Two Rivers Mall
Two Rivers

Nairobi has the largest supply of available space in sub-Saharan Africa. The city has approximately 530,000 sqm which more than triples the supply in other top cities like Kampala (170,000 sqm), Lagos (150,000 sqm), Addis Ababa (60,000 sqm), Dakar (170,000 sqm) and Kinshasa (170,000 sqm).

According to Kearney’s Global Retail Development Index, over 90 percent of Africa’s retail remains informal, creating a vast opportunity to formalize retail markets.

Trends shaping the retail markets include the robust young population and the continent’s increasing consumer expenditure. The differences in geographies, demographics, cultures, laws and income levels mean the African retail scene is a mixed bag.

“Prosperity requires that the formal economy become an increasing part of the overall economy because in the informal economy, investment and productivity are too low. Only in the formal economy will companies and individuals make significant investments to scale a company,” Andrew Nevin, Chief Economist at PWC Nigeria told WeeTracker.

Top retail markets on the continent include South Africa, Kenya, Nigeria and Egypt. South Africa remains the most mature retail market in Africa followed by Kenya. According to the data, the top four countries in Africa now boasts of 2010 malls, 89 percent of which are in South Africa.

As per the Morgan Stanley Composite Index (MSCI), South Africa has the largest volume of retail floor space on the continent at 23.4 million sqm while the rest of sub-Saharan Africa holds just about 3 million sqm. This highlights the quantity of informal activity in the continent’s retail markets.

The variance between formal and informal markets is also made distinct by the unavailability of data in most markets outside of South Africa. Data on Kenya’s retail markets outside of the capital Nairobi for instance, remains scarce.

Kearney’s Global Retail Development Index, 2019 said Ghana is the most promising retail market in 2020 owing to the country’s political stability, urbanization, and robust economic growth forecasts.

Ghana’s economy is expected to grow by nearly 8.8 percent in 2019, backed by a thriving oil and gas sector. The country is also expected to be the fastest-growing economy globally in 2020. Urbanization will be a major driver for the country’s retail market, which is expected to reach $33.16 billion by 2024.

The report further forecast’s that emerging economies are maturing, paving way for the next wave of retail development and growth in the broader region.

Read; For Nairobi’s retailers it’s a tenants market

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