Africa’s top 150 brands stand to lose US$60 billion from Covid-19 outbreak

Africa’s most valuable 150 brands that help drive the agenda of the economies on the continent have not been spared the brute force of the novel coronavirus. The top 150 Africa’s most valuable brands stand to lose up to 12% of brand value cumulatively, a drop of $60 billion compared to the original valuation as of 1st January 2020, the latest Brand Finance Africa report said.

Jeremy Sampson, Managing Director at Brand Finance Africa said the 150 Africa’s most valuable brands are made up largely of Telecommunications companies, Banks, and Insurance companies. These brands amass a total value of US$10.4 billion, US$ 12.5 billion and US$3.8 billion respectively. MTN leads the chart as Africa’s most valuable brand followed by Vodacom and FNB (First National Bank).

The Impact of COVID-19

Brand Finance a UK-based independent brand valuation and strategy consultancy that specializes in brand valuation and the valuation of intangible assets came up with the figure based on the assessment of the impact COVID-19 has had on enterprise value, compared to what it was on 1st January 2020.

Analyzing the impact on enterprise value, Brand Finance estimated the likely impact on brand value for each sector. The industries have been classified into three categories, which are,
• limited impact (minimal brand value loss or potential brand value growth),
• moderate impact (up to 10% brand value loss), and
• heavy impact (up to 20% brand value loss) which is based on the level of brand value loss observed for each sector in the first quarter of 2020.

In a release sighted by Ghana Talks Business, Jeremy Sampson said despite the loss, Telecommunication companies “are in a very good position to benefit from COVID,” since “people are staying at homes, they are on their computers and smartphones.”
“The areas that are losing out by a long, long way are the airlines, and tourism, and hotels.” Jeremy Sampson further said.
According to Jeremy Sampson, the continent is still heavily unbranded given that of the 150 Africa’s most valuable brand, South Africa makes up 87 of those brands.

Africa Unbranded

Declan Ahern, Valuation Director at Brand Finance said “No truly Pan-African brands exist, with even the highest-performing brands in the ranking often only operating out of their home countries and therefore finding themselves a complete unknown across the continent and globally. It is no surprise that South Africa is by far the most represented economy in the ranking, with 87 brands featuring, which account for 76% of the total brand value.”

ALSO READ: THE FASTEST GROWING AFRICAN BRANDS

“There is no denying that 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. This does pose, however, a great opportunity for African brands to develop in a market ripe for consolidation and M&A,” Jeremy Sampson also said.

Beyond Africa

According to Brand Finance Global 500 2020 league table, the value of the 500 most valuable brands in the world could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak. Amazon takes the lead and makes its history as the first brand in Brand Finance Global 500 to exceed US$200 billion in value and holds its title as the world’s most valuable brand for the third consecutive year.

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