A global strategy consultancy firm, A.T. Kearney, has ranked some of the top 10 countries with the highest retail growth opportunities in Africa in a new study designed to help large, organized retailers determine where and how to best enter Sub-Saharan Africa’s rapidly growing retail sector.

Rwanda, Nigeria, Namibia, Tanzania and Gabon occupy the top five places of the inaugural A.T. Kearney African Retail Development Index (ARDI), while Ghana ranks sixth due to its stable economy, while South Africa places seventh due to the developed nature of its retail market.

“The top 10 countries in the Index are diverse in terms of scale and growth potential,” A.T. Kearney partner and ARDI co-author, Mirko Warschun said in the report. “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.”

The ARDI is a useful framework for retailers because it not only identifies the markets in Africa most attractive for retail expansion today, but those that offer the most potential for the future.

Africa is brimming with opportunities, not only for local and regional players, but also for large global brands and retailers, according to the report.

South Africa Leads In Retail Expansion

South African brands and retailers have been at the forefront of African expansion but may soon see global competition coming in. For South African players to keep their competitive advantage, sound strategies and investment plans will be required.

With a billion people and growing economies, seven of the top 10 ARDI countries are among the 10 fastest growing economies in the world.

“Formal” retail, which takes place in malls, shopping centers, and other defined trade areas, remains in the early stages in most Sub-Saharan Africa countries, with the exception of South Africa, and is limited primarily to a handful of urban areas.

Low rates of formal retail coupled with increasing urbanization and the relative stability of many African economies represent massive room for retail growth.

The ARDI is based on four elements: Market Size, Market Saturation, Country Risk and Time

“Although there are many challenges, Africa has reached a point in its economic development where global retailers must evaluate the significant potential for growth in this market,” notet A.T. Kearney partner and ARDI co-author Mike Moriarty.