By Trevor Matayi and Douglas Bohn, Orr & Boss Consulting Incorporated

At just over 2.5% of the global paint & coatings market, Africa makes up a small part of the value of the global paint and coatings markets, but it has a lot of growth potential. The population is growing and is young.  Also, many of the countries are resource rich which should lead to good growth. The consumption of paint & coatings across the continent is low which indicates a good runway for growth, particularly for manufacturers and distributors. 

Africa Paint & Coatings:

We estimate the total Africa paint and coatings market to be 2.0 billion liters and $5.8 billion.   The decorative portion is estimated to be 80% of the volume and 59% of the value of the market.

Egypt and South Africa are the largest two paint & coatings markets in Africa. In total, they are an estimated 44% of the value of the Arica paint and coatings market. Other countries include Nigeria, Morocco, Algeria, Kenya, and Tanzania. Combined, these seven countries represent just under 76% of the Africa paint & coatings market. The other 45 countries are estimated to be 24% of the market. Some of these other countries are developing fast and We will discuss that below.

Growth Rates:

Growth rates across Africa are generally stronger than the rest of the world. As discussed in the next section, favorable economic and demographic data should result in faster growing growth rates. The chart below shows our estimated 2025-30 CAGR growth rates. All countries except South Africa are expected to grow at above the global average. Morocco, Egypt, Kenya and Tanzania are expected to grow very rapidly. In addition to these countries, some of the countries in Africa with very small current paint and coatings market are expected to grow fast. These would include Ethiopia, Zimbabwe, the Democratic Republic of Congo (DRC), and others. These markets are currently small, but they are growing fast and should remain strong growth market for many years to come.

Economic and Demographic Factors:

The underlying factor influencing the paint and coatings growth rates in these countries is that the economies are growing at high rates. Africa as whole is one of the fastest growing regions in the world.  Only South Asia (mostly India) is growing faster.  

Some of the countries in Africa have economies that are growing even faster. Countries like Ethiopia, Uganda and Cote d’Ivoire are growing very fast as the graph below indicates.

It has been Orr & Boss experience that the paint and coatings market will grow at 1.5X or even 2X of GDP over longer periods of time in some of these countries.

Part of the reason for the strong growth is that the demographics in Africa are very favorable. The countries have expanding populations and are very young. The table shows some of the data.  Countries like Uganda, Niger, and the Democratic Republic of Congo (DRC) have populations that are growing in excess of 3% per year. The current population of Africa is 1.55 billion and the UN estimates that it will double by 2070. Virtually all of the world’s population growth in the coming decades will come from Africa.

Not only are the populations growing much faster than the rest of the world, they are also very young.  The median age is most of these countries is less than 25 and in many cases, it is less than 18. 

The growing populations will result in more paint consumption. More people will mean more needs for housing which will drive paint consumption. The relative young age of the population will also be a driver of paint consumption. Young people will start families and will eventually need housing of their own which will drive paint consumption.

The table below provides population growth estimates and median age by country for some selected countries in Africa.

The other key driver is that the building and construction market is expanding there are a number of projects that should help drive increased building and construction and thus drive increasing paint and coatings consumption. Some of these include:

• Urban redevelopment and smart city projects: There are numerous interesting projects going on in many of the countries of Africa.  Some of these include Tatu City in Kenya,  Eko Atlantic in Nigeria, Appolonia City in Ghana, and Vision City in Rwanda. 

• Transportation infrastructure and highways:  Bishoftu International Airport in Ethiopia, Lobito Railway Corridor project in Angola, Zambia, and the DRC; and the Trans Africa highway project connecting Cairo to Cape Town.
•  Power generation and transmission:  Grand Ethiopian Renaissance Dam in Ethiopia, Mphanda Nkuwa Hydroelectric Dam in Mozambique,  and Infinity Conjunta Green Hydrogen Project in Mauritania.

There are many more projects that are at various stages of completion; the above are examples.

Strategic implications for paints & coatings companies

Given the current high growth and the longer-term potential of the paint and coatings market, there are several strategic implications for paint and coatings that want to do business in Africa. The markets can be volatile so keeping a long-term perspective can be important. Given the demographics and development projects that are on-going, the projects should grow significantly going forward.  

Some other aspects to consider

• Prioritize the high growth countries;  Africa is not a single market. Each country has its own unique characteristics and understanding prioritizing the countries will be a key to entering and expanding your presence in Africa.
• The decorative paint market should be a focus for most companies since it is the largest but other segments should do well too. Auto refinish and protective are set to grow due to rising incomes and growth in oil & gas, mining, and infrastructure projects.   The wood and coil markets should also grow due to growth in building and construction.
• Since there are so many countries, it might be best to partner with local companies.
• Early engagement and taking a long-term view is critical to success.

Conclusion:

Africa has about 20% of the world’s population but only makes up just over 3% of the world’s paint volume. There is a lot of runway for growth in the Africa paint & coatings market and as such if offers some exciting opportunities. The relatively fast growing economies and populations will result in good growth in the paint coatings markets going forward. Countries like Ethiopia, Kenya, Uganda, Cote d’Ivoire and others offer excellent opportunities.