Telecoms, Power & Transport Infrastructure Investments Highlight Bright Spots for Economic Diversification in Sub-Saharan Afr...
May 11 2016 - 1:06AM
Business Wire
Telecoms has strong foundation for growth in East Africa; More
than 600,000 people to migrate to key urban areas in Kenya’s Rift
Valley
At the World Economic Forum on Africa, IHS Inc. (NYSE: IHS), the
leading global source of critical information and insight,
announced new analysis on bright spots for economic diversification
in sub-Saharan Africa.
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IHS Country Risk population forecast for
co-location at tower sites in Kitale and Eldoret, Kenya (Graphic:
Business Wire)
“The commodity super cycle may have ended, but there are
certainly bright spots for investors across sub-Saharan Africa,”
said Natznet Tesfay, director of sub-Saharan Africa analysis at IHS
Economics and Country Risk.
Economic diversification and technology’s role as a growth
engine are the focus areas for the 2016 World Economic Forum (WEF)
on Africa. “There is a lot of buzz at this year’s WEF around how
countries can take advantage of new technologies to grow and
diversify their economy,” Tesfay said. “Many African countries aim
to transform through the development of manufacturing and service
hubs, but have had mixed success in first building reliable
critical infrastructure. Still, there are opportunities for
investors across the region in key growth industries such as power,
including off-grid renewables, transport and logistics, ICT and
light manufacturing, as countries look to secure long-term,
resilient growth.”
President Kagame of Rwanda, whose country is hosting this year's
WEF on Africa, previously highlighted the importance in taking
these first, critical steps for transformation at IHS CERAWeek in
February. According to IHS analysis, Cote d’Ivoire, Tanzania,
Kenya, Ethiopia and Rwanda are leading the pack with commitment to
laying foundational infrastructure to underpin key growth
industries. “Governments with a clear path for investment are
already seeing the fruits of their labor,” Tesfay said. “We see
growth of above 6 percent in these countries and we are forecasting
growth rates above 4 percent forecast for Tanzania, Kenya and
Uganda for the next 10 years.”
Telecommunications - leading source of capital expenditure in
East Africa
In a new report, IHS assesses that the telecommunications sector
is likely to emerge as a leading source of capital expenditure for
East Africa.
According to the report, Tanzania presents mobile network
operators with a favorable operating environment due to competitive
licensing agreements. In Uganda, the recent rollout of a regulatory
framework for mobile and agency banking services provides new
opportunities. The Kenyan government's commitment to encourage
growth in the telecoms sector is set to improve competition and
inter-operability among existing mobile network operators and to
stimulate mobile virtual network operator activity.
Growing demand: more than 600,000 to migrate to key urban
areas in Kenya’s Rift Valley
At the moment, Kenya's telecoms infrastructure is largely
concentrated in the southeast and west of the country. However, new
infrastructure projects have the potential to drive more than half
a million people to emerging areas of economic activity in Kenya’s
north-west, particularly in Lake Turkana region with consumer
spending on mobile handsets and calling plans expected to increase
as a result.
By forecasting population change and analyzing population
demographics, IHS identified three potential tower locations within
the Rift Valley Province likely to benefit from the largest net
increase in population.
“Our modeling capabilities are unique and show some optimistic
results for an economic growth area in Kenya,” Tesfay said. “IHS
analysis emphasizes the point that there are growth opportunities
across the region for companies looking to invest.”
The towns of Lokichar, Kitale, and Eldoret are likely to
experience rapid population expansion over the next five years,
roughly 35 percent (64,000 people), 11 percent (357,550 people) and
12 percent (221,690 people) respectively. Refurbishment and
expansion of the Lokichar–Kitale–Eldoret highway (A1) into
neighboring South Sudan increases opportunities for wholesale and
retail trade, while the UK-owned Tullow Oil's concession close to
Lokichar slated to start oil production by 2020.
“These projects would create new centers of economic activity
and employment opportunities,” Tesfay said. “This example
highlights how companies might miss faster growth and attractive
opportunities in medium-sized cities if they only focus on the
traditional, major cities.”
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of insight, analytics and
expertise in critical areas that shape today’s business landscape.
Businesses and governments in more than 140 countries around the
globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has
been in business since 1959 and became a publicly traded company on
the New York Stock Exchange in 2005. Headquartered in Englewood,
Colorado, USA, IHS is committed to sustainable, profitable growth
and employs nearly 9,000 people in 33 countries around the
world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2016
IHS Inc. All rights reserved.
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version on businesswire.com: http://www.businesswire.com/news/home/20160510007079/en/
IHS Inc.Amanda Russo, +44 208 276
4727Amanda.Russo@ihs.comorPaul Fox, +44 203 159
3576Paul.Fox@ihs.comorPress Team, +1 303-305-8021press@ihs.com
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