Africa represents a large and growing opportunity for fast-moving consumer goods companies and retailers. In 2008, the combined GDP of African countries was nearly $1.5 trillion—larger than that of either India or Brazil. Africa’s real compound GDP growth, about 5 percent annually between 2002 and 2009, was on par with Russia’s and significantly higher than those of developed countries.

To gain a better understanding of the opportunities Africa presents, we examined its real and anticipated economic growth. We forecast total growth in compound annual GDP per capita of 4.5 percent until 2015, which will boost consumer spending by more than 35 percent. With population growth of 2 percent and continued urbanization, we estimate that 221 million basic-needs consumers will enter the African market by 2015. As a result, the total number of nations with more than ten million consumers and with gross national income exceeding $10 billion a year will increase to 30, from 22 today.

This rapid growth creates an opportunity for suppliers and retailers of fast-moving consumer goods. Using historical category-growth data and knowledge of local markets, we developed what we call the “growth compass” to prioritize product categories by opportunity and to select the appropriate market entry or investment strategy given market conditions and a company’s capabilities. In a diverse, fast-growing region that remains opaque to many companies, this approach provides a roadmap for establishing a presence.