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March 20th, 2014

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Dansk Industri predicts in a report to be released on March 24 that Danish companies could create 7,000 more jobs and 8 billion kroner more in revenue from exports to Africa, if the companies exported as much to Africa as to other EU countries.  

Danish exports to Africa in 2013 amounted to only 9.3 billion kroner – just 1.5 percent of total exports, despite the fact that Danish exports to Africa has grown by over 30 percent in the last five years. It is also much lower than the annual average growth of 4.5 percent each year from 2000 to 2012.

DI predicts in the report that Africa could become the world leaders in economic growth over the next five years as a result of a growth in private consumption, especially by Africa’s middle class – which will account for around one third of a predicted population of two billion in 2050. This would account for a market of more than 10 trillion kroner.

Look to Ghana and Nigeria
Danish exports mainly head to the continent's richest countries: Egypt, Algeria and Morocco. However, DI pointed out that Danish companies could profit from other export markets like Nigeria and Ghana, especially in the areas of agriculture, food processing and oil and gas.

“The potential is first and foremost in food processing,” DI's Thomas Bustrup told Politiken. He pointed to the report’s predictions that the African middle class will request more and better products.

The report pointed out that Nigeria's growth rate of 100 percent since 2000 is about to overhaul South Africa as the largest African economy. Likewise, other African countries like Ghana, Sierra Leone, the Ivory Coast and Rwanda have long been under-evaluated because of old-fashioned calculation methods.

Better co-ordination and networking
DI recommends better co-ordination between foreign and developmental policy-makers and private Danish companies.

“Danish development aid should to a larger extent than today be used on projects that take into account both trade and aid and lend support to the companies. The companies can do something Danida cannot: namely create permanent jobs,” Bustrup said in a press release on March 19.

Copenhagen Cleantech Cluster, a network for cleantech businesses, told Politiken that Danish companies should work together to provide more comprehensive solutions to the African consumers. The network currently co-operates with Danish companies exporting to African countries like Senegal.