This post explains about 10 business opportunities in Africa. After reading this post you will have to understand the opportunities available in Africa which you can tap into and take as an advantage to level up your life economically.
Short Brief About business atmosphere in Africa.
The fist thing you need to know is that Africa is one or single jointed continent when it comes to doing business. With a land area of 30.37 million sq km (11.7 million sq mi) having 54 different countries.
1.5 billion people, more than 1000 social groups, and more than 3000 different languages, this proves that Africa needs different approaches and strategies when it comes to starting a business in it.
The strategies you would use to start a business in Kenya won’t be the same as strategies you would use when starting a business in Egypt or South Africa.
Things to consider when starting a business in Africa.
Here are things you must adhere to when starting a business in Africa.
- Know here you are. Understand the culture and tradition of the place, languages and even who you are doing business with.
- Get someone who knows the game (Sponsor) At any place in Africa some people are familiar with the place, well-known and respected and know how to play the game. People how can ride you and direct you well if you are new comer in the African business.
- Focus on long-term investment. No business in Africa prospered for a short period. Every great business in Africa took time to be recognized and for it to make a decent profit. This is because Africa has people who are not from the same traditionally, culturally therefore it takes them to log to accept something new. For example, Tanzania has more than 120 social groups, it is not easy for them all to accept and support your business, it’s due to cultural and tradition limitations.
10 Business Opportunities in Africa
Let now dive in to explore the business opportunity in Africa, something to Note.
This post is for education we do not provide investment advice or guarantee success, but it can be your guide to understand the nature of business in Africa and opportunity available.
1. Food Processing Business
According to statista.com Africa spent a total of 100 billion Dollars in importing food to the continent in only 2021. On their blog post wordbank.org wrote a post titled Africa imports billions in food a year Inside the post they explained that, Africa’s food import bill has more than tripled, reaching about US$35 billion a year. Much of this imported food could be produced locally, creating much needed jobs and incomes for nations’ youth and smallholder farmers.
Its true that there is a great demand of processed food in Africa by looking on the capital spent in imports. An amazing fact is most of the imported products are locally available and can be processed to feed the available market, create jobs and contributing to countries economy positively.
The opportunity is there is enough production of raw material food but but less in food processing. Take a na example of a cocoa available in Ghana, or coffee in uganda and Tanzania or cashew in tanzania, they are all nice raw materials for food processing industries.
To prove that this business pay take a look on Afrikoa Chocolate, from Tanzania, a chocolate maker producing organic sweets made of cocoa grown in Africa. Also, recently in Ghana, some entrepreneurs are turning local African products into global brands by producing organic chocolate made by cocoa In 2018, the business raised about €50,000 from export investors. Try this business opportunity you might be amazed by its impact.
2. Farming and Agribusiness
Africa has a total of 1,162 million hectares of arable land which is approximately 60% of the world’s arable land. Meaning agriculture in Africa has a right chance to thrive and pay more compared ot other continents.
Unfortunately, the sector the sector is still down. Despite, better climatic condition, the presence of labours supported by the available population, increased demand for food, food production in Africa is still down compared to other continents like Europe. Food produced in Africa can not even feed the demand available. That is why africa spend more that 35 billions every year for food importation.
Coming up with a innovative way to and better way to do it, can pay you more that you expect. For example, in Nigeria, 2 crowd farming platforms exist which enable working class Nigerians to crowd sponsor farming projects and earn returns at harvest time.
The same thing is common in Somalia and South Africa. As Africa’s population doubles over the next years, the business opportunities in Africa’s agribusiness space are very likely to produce a league of millionaires.
Some Challanges are like facing Africans
- Lack of infrastructure
- Access to finance, and outdated farming technique
Related Post: 25 Cool, Easy, and Best Small Business Ideas In Africa
3. Real Estate
Another business opportunity which can be done in Africa is Real Estate. Reas estate business holding property consisting of land and the buildings. It involve renting, salling, property management, financing, insurance of the property.
Recently in Africa, in every corner of the continent, real estate projects are emerging. Some of the fast emerging real estate properties are like hotels and office buildings, residential homes and apartments, and shopping malls.
Some of the African country you can start this business and enjoy its rewards are like Angola, Nigeria, Egypt, Mozambique, South Africa, Tanzania and Kenya. All of these countries i recent years are experiencing a real estate boom like never before.
Some of the opportunity if this business in africa are like
- Africa’s large and youthful population
- Expanding middle class which are great market
- Increasing urbanization
- The influx of vistors from other continents
- Foreign investment and trade
4. Renewable Energy
According to world bank more that 600 million Africans lack electricity. As electricity a stimulator of development but it’s accessibility is still hard in Africa. As its known that electricity is the bedrock of development, there is a great demand for energies in Africa.
Most of families in Africa depend on firewoods, charcoal, as their source of energy for different uses like cooking. It is well known that Africa is rich in renewable energy resources. The resources available are such as solar, wind, and hydropower. But its utilization is still ow compared to its demand.
Therefore, the demand for energy present a market for renewable energy projects. So, investing in solar farms, wind turbines, and hydroelectric plants can provide clean energy, and reduce overdependence on woods and charcoal. The market for energy is clearly open, and wide, you don’t need to research but hitting in and starting saving Africans.
5. Fintech Technology and Technology Itself
The technology sector in Africa is experiencing rapid growth, driven by increased internet penetration and mobile phone usage. According to the world bank development report, Africa has more than 650 million of people who uses mobile phone daily. This means there are different technological opportunity to be established due to the assurance of the market.
Some tech opportunities that exist in Africa exist in areas such as e-commerce, fintech, mobile payments, and software development.
Take example in Fintech, 1 out of 5 Africans owns a bank account and within 1 don’t even use it for daily transaction and payment. There is enough africans who don’t have access to financial service service, Therefore by investing in fintech can be a blessing to enough Africans who are thirsty of access to financial service, fast and cheep transaction.
6. African Movies and Music
This opportunity has been taken by more than 1 million people of which 60% are young people below the age of 25. With this data Africa presents a very fertile ground for it’s local film and music industry. Its a wide ground for investors.
The biggest business opportunity in this opportunities are
- Film and music financing
- Music and film production and destribution
- Film exhibitiona and streaming
With less than 1 cinema per 1 million people, Africa is the most understaffed cinema market in the world. When it comes to music, the growing fame of African music in the Western world is generating 1 million of dollars for stakeholders in this industry. Therefore this is among nice business opportunity you can start in Africa.
7. Healthcare
In fact, some countries in Africa faces significant healthcare challenges such as high infant mortality rates, limited access to quality healthcare, and the spread of infectious diseases.
Therefore, there is a need for medical personnel globally especially in Africa as it is noted for low standards of living. In countries like Ethiopia, it is 1 doctor for over 20,000 patients. Healthcare facilities in Africa are in a stagnant and frozen state but there is hope, because entrepreneurs across Africa are looking into these challenges.
There is a pressing need for investment in healthcare infrastructure, medical equipment, and human resources. Opportunities exist in areas such as hospitals, clinics, pharmaceutical manufacturing, and telemedicine. Also, in creating digital and innovative health care solutions like electronic prescribing and other health apps to solve various challenges in health industry.
8. Education
Education is a key driver of economic development, and its a believed way to overcome poverty in Africa. Being a great emphasize of development education is greatly demanded in Africa.
The demand for quality education continues to increase daily because governments in Africa are unable to meet the demand for quality education.
Africa is investing heavily in education infrastructure and human capital development. Also, governments in africa allow and create nice environment for investors to invest in education to serve a increased demand for quality education.
Opportunities that exists education sector in africa are like, starting private schools, vocational training, and online education platforms and collages and universities and. Investing in education in Africa has multiple benefits and is encouraged by governments all over the continent. Because it can help improve literacy rates, create a skilled workforce, and foster innovation and development.
9. Tourism Business
Africa is a popular tourist destination, with a diverse range of natural and cultural attractions. The tourism industry has continued to contribute significantly to economic growth and job creation.
Despite its significant, the sector hans greatly invested to the maximum of giving high revenue. Tourism sector in Africa invite investor to stimulate it. African government have agendas to increase revenue from tourism sector therefore investor are encouraged in order to contribute to their goals.
Some opportunities you can invest in this sector are like hotels, tour camps, lodges, becoming tour operators, tourist transportation business business and ecotourism.
10. Mining
Africa is a powerhouse in terms of mineral resources; this in itself makes it one of the most sure centers for mining investment. However, the investment in African mining is far from being a thing which can be made without its due consideration. Investors can take part in the mining sector employing the following ways:
- Direct investment, thi means directly investing into the mining companies of Africa, either by way of shares or equity. Investors can do research regarding companies working on promising projects with strong management teams and a history of successful operations. For instance, investors might look into gold mining companies in South Africa and Tanzania or copper mining companies in Zambia.
- Indirect investment involves mining funds or ETFs. Such funds are indirect investments that may have a broad exposure to the African mining sector but will not require an investor to take an ownership interest in individual mining firms. Investors can invest in a fund that either has specific commodity-based investments or special regional focuses. Examples include those focused on precious metals, base metals, or mining exploration in West Africa.
