As the COVID-19 pandemic wreaks havoc on the global economy, Africa’s top 150 most valuable brands could lose up to 12 per cent of brand value cumulatively, according to the latest Brand Finance Africa 150 2020 report.
This is a drop of $60 billion compared to the original valuation date of January 1 2020
The valuation company assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on January 1 2020.
Based on this impact on enterprise value, it estimated the likely impact on brand value for each sector.
The industries have been classified into three categories limited impact ,moderate impact , and heavy impact based on the level of brand value loss observed for each sector in the first quarter of 2020.
“The African market remains immature and fragmented in comparison to its global counterparts. The lack of connectedness between nations across the continent means that brands’ growth is being stifled and they are unable to flourish beyond their home markets,” said Jeremy Sampson, Managing Director, Brand Finance Africa.
Sampson however added that this poses a great opportunity for African brands to develop in a market ripe for consolidation and M&A.
South Africa’s telco MTN was crowned as the continent’s most valuable brand, despite recording a 1 per cent brand value loss to $3.3 billion.
The third most valuable telecoms brand and 12th most valuable in the ranking is Kenya’s Safaricom with a brand value of $970 million.
There are nine insurance brands in the ranking, all of which hail from South Africa.
Old Mutual is Africa’s most valuable insurance brand with a brand value of US$1.4 billion.
Over the last year, Africa’s largest mobile operator has celebrated solid profits and impressive subscriber growth, which currently stands at over 250 million across 23 countries.
Kenya’s Senator Lager brand value on the other hand, has grown an impressive 88 per cent to $132 million, making the beer brand the fastest growing brand in this year’s ranking by some way.
Brewed by East African Breweries, the brewer has benefitted from a more stable business environment over the last year, as well as an increase in production capacity.
Sales of Senator rose by a third over the previous year, which has helped to offset some of the difficulties that both Diageo and East African Breweries are encountering as a result of higher taxes in Kenya.
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation.
According to these criteria, Vodacom (down 8 per cent to U$2.1 billion) is the strongest brand in Africa, with a Brand Strength Index (BSI) score of 89.5 out of 100 and a corresponding AAA brand strength rating.