Trade & events will make Africa fly
28/11/2023
# tags: Events , Africa , Tourism , Business Tourism
By 2030, Africa will be home to 1.7 billion people and will have a combined business and consumer spending reaching over 6.7 trillion USD, making it the continent of the future.
It is also expected that by 2035, intra-African exports will be up by 109% and international export by 32%. The African Continental Free Trade Area (AfCFTA) will boost this development by creating a single market, increasing international and intra-Africa trade. It is, therefore, anticipated that organized events will play a crucial role in this transformation, providing the platforms for stakeholders to connect, learn and share and by doing so stimulate trade, collaboration and innovation.
As outlined in a recently published World Economic Forum (WEF) report, AfCFTA indeed offers the potential for a new era for global business and investment in Africa. While the figures above are already impressive, the projections for 2050 are simply breathtaking: a population of 2.5 billion people and a total spending of 16.12 trillion USD.
The increase in trade and the related industrialization will result in increased manufacturing, which in turn will lead to high-skill job creation, bringing better educational training and the development and retention of local talent. This will also lead to thriving local businesses that can partner with global leaders to the benefit of African and international companies alike.
If these projections become reality, they will of course also have a massive impact on the African event industry, both in terms of number of events and business visitors, considering that currently, Africa only accounts for 3% of the global MICE industry and just 1% business travel spending worldwide. Just as an illustration to demonstrate the potential: in 2019, France – ranked 5th in terms of expenditure of business tourists of the G20 countries – welcomed 76.8 million business visitors, with half of them participating in one of the 595 corporate and institutional events taking place in the country and spending a whopping 32 billion USD. As a comparison: in that same year, business travelers in Africa spent USD 43 billion with South-Africa leading at 8 billion USD.
Looking at these figures, it is also important to know that the vast majority of the business travelers going to France originate from its key trade partners such as the UK, Germany or Spain. Furthermore, there appears to be a positive correlation between tourism and MICE, given leading destinations are also leading hosts of business events. So if the intra-Africa trade grows as predicted (109% by 2035!), the need for organized events such as conferences and exhibitions will grow dramatically, as these are the platforms eminently used to bring people together to discuss trade, collaboration and innovation between trading countries. It also means that the target audiences are not the long-haul business travelers from Europe or the US, but rather the African business traveler coming from one of the 54 African countries who are signatories to the AfCFTA.
Indeed, a study entitled ‘Tourism and Trade Nexus in Africa: A Gravity Model Approach’ revealed that boosting tourism in the continent will lead to an increase in trade. Turning this vision of a booming number of business events into reality will, however, require tackling a number of hurdles. The first set of challenges is related to intra-Africa air connectivity. The region’s air transport infrastructure – defined by a weak domestic airline industry and a lack of airport density – greatly undermines the ability of local economies to facilitate business travel, which is already hampered by the vast size and geographical barriers of Africa. This is now being addressed: according to the CAPA Airport Construction Database, there are 37 new airport projects under construction or planned in Africa, with an estimated value of $16.6bn.
A second set of challenges is related to energy and infrastructure. As Africa’s overall development continues, the long-term hope is that infrastructure spend and construction related to energy, transport, airports, ICT infrastructure and health facilities will be key spurs for economic growth. The short-term reality is, however, that workarounds need to be found (e.g. the use of diesel generators by convention centres to produce electricity).
Thirdly, there are the conference and exhibitions centres hosting business events which are as varied as the continent’s unique historical, cultural and natural experiences and will serve as platforms for Africa’s economic potential to be fully realized. Here, the challenge is double: ensuring the delivery of excellence, and obtaining the international recognition that this excellence is being delivered. Both are work in progress, with new centres being built – like the one in Abidjan, Cote d’Ivoire – existing centres being revamped and an increasing number of African convention centres becoming part of the global community of convention centres through initiatives such as AIPC, allowing to exchange best practices and obtaining a globally recognized quality label.
Evidently, therefore, Africa is the continent of the future and that boosting organized business events will play a crucial role in this journey. The African Continental Free Trade Area has provided the continent with wings, and it is time now for to soar.
Dr. Geoffrey Manyara (United Nations Economic Commission for Africa – Economic Affairs Officer at the Subregional Office for East Africa)
Taubie Motlhabane (CEO Cape Town ICC and AIPC Board Member)
Sven Bossu (CEO AIPC)
