Africa is a continent of dreams and business opportunities. With an increasing population, rising investment, and remarkable technological innovation, Africa is currently one of the world’s fastest-growing economies.
Business pioneers like GMT founder Bassim Haidar, Dangote Group’s Ailko Dangote, and Econet Group’s Strive Masiyiwa have all made a fortune by seizing the business opportunities in the merging market of Africa.
Here are the top four business opportunities the African market has to offer.
Building and construction supplies
As a developing region, the entirety of Africa suffers from poor infrastructure, including a severe lack of roads, bridges, and electricity grids. Thus, it is no wonder that Africa’s infrastructure budget has doubled in recent years, resulting in huge demand for building and construction supplies. Ambitious investors and entrepreneurs can benefit hugely from Africa’s infrastructure development by filling the gaps in supplying construction materials. Not to mention the fact that you will likely be welcomed by the local authorities and receive regulatory support.
Business people first became interested in cement, one of the most commonly used building materials. For instance, Aliko Dangote, the richest man in Africa, made huge profits investing heavily in cement. Reports indicate that Africa imports cement from overseas annually at a cost of billions of dollars. Imagine the profits local cement businesses like Dangote’s would make! In addition to cement, steel is also generating multibillion-dollar business opportunities in Africa, according to multiple reports. Also in high demand in Africa are materials such as wood, sand, glass, and electrical supplies.
Food and agribusiness
Africa has long been known for its abundant agricultural resources. Around one-fourth of sub-Saharan Africa’s GDP comes from agriculture, which employs over 60 per cent of its population. Aside from its favourable weather conditions, Sub-Saharan Africa is also home to 60% of the world’s uncultivated arable land and abundant fertile soils. The continent has the potential to become the world’s largest exporter of food products. A World Bank report estimates that Africa’s agribusiness industry will be worth $1 trillion by 2030.
However, agribusiness on the continent has yet to reach its full potential. Currently, African countries import most of their agricultural goods, including wheat. A recent report shows that Africa imports approximately 300,000 tons of chicken annually and spends over $10 billion on grains, particularly rice.
African agriculture needs significant investment and innovation in order to reach its full potential. That being said, any investor considering African agriculture must ask themselves these critical questions. In which countries should we focus our efforts? Is it better to promote large-scale farming or small-scale farming? Last but not least, what is African agriculture’s cost-competitiveness?
Internet and mobile
Over the last decade, Africa has seen one of the world’s fastest rates of new broadband connections. From 2017 to 2022, mobile data traffic in Africa increased by seven times. Currently, the continent is also the second fastest-growing mobile phone market.
An analysis shows that Africa’s internet coverage will increase by 50% in 2022, and the IT industry will be worth $180 billion. As a result, tech giants like Google and Facebook heavily invested in Africa’s large internet supply market, hoping to seize market control.
Africa is experiencing the second wave of the telecom revolution when it comes to mobile businesses. Consumers across the continent are upgrading their first phones to smartphones. Since mainstream smartphone tycoons like Apple and Samsung are producing far too expensive smartphones for the average African, the African market is eager for innovative smartphone providers offering low-priced smartphones. There are endless opportunities and potential for low-priced smartphone businesses in Africa!
Tourism and hotel
Africa is fast-emerging as a trend-setting tourist destination and has some of the most well-known tourist attractions in the world. A significant increase in the number of travellers visiting Africa is foreseeable with the rapid development of basic infrastructures like roads and airports. The local tourist industry is also one of the primary sources of national income in many African countries. As a result, a large amount of their budget goes towards attracting and supporting high-quality tourism businesses.
There is no doubt that multinational hotel chains are attracted to the African tourist industry due to its potential prosperity. Within a year, the global hotel chain The Radisson Hotel Group signed more than ten hotel deals in Africa. Additionally, boutique and personalised hotels have become increasingly popular in recent years, attracting individual hoteliers to invest in the continent.
Jovago.com is another success story in the African tourism industry. Founder Marek Zmyslowski saw an opportunity in Africa and left Poland to establish Jovago.com, an African online hotel booking company. Today, jovago.com lists over 200,000 African hotels and is one of Africa’s most popular tourism platforms.
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