Africa’s economic rise

Muibat Ijaiya at Strategy Management Partners explains what the continent’s rapid growth means for UK businesses

 

A growing number of UK businesses are increasingly looking to Africa as a key market for long-term growth, driven by structural reforms, demographic momentum, and rapid digital transformation across the continent.

 

Recent developments such as the African Continental Free Trade Area (AfCFTA) and new trade measures unveiled by the UK government, which aim to simplify imports from developing nations, are creating fresh opportunities for businesses seeking growth beyond more traditional markets. These initiatives are designed to strengthen commercial ties, reduce barriers to entry and encourage UK companies to build enduring links with some of the world’s fastest-growing economies. 

 

Underscoring this renewed focus, London Mayor Sadiq Khan recently led the first-ever mayoral trade mission to Africa - visiting Lagos, Accra, Johannesburg, and Cape Town - to promote stronger trade relations with the continent. He also announced plans to host a London‑Africa business summit next year.

 

Our latest research, conducted with 250 business leaders at large UK enterprises, highlights this changing outlook towards Africa. The findings reveal that 50% of UK companies surveyed are already operating in Africa and planning further expansion, while a further 28% are actively exploring opportunities but are uncertain about how to approach market entry. This represents a marked shift in how Africa is viewed - from a high-risk proposition to a strategically important growth market.

 

 

Structural drivers for engagement

The research points to three key drivers behind the rising interest. The main one being Africa’s expanding consumer markets (cited by 61% of respondents), alongside the continent’s rapid adoption of digital technologies and its young digitally connected population. These structural advantages, paired with accelerating reforms, have given UK business leaders fresh reasons to see Africa as a destination for long-term, sustainable growth.

 

Interestingly, philanthropic motivations are not driving the agenda - only 20% of those surveyed cited charity as a reason for engagement. Instead, UK companies are aligning their Africa strategies firmly with economic opportunity and shared value creation.

 

 

Challenges to overcome

Yet despite this optimism, the barriers to realising Africa’s potential remain substantial. The foremost concerns cited by UK businesses include political and country risk (68%), safety and security issues (66.4%), regulatory barriers and tariffs (60.4%), and the continued complexity of cross-border transactions (60%).

 

These challenges underline the need for sustained government and private sector collaboration to address policy obstacles, invest in infrastructure, and ensure that operational environments are robust and transparent.

 

 

Where the opportunities lie

Sectors that are particularly attractive for UK businesses are those that leverage Africa’s strengths - its vast mineral resources, fertile agricultural land, large and increasingly digital-savvy youthful population and the opportunity for infrastructure development. By aligning investments with these fundamentals, companies can drive innovation, expand digital services, strengthen supply chains, develop scalable consumer industries, and build integrated value-chain ecosystems that deliver sustainable growth.

 

Governments and businesses across the continent are shifting focus to attract strategic investors who will build industries, develop talent and create resilient ecosystems. This signals a clear ambition: Africa wants to participate more fairly in global markets — not just as a source of raw materials, but as a producer, innovator and equal partner.

 

 

Five imperatives for UK companies

For those looking to succeed in Africa, five imperatives should guide any market-entry or expansion strategy:

 

1. Tailor your strategy to each market

Africa is a continent of 54 nations - each with its own legal systems, cultures, and regulatory environments. It is important that UK business leaders invest the time and resources to understand the legal, economic and social landscapes of target countries. Rigorous due diligence and realistic risk assessments are non-negotiable.

 

2. Prioritise market needs over resource extraction

Too often, the focus has been on exploiting raw materials rather than building lasting local value. Companies that succeed will be those that identify and address genuine gaps in supply chains, develop products that fit local needs, and build business models rooted in mutual benefit and sustainable demand.

 

3. Build strong local partnerships

Success in Africa demands trust, adaptability and a willingness to learn from those already embedded in local contexts. Building alliances with local businesses, government institutions, established professional firms and community stakeholders can ease entry, strengthen operations and mitigate risks that are otherwise difficult to navigate alone.

 

4. Invest in local talent

Long-term success depends on the depth of local capability. Businesses must be deliberate in recruiting, developing and retaining local talent. At the same time, they should create organisational structures that promote cross-border knowledge-sharing. Integrating local cultural and market insights into business models will help companies stay agile and relevant.

 

5. Ensure robust governance and compliance

Finally, it is vital to maintain the highest standards of governance, financial management and regulatory compliance. This means understanding local tax codes, financial reporting requirements and statutory obligations. Strong internal controls and clear board oversight are essential to mitigate risk, protect reputation and deliver sustainable returns.

 

 

A shared future

Africa’s governments and businesses alike are refocusing to attract the right mix of strategic investment and private-sector participation. For UK businesses, success will rest on genuine, long-term partnerships grounded in mutual benefit and sustainable value creation.

 

Those who act boldly, and responsibly, stand to help shape Africa’s next phase of transformation while securing their own place in one of the world’s most dynamic markets.

 

In an era where resilience and diversification are more critical than ever, Africa’s strategic potential is one UK businesses can no longer afford to ignore.

 

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Muibat Ijaiya is a Partner at Strategy Management Partners

 

Main image courtesy of iStockPhoto.com and Ketut Agus Suardika