Business Monitor’s whitepaper assesses Africa’s fast growing IT industry
(PRWEB UK) 1 April 2014 -- Business Monitor has just released its latest analysis on the investment opportunities available in the IT industry in Africa in their new whitepaper Africa Investment Opportunities in Information Technology: Risk/Reward Analysis. The whitepaper includes Business Monitor’s country comparative risks and rewards assessment for the IT industry in Africa, as well as particular focus on countries of interest Egypt and South Africa.
A snapshot of the whitepaper:
The region's IT sector remains one of the fastest growing globally, albeit from a low base. Although growth is mainly driven by governments and large companies in most cases, BMI are seeing an increase in the adoption of IT services and solutions by small- and medium-sized enterprises and consumers, owing to improved access to high-speed data networks and the availability of affordable devices.
Some of the factors that will drive growth in the IT sector in 2014 include government-led IT initiatives such as e-governance and schools computerisation projects, investments in next-generation network (NGN) infrastructure, and strong private consumption growth. Business Monitor is bullish over the growth outlook for cloud computing services in the region, despite the significant downside risks, as businesses adopting IT solutions for the first time bypass traditional data storage and application usage models. BMI expect the uptake of cloud services and the growing threat of cyber crimes to boost demand for IT security solutions in the region.
Qatar retains the top position on our table with an aggregate score of 68.4, just 0.2pts above second ranked Israel. Qatar is one of two countries with a Country Rewards score of 100, reflecting strong performances in key macroeconomic indicators such as GDP per capita, urbanisation and employment. Qatar has the third highest score in the Industry Rewards category despite having one of the smaller populations in the region. Qatar's score in this category benefits from the expected increase in IT investments in the run-up to the 2022 FIFA World Cup to be hosted by the country.
Despite losing the top ratings spot to Qatar, Israel remains the most developed IT market in the region, with advanced production capabilities and high government, corporate and consumer spend on IT products and services. Israel has the highest score in the Industry Risks category owing to the implementation of high standards on IP protection and anti-piracy laws. BMI believe this factor is crucial to the market's attractiveness to major global IT firms. Some of the major firms that consolidated their footprint in Israel through acquisitions and partnerships with local firms in 2013 include IBM, HP, Intel and Cisco Systems.
The UAE, in third position with an aggregate score of 65.4, has arguably the most dynamic IT market among the GCC states, owing to its positioning as a regional hub for many global businesses, significant government spending on infrastructure projects and a large secondary market from temporary visitors. BMI have a positive growth outlook for the UAE's IT market based on the country's macroeconomic fundamentals and the development of next-generation broadband infrastructure. BMI expect these factors to form the basis of continued government and private investment in advanced IT solutions, as well as the uptake of IT products and services by consumers.
Kuwait and Saudi Arabia are in fourth and fifth positions on our table. Kuwait is boosted by its maximum score in the Country Rewards category, but limited in the Industry Rewards segment by its small population. The country lags behind other GCC states in the development of fibre-based fixed network infrastructure, a development that could stifle growth in the IT sector in the future. Saudi Arabia has a much bigger market in terms of population and has invested more in NGN infrastructure. However, it scores considerably lower than Kuwait in the Country Rewards category owing to a lower GDP per capita and lower urbanisation rate.
South Africa is the highest-ranked African country on our table. It occupies sixth position, ahead of the two remaining GCC states Oman and Bahrain, which have the two lowest Industry Rewards scores in the region because of the small sizes of their markets. In contrast, South Africa benefits from a high Industry Rewards scores owing to its large population and growth potential in the consumer segment. South Africa is still the hub for Africa's IT services market, although it is facing increasing competition from other countries such as Kenya.
Nigeria is in ninth position on our table, with a similar score to South Africa in the Industry Rewards category mainly because of its large population. However, its Country Rewards is one of the lowest in the region, reflecting a GDP per capita of less than US$2,000. Although the low purchasing power of majority of consumers is stifling growth in the consumer segment, BMI notes there are significant growth opportunities in the enterprise sector, with the financial services, oil & gas and telecoms sectors driving major investments. In future BMI expect the privatisation of the power sector and developments in the aviation and retail sectors to boost growth…
To read the rest of this brand new whitepaper and to gain access to even more of Business Monitor’s expert views and analysis, please click here or contact Sarah Sutcliffe at Press(at)businessmonitor(dot)com.
Business Monitor is a leading, independent provider of proprietary data, analysis, ratings, rankings and forecasts covering 200 countries and 24 industry sectors. It offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities.
Sarah Sutcliffe, Business Monitor International, http://www.businessmonitor.com, +44 2072480468, [email protected]
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