* Report cites Rwanda's reforms and business-friendliness
* Nigeria ranked second, but tough market to crack
By Tiisetso Motsoeneng
JOHANNESBURG, March 17 Rwanda is Africa's most
attractive market for retailers looking to expand in the
fast-growing continent, according to a report by consultancy
A.T. Kearney that hails the small east African state's economic
reforms and business-friendly agenda.
Under President Paul Kagame, Rwanda has made great leaps in
rebuilding after the 1994 genocide by building roads and making
it easy to start or register a new business.
"Rwanda has an efficient government and strong macroeconomic
indicators that reveal many opportunities for international
retailers that can offer basic packaged goods," said Marieke
Witjes, co-author of A.T. Kearney's first African Retail
Development Index, released on Monday.
The index, which will be compiled annually, ranks the 20
African countries identified as having the best potential for
Rwanda's 11.5 million people are currently served by two
Kenyan supermarket chains, both owned by unlisted retailer
Nakumatt Holdings, and a slew of informal traders.
A.T. Kearney ranked Nigeria, Africa's most populous country
and its second-biggest economy, second in the index, citing its
rapid urbanisation, youthful population and rising middle class.
But the think-tank said the west African giant was the
toughest market in the index to master due to its opaque
regulations, congestion at its ports and a lack of land on which
to build shopping malls.
"These are all the serious hurdles and roadblocks that will
require time and effort to overcome," Witjes said.
South African retailer Woolworths pulled the plug
on its Nigerian business late last year, citing high rents and
duties as well as the difficulty of marketing to consumers in
the country of 170 million people.
Other countries that made it into the top 10 included
Namibia, Ghana, Ethiopia and Tanzania.
South Africa, Africa's biggest economy and consumer market,
came in at seventh, with the report's authors saying the market
was already well-penetrated.
African growth prospects for retailers were highlighted in
2011 when U.S. giant Wal-Mart bought a majority stake in
South Africa's Massmart, giving it a foothold in several
frontier African countries.
Even though African per capita incomes are among the lowest
in the world, a decade of robust economic growth and rapid
population expansion have attracted the attention of
international retail investors.
Coupled with relative political stability, a rising middle
class, rapid urbanisation, and slower growth in Europe and South
Africa, the logic of setting up shop in Africa is not in doubt -
provided companies do their homework, the report said.
"It is essential that retailers understand where African
countries are in the evolution of the retail landscape and the
stages of market development to craft their expansion strategies
for Africa," report co-author Mirko Warschun said.
(Editing by Ed Cropley)