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Tanzania

African Tourism Industry - The Future

The tourism industry of any country always has a great contribution in running its economy smoothly and efficiently. But the African tourism industry doesn’t have a same successful story. Before 2005, the tourism industry of Africa was abruptly damaged because of some political and managerial issues. After that era, the tourism industry had a little uplift in the graph before people started to explore more and more about the weather and people of Africa. Tourists were also inclined towards the wildlife of Africa. Many television serials/shows were recorded in the planes of Africa.


In 2013, the whole scenario was changed. The Africa was feeling the successful lift in the tourism industry in 2013 and many governmental and private organizations started to take interest in it. That’s the reason why Chief Economist Mthuli Ncube has thrown light on the issues that were associated with the African tourism. The first and the most important issue was the investment for improving the overall infrastructure sectors.

African tourism industry is elevating day by day, so the African soil is playing the role of ‘investible’ asset for the private sectors to invest. Surprisingly, the 49 million tourists arrivals were recorded in the 2010 and the figure was 50 million in 2012. I would like to mention Africa, a kind of un-harvested region with a lot of minerals where you can grow anything because you already have the minerals. All you need to do is to take a step forward and invest in the following list of great investment sites. So, let’s get started with the first one!

Uganda: Uganda is commonly famous due to the Lake Victoria. Lake Victoria is actually comprised of hundreds of bodies of water. These water bodies haven’t yet exploited, so they can be a perfect spot to make some ‘serious’ investments. A luxurious cruise and balloon flights can become perfect investment plans.

Tanzania: Tanzania follows the Uganda in terms of beauty and successful tourism spot. Many attractive national parks are the vital spots for the tourists but most of them aren’t reachable due to bumpy roads and other traveling burdens. Arusha National Park is the best example of such national parks. The increase in the air flights will only make the burden on Dar es Salaam and associated cities. The investment in such sectors will return productive dividends as the prices will skyrocket in shape of limited offers. Investment in hotel operators and tour operators will be the best place to invest in Tanzania.

Angola and Nigeria: Angola has been known best for the agricultural yields for the country. Angola contributes most of the agricultural sector of the Africa and naturally, this region is well suited for the crops. Due to little know-how about the scientific procedures and technical tips needed for the agriculture, Angola hasn’t been producing what it should produce. Same is the case with Nigerian industry. Most of the industrial states of Africa are based in Nigeria. A Little know-how and fewer mechanical power lead to the destruction of the industrial sector. Minerals like gold, zinc, bauxite, coal, iron ore and tin are the common minerals that can be caught just by little investment. Investment in this sector will also be as productive as it is in the Uganda. 

 

African Investment and Trade: The Future

One would think that on seeing the economic scenario across the developing nations in Africa, investors could not be thinking about zeroing down on Africa as their next destination to strike a deal on investment or trade. Analysts tends to believe that people would rather wait for nations to stabilise before investment or trade will follow. This is a complete misrepresentation of the majority of African states. There are plenty of stable African states that are able to be dealt in straight away and our Gravis Global Invest team are here to help!

Immediately there are 5 major types of trade and investment opportunities on the continent.

These are:

Agriculture: ranking among the business opportunities available to investors and entrepreneurs in Africa, the continent is home to 60% of the world's total uncultivated arable land. As the world's population is now above 7 billion, there must be a systematic approach for producing enough food to feed that many mouths. The challenge in this case has to do with poor connecting infrastructure to facilitate product making it to exit points to enter into markets.  There are also moves with a number of nations to remove trade barriers as well. This allows for agricultural development to support other 'flow on' industries such as fertilisers, pesticides, seeds production and processing and refining businesses.

Infrastructure: this sector is second in importance only to agriculture for investment. Though successive African governments have made efforts to improve infrastructure, a huge deficit in this sector still looms thereby creating bottlenecks in the smooth delivery of trade and investment deals. The World Bank in 2008 estimated that the continent needed US$80Billion annually to cover the infrastructure deficit on the continent. This provides an opportunity for private investors to invest in Build Own Operate and Transfer (BOOT) or Public-Private Partnerships (PPP) deals with governments, especially for infrastructure such as airports, electricity networks, railway networks, roads and airport facilities.

Tourism: Kenya, Mauritius and Tanzania have become some of the worlds favourite tourism spots. There have been estimates that up to 50 million tourists per year coming through the continent since 2012 with that number rising year to year. This creates side markets that become investment ready in hotels, resorts, airline business, transport businesses and tourism related tour activities. 

Mining: This is a sector that has been developed in some parts already and has large amounts of Chinese investment. Chinese companies have been buying the world's major miners out of their interests on the continent which is freeing them up to make new investment elsewhere. It also therefore means that there are large Chinese slabs of influence in this sector. There are however nations in the continent with under-developed mining industries where skills shortages and infrastructure shortages have lead to this underdevelopment. 

Fast Moving Consumer Goods (FMCG): For the first time 2012 saw African consumer spending go past the one trillion dollars (US$1 trillion). With a population that is one of the fastest growing in the world, a middle class of over three hundred million (300 Million) people, the FMCG sector promises to very profitable in the years ahead. Food, beverages, home and personal care products provide an ample opportunity for new profits as the African middle class grows and expands in more countries on the continent. This is a market though that will work on a 'first come, first serve' basis and will lead to long term market dominance if done properly with a good market entry plan.