-Saharan Africa at Frontier Strategy Group. In her blog HowWeMadeitinAfrica.com, Rosenberg outlines five trends that will impact sub-Saharan African business in 2014: • The region’s economy will grow much faster than currently forecast as 25 countries in sub-Saharan Africa are expected to readjust the way they measure GDP by 2016, approximately doubling the overall size of sub-Saharan Africa’s economy on paper. • The relationship with emerging markets will deepen—and competition will get fiercer as Africa-BRICS commercial ties will strengthen further with the planned BRICS Development Bank in South Africa expected to be set up by 2015. But most importantly, Africans are increasingly doing business with each other. Intra-African foreign direct investment grew at 32.5% compound annual growth rate from 2007-2011. • Government spending will increase as they step up spending to tackle infrastructure, education and healthcare deficits. While government budgets are increasing overall, capital spending is taking up an ever larger share of allocated capital. Public spending is directed toward transportation, utilities, housing, education, healthcare and agriculture—with infrastructure investment prioritised. • The cost of doing business will rise as governments are financing public expenditure through subsidy reductions and tax increases to keep budget deficits under control. • Two of the continent’s biggest markets—South Africa and Nigeria—will hold elections in 2014 and 2015 respectively. South Africa’s elections are likely to be followed by economic reforms, increased government spending, and political liberalisation. Nigeria faces a period of volatility ahead of elections in 2015 as political infighting hinders policy making.