Africa's Top Product Imports and Origins

February 2024

Researched by

Overview

Africa, often referred to as the next frontier of global trade, has shown tremendous growth in economic activities since the beginning of this century. It is a continent teeming with promise and ripe for import-related investment, with more foreign investors tapping into boundless trade business opportunities. Africa's economic landscape is undergoing a remarkable transformation, from a rapidly expanding consumer base fueled by a burgeoning middle class in the process of urbanization, to a youthful demographic dividend that is more educated to leverage modern technology knowledge with global and avant-garde mindsets.

Historical challenges of Africa are relieving thanks to years of international humanitarian funding and external resources for basic urban development. A wide array of economic sectors are starting to emerge, from construction to agribusiness, renewable energy, and beyond, with more and more locals entering the entrepreneurship game. The result is not simply about measuring the number of new jobs created, but instead illuminating a more diverse and vibrant society where everyday people could enjoy quality food commodities, access to medical services, and increased mobility across countries for travel and logistics.

Many unparalleled opportunities are still yet to be discovered by foreigners who have experiences and knowledge in product trade previously outside of Africa. The continuous increased import trade volume in Africa, reflecting the continent's evolving economic landscape and consumer preferences. Infrastructure development and Internet facilities have created a new wave of consumer purchases in electronics, consumer packaged goods, and textile products. Governments are also seizing ample chances to upgrade their transportation and healthcare systems with imported materials. Clear enough, Africa offers a myriad of prospects for foreign import businesses seeking to establish a foothold on this fertile ground to capitalize on the vast potential that this dynamic continent has to offer.

Growth

The population growth outpaced the foundational development progress of Africa. There have been joint forces from external philanthropic and impact-first capital focused on interventions at the farmer level to increase productivity of agriculture. Many supply chain facilities are still yet to be established to ship the upstream produce to consumers' hands. To cater the growing demand, African countries plugged the gaps through importing around 85% food commodities from outside the continent.

Driven by economic growth, urbanization, and demographic shifts, some new categories of consumer products are attracting foreign importers. Consumer electronics under the emerging tech-driven lifestyle, automotive cars because of more paved roads, higher purchasing power of FMCGs and apparel due to the increase of disposable income, these all signify the trend of younger population's demand on items that are not produced domestically. Africa's consumer expenditure is projected to reach USD 2.5 trillion by 2030.

The dynamic nature of Africa's consumer market made more foreign import players realize the lucrative opportunities. The “big four” markets of Africa - South Africa, Egypt, Nigeria, and Kenya, are the biggest importer countries among the skyrocketing USD 35 billion import volume in 2021 in Africa. Importers' associated businesses started to operate beyond importing finished goods from the origins, instead setting up local facilities to handle intermediate products. The initial thoughts of transportation cost reduction has also led to new job opportunities, environmental sustainability promotion, and more importantly higher foreign direct investment amounts that encourage governments to propose new policies to further strengthen local economies and more efficient transportation facilities.

Among all the sectors, automotive, agro-processing, pharmaceuticals, and logistics have gained massive interest from external importers. Following the trade data, these sectors are also on the upward trend, accelerating urbanization with more goods and services that make mobility more accessible, make everyday life healthier.

The trade relationship of Africa has shifted from the European Union countries like France to China since 2000, with 20% of its economic growth being contributed from this new alliance. Africa mostly exports natural resources, and imports consumer and intermediate goods, with reasons briefly covered above.

Top list

Top product imports, by country in Africa:

World's biggest importers, from Africa:

Product imports per capita, by country in Africa:

Top product import origins, by country in Africa:

Opportunities

Based on the expansive population pyramid, investors could quickly realize investing in Africa offers early access to the fastest growing continent with immense potential. By tapping into Africa's import industry, investors can position themselves to capitalize the rising demand for goods and services both domestically and internationally.

Increase of purchasing power:

The expanding consumer market is obvious with more youth entering the middle class, who prefer to pursue more sophisticated and demanding higher-quality imported brands and goods. A wide array of consumers are on the rise as more African people are seeking convenience and variety of products through both offline and online shipping of packaged foods and beverages, household items, and personal care products.

Made in Africa:

The import demand has been decreasing for raw materials over the last 10 years, due to the abundant natural resources. Instead, the import volume of capital goods, consumer goods, and intermediate goods are climbing. More industrialization efforts are being implemented domestically to enhance the supply chain with more advanced production facilities, along with the adoption of sophisticated digital trade systems. Imported goods are also transformed into more value-added intermediates and end products, which are being traded to serve sectors like automotives and transportation, as well as to meet the consumer needs in areas such as foodstuffs and apparel products.

Collaborative trade initiatives:

Initiatives like the African Continental Free Trade Area (AfCFTA) attempts to harmonize trade regulations and facilitate cross-border trade of goods. The COMESA-EAC-SADC tripartite free trade area is also accelerating economic integration across African countries. More trans-Africa transport corridors and ports are activated to boost trade. With more governments offering friendlier custom tariff strategies, more raw and processed goods could be imported and moved freely across the continent which benefits supply chain operators, investors, business owners, and governments themselves.

Construction and engineering projects:

Urbanization has a proven solution to increase living standards, employment opportunities, as well as positive externalities and economies of scale. Africa has undergone massive infrastructure development which attracted not only human capital and knowledge, but also importing machinery and electrical equipment, chemical products, and transportation facilities to smoothen the transaction of import items for the big-scale engineering projects.

Renewables on the rise:

The success of the energy transition in South Africa and Egypt, has motivated more countries to open up fast track policies to partner with external resource providers and skilled workers to explore renewable alternatives. The abundance of natural sunlight and wind have attracted the development of solar energy and wind power engineering projects, with foreign investments, human capital, and imported materials; other approaches like hydro, bioenergy, and even geothermal, are gaining interest.

Sector highlight

Intra-regional trade of vegetable and animal products have shown significant growth across Africa countries. China, has rich agricultural productivity outputs particularly in rice and wheat, becoming a favorable importer partner for food sustainability. Textile and electronic products are also under the umbrella of the import list from this manufacturing giant.

China is not the only country that contributes to Africa's economies. Besides the United States and EU who have been strong partners, other African countries and India have increased merchandise and industrial imports. Middle East countries such as UAE and Turkey are also on the top list of importers in recent years.

The growing sectors that are worth mentioning are automotive, agriculture and agro-processing, pharmaceuticals, and transport and logistics, which are transforming the economies of Africa in all possible dimensions.

Automotive:

The demand for automobiles has skyrocketed and will keep increasing due to rapid urbanization. Over half of the current automotive supply is from outside the continent, including used commercial vehicles and motor cars. Production is already growing, in places like Morocco and South Africa, in parallel, more foreign leading automotive companies are injecting resources to support domestics operations.

Agriculture and agro-processing:

Productivity levels have been a core issue to tackle as most of the local produce are from smallholder farmers. To meet the growing consumer demand, and to greatly improve value-added agricultural intermediates, import opportunities exist for machinery and technology, irrigation systems, fertilizers and seeds, and other crop protection and security facilities.

Pharmaceuticals:

Packaged medicaments demand has not slowed down after the pandemic. Effective regulatory systems and harmonization is being promoted by the African Union and its intra-trade networks to overcome small fragmented markets, enabling more local production with stronger procurement and delivery capabilities.

Transport and logistics:

A majority of the intra-Africa trade happens through land transportation, apart from the air and maritime transport from external importers. More investments are seen in building more robust train and highway infrastructure led by governments, as well as road construction that will increase the efficiency of land transport in fragmented destinations in sub-urban and rural areas.

Africa is gaining more attention from foreign investors and international importers. From mammoth investment in renewable tech and industrial facilities, to rapid development of internet connectivity infrastructure, the continent is pivoting to a modern lifestyle where consumers will be benefited from richer resources to improve their living standards. Beyond the highlighted sectors and trends mentioned above, there are more untapped import and business opportunities yet to be explored, where foreign investors can capitalize while contributing to Africa's development.

Sources: WTO, UNCTAD, WITS, ICDT, IFC, ITC, IMF, Word Bank, WEF, OEC, BACI (2021), AfCFTA, and many more governments' and NGO materials, etc.