Over the past decade or so, Africa's economic growth has been nearly three percentage points faster than that of the global economy. Over the next five years, large amounts of foreign direct investment (FDI), rapid urbanization, and a burgeoning middle class have reinforced the belief that some African countries, including Mozambique, Zambia, and Ethiopia, are growing faster than many other emerging economies. Africa has become the frontier of many companies' growth strategies.

We can see that many of the world's companies are eager to increase their "presence" in Africa to tap into the resources and opportunities. In the past, infrastructure, urbanization, accessibility, transparency and political turmoil were challenges for companies entering Africa. While these issues have improved over the past few decades, companies and investors still need to be cautious when exploring Africa.

JLL, a professional services and investment management firm in the real estate sector, recently released a report highlighting the key market factors that companies must consider when developing real estate in Africa. Of course, these factors play an important role in other areas as well and are a must-know when doing business in Africa.

01 The Middle Class And Young People Are the Main Players

Urbanization and the emerging middle class are key drivers of growth in Africa, and Africa Publications understands from the African Development Bank that at least 370 million Africans can be described as middle class, about 34% of the population. While the definition of middle class is relative, it is undeniable that this dominant demographic exists mainly in cities.

Currently, there are only seven African cities with a population of more than 5 million, while by 2030 it is expected to grow to 17. International businesses are also increasingly clustering in key cities that attract a more educated working-age population.

A noteworthy point is that this population is young and they are growing rapidly in size. Over the next 25 years, Africa's working-age population is expected to grow to 1 billion, surpassing that of China and India.

02 Foreign Direct Investment Inflows Grow

Africa accounted for 17% of total global FDI inflows in 2014, up nine percentage points from 2013. While the Asia-Pacific region still accounts for the majority of FDI inflows, Africa has been the single fastest-growing region since 2003, growing from $62.5 billion to $128 billion in 2014.

At the beginning of the twenty-first century, Africa's mining and oil and gas sectors accounted for more than 60% of FDI. By 2014, however, this had fallen to 17 per cent, with other industries later overtaking the extractive industries, most notably manufacturing.

03 Services And Manufacturing Take Advantage of the Situation

Oil and gas remains an important area for foreign investors to invest in Africa, but business services now top the list of sectors for FDI inflows, followed by manufacturing and distribution, marketing and other support industries. Retail and construction are also in the top ten, with both taking advantage of rapid urbanization and consumer spending.

04 Fintech Is the "Meat and Potatoes" Industry

With the proliferation of cell phones and mobile banking, technology wealth creation is a reality in Africa, and Nairobi is hitting the ground running in this area. In Accra, the ICT sector is strong. In Addis Ababa, new IT businesses are springing up.

Because of its strong domestic banking sector and position, Johannesburg still maintains its position as Africa's main financial center and is the city where many international banks have their regional headquarters. Casablanca, Lagos and Nairobi are strengthening their position as regional banking centers, while Port Louis is moving towards becoming an offshore banking center.

05 Choosing A Key City

Identifying a business center or hub is the first and critical step for businesses entering Africa. Many businesses and investors choose to invest in a key city and then expand to other regions. The report's city hierarchy mentions the following African cities that stand out.

Johannesburg and Cairo are arguably the most cosmopolitan and interconnected cities on the continent, with deep corporate foundations, robust financial systems and relatively well-developed commercial real estate markets. Lagos, Nairobi and Casablanca each support demand in West, East and North Africa, and more and more companies are choosing these cities for their regional or continental headquarters. Meanwhile, Gaborone and Port Louis are establishing themselves as regional centers for commodity exchanges and financial services, rising in Jones Lang LaSalle's list of "Rising Star Cities."