‘Socio-economic challenges, pushing Africa’s PC market to new lows’

he African personal computer (PC) market sank to new lows in the second quarter of this year amid a slowdown in GDP growth, the global IT intelligence analyst International Data Corporation (IDC) has revealed. The report said this development triggered an increase in unemployment rate, and strengthened the dollar against many of the continent’s currencies.

This seems to be the manifestation of IDC’s prediction, March this year, which said the MEA PC market will suffer an overall decline of 3.9% year on year in 2015, with a total of 17.48 million units to be shipped over the 12-month period.

It said that some country markets, including Nigeria, Egypt, Algeria and Tunisia were expected to suffer due to currency fluctuations. “At the same time, the market’s performance will be hindered by uncertainty over the outcome of general elections in both Nigeria and Turkey. And the recent rapid decline in global oil and gas prices will have an impact on almost all parts of the region, although the extent of this will vary from country to country.

Nigeria and Ghana are expected to suffer the most, with PC shipments to these countries set to shrink around 40% year on year in 2015.” The prediction added Figures released by IDC show that the market followed up its first-quarter decline of 11.8 per cent with a 26.7 per cent year-on-year downturn in shipments during the Q2 2015 season, the highest crash the market has ever suffered.

While IDC believes that the PC market will continue on its downward curve into Q3 2015, growth is expected to pick up from the last quarter of the year onward.

According to a research analyst at IDC, Sub-Saharan Africa, Joseph Hlongwane, “Kenya suffered the continent’s biggest fall of the quarter, with shipments to the country down 54.5 per cent year on year, with Ghana and Algeria following with declines of 40.9 per cent and 40.2 per cent, respectively.”

The significant decrease in PC demand seen in Kenya, he said can be attributed to sluggish economic growth brought about by falling exports and a declining production sector that is characterized by slow job creation. The poor performances of the markets in Ghana and Algeria were also traced to a slowdown in economic growth arising from severe energy constraints and unsustainable levels of domestic and external debt.

South Africa remains the biggest PC market on the continent, accounting for 35.5 per cent of total shipments, but the country followed up its 4.2 per cent year-on-year decline in Q1 2015 with a decrease of 12.8 per cent in Q2 2015. This the report indicated was largely due to continuing cannibalization of the market by smartphones and tablets as well as shrinking consumer disposable incomes due to the rising prices of necessities such as petrol and food.

South Africa’s PC market is expected to continue declining since the current economic challenges are set to remain throughout 2015. Neighboring Botswana performed better than expected to post the highest year-on-year growth rate across the whole continent. This growth follows the successful democratic elections that took place in the country in October 2014 and was driven primarily by the commercial sector, which accounted for 87.6 per cent of the total market. Botswana is expected to see ongoing year-on-year growth in the final two quarters of the year.