S’pore firms heed the roar of Africa’s fast growth and untapped consumer market

SINGAPORE - Mr Dennis Ng gets a string of questions whenever he talks about his business trips to Africa.

“At the top of most people’s list is: Are there lions around?”

Mr Ng, the founder and executive chairman of Embed Financial Group Holdings (EFGH), said he often has to deny he is there on a safari. His firm entered the African market in March 2024 to make insurance and financial technology solutions accessible to consumers there.

Mr Ng told The Straits Times that he is also asked whether Africans speak English, when it is a widely used language on the continent. “Africa is still a very distant market to many people,” he said.

EFGH is one of more than 100 Singapore companies currently operating in Africa.

Another firm of note is agribusiness group Wilmar International, owned by billionaire Kuok Khoon Hong, which has been present in Africa for more than two decades. It taps its sprawling oil palm plantations to make edible oils, soaps and detergents.

Family-run conglomerate Tolaram, meanwhile, is known in Africa for the local manufacturing of Indomie instant noodles, and the distribution of consumer goods like Kellogg’s cereals and snacks.

It also operates a large free trade zone and a deep-sea port in Nigeria, which has started to attract international shipping lines.

Trade between Singapore and Africa has grown by more than 50 per cent in recent years, from $12.1 billion in 2020 to $18.7 billion in 2024, according to Enterprise Singapore, which helps the Republic’s companies to build capabilities, innovate and internationalise.

Singapore is also one of Africa’s top 10 investors. But its presence in the continent – home to 1.4 billion people spread across 54 countries in different stages of development – is small, compared with its footprint in Asean, China or the US.

Historically, businesses venturing into Africa had to navigate political instability, regulatory hurdles and a lack of infrastructure.

Several multinational firms have also struggled because of the weakening of currencies like Nigeria’s naira, which fell to an all-time low against the US dollar in 2024. A weak currency makes the imports of materials more expensive, crimping profits.

High inflation in Nigeria has also raised the cost of essentials like food and fuel, limiting the spending power of people in the country.

But interest in Africa is growing as some nations embark on economic reforms and court international investors.

Africa also has the youngest population in the world, raising its potential for businesses scouting for a growing consumer market.

Earlier in 2025, Wilmar announced plans to boost its business in Nigeria, in a nod to steps taken by its government to revive economic growth, which have stabilised the naira.

Ghana’s President John Dramani Mahama, on a state visit to Singapore in late August, highlighted his country’s push to open its markets to foreign capital.

“We call it the 24-hour economy for a reason. Ghana is open for business 24 hours a day,” he said.

During his trip, he secured a US$200 million (S$257 million) investment from food and agribusiness giant Olam Group, which already has an established presence in Africa.

The investment will fund several projects in Ghana, including facilities to process animal feed.

Improved business landscape

The African Continental Free Trade Area, which was opened for trade in 2021, has been a game changer for companies, said Mr Venkataramani Srivathsan, chairman of the Africa business group at the Singapore Business Federation. The free trade area covers most of the African continent.

“This has created a pathway for companies to expand into Africa. They can, for instance, get into Ghana, and then look to expand into neighbouring African markets through Ghana,” he said.

A centralised system has also been set up to facilitate cross-border payments in local currencies between African markets, “demystifying the perceived risk of doing business in Africa”.

Other aspects of doing business in Africa have also improved. Intra-African connectivity has come a long way from when there were only a few flights a week, said Mr Srivathsan, who was first posted to Ghana for work in the 1990s.

Rapid urbanisation has also brought about a change in consumer behaviour. “Accra, the capital of Ghana, used to be like a big village. There were no movie theatres or shopping malls. We had to buy groceries in the market and there were only one or two of them,” Mr Srivathsan said.

“Today, when you visit Accra, you see everything that is in any other city. There has been economic development and people’s consumption patterns have changed,” he added.

Businesses have realised that Africa is a fast-growing and relatively untapped consumer market, said Mr Amit Jain, director of the NTU-SBF Centre for African Studies.

“Everyday living conditions in African cities now mirror those of Asia,” he added. “Do not be surprised to find a fashionable young African in a Nairobi cafe working on a laptop and sipping a latte. Their lives are not that different from ours.”

But he added that the movement of tens of millions of Africans from rural areas to cities every year has put a strain on infrastructure.

Ms Priyanka Jain, chief commercial officer of Valency International, said her firm has experienced traffic congestion when transporting goods to the port, especially in the heavily populated Nigeria.

“We always try to reframe any problems we may have. How can we as an organisation invest in those areas and solve problems? Foreign companies must take the first steps. We cannot expect local governments to come and help us out, when they are still resolving a lot of existential issues,” she said.

The commodity trading house has a diversified agribusiness portfolio in Africa, including products like edible nuts, grains and cocoa.

It has received millions of dollars in funding from development finance institutions, to support its work with African communities, including farmers and women.

“Africa is a land of opportunity. There are very few countries where there is so much left to do,” Ms Jain said.

What lies ahead

Large Singapore businesses in Africa are predominantly in the agribusiness and extractive industries, said Mr Jain. But they have found themselves in the company of smaller firms from the fintech, green economy and fast-moving consumer goods sectors.

Mr Jain said Africa’s substantial reserves of commodities and critical minerals used in the production of clean energy technologies, like electric vehicles and solar panels, are driving investments.

He added: “The acquisition of minerals like lithium, nickel and cobalt is seen as critical in the quest for industrialisation.

“As Singapore is the second-largest hub for trading metals, minerals and agricultural commodities, its economic ties with Africa have grown in tandem with the rise in the global demand for these commodities.”

However, Africa’s critical minerals industry is emerging as a new frontier for US-China rivalry, with both countries stepping up engagements with the market.

China is also pouring exports into Africa in the face of US tariffs, increasing competition for other foreign businesses in the continent.

In the first eight months of 2025, China exported US$141 billion worth of goods to Africa while importing US$81 billion, according to Customs data released on Sept 8. Annual Chinese exports to Africa are on track to exceed US$200 billion for the first time.

“The only realistic option left for China to compensate for a lost US market is to revive domestic consumption, and sell the excess in the international market below cost,” said Mr Jain.

“That will almost certainly spell disaster for manufacturing in the rest of the world. Climbing the industrial ladder was already getting harder. It is about to get a lot harder,” he added.

But the clean energy revolution has spurred climate technology firm Arkadiah Technology to undertake its first project in Africa. It recently signed an agreement with an African partner to restore half a million hectares of land in Ghana.

“This partnership will be a strong driver of growth for us in the next 12 to 18 months. We also recognise that our partner has networks to help us expand into other parts of Africa,” said Ms Oriana Suryo, Arkadiah’s head of business development and marketing.

EFGH, which has already built a presence in Botswana, Zimbabwe, South Africa and Nigeria, recently partnered with a firm in Ghana to offer digitalised insurance and micro-finance solutions.

Mr Ng said his company aims to operate in 26 African markets by 2026.

He added: “The solutions we are rolling out, from simple banking services to embedded insurance, are designed to serve ordinary Africans. These digitalisation efforts are genuinely helpful.

“The continent may be a new frontier, but it is a very important frontier.”

One quirk, perhaps, is that relying on official money changers may not be the best approach for visitors to Africa.

“The one thing I have learnt is to not exchange too much local currency when I arrive at the airport,” said Mr Jain.

He added: “The informal currency market in many parts of Africa is far more efficient and competitive. The exchange rate offered by an unauthorised currency trader sitting by the kerb of a road is often much better.

“In some African countries, one does not even need local currency. You can use US dollars or the euro. For all the hype around mobile money, cash is still king.”