With a population of over one billion people, Africa has become the continent with the highest
investment opportunities. Investing in businesses that are both innovative and lucrative is key.
Africa is a continent with a lot of resources and investing in the right market sector using
the best resources and the best strategies and taking advantage of the huge market
will yield High Return On Investments. But there is a problem.
Coming up with a business idea and developing it into a multimillion-dollar business has
been a major problem. This is because the African market has not fully been understood.
This is one of the major reasons that has made investing slow in the continent.
But once this market is understood, investors or potential investors stand to benefit from
the huge opportunities and the chance to be billionaires especially if they are early
and efficient in their chosen business sectors. In recent years, most of the ‘new billionaires’
have been young entrepreneurs and investors who have created promising businesses and
invested in lucrative sectors of Africa’s fast-growing economies.
Everyone knows Africa is the future, that is why many foreign investors from China,
the United States, and India are coming to invest in Africa. They have
identified markets and they are succeeding. There is a wide list of businesses in Africa
that you can invest in and make so much money but our top 10 today are those that really stand out.
For decades, business opportunities in Africa were created through traditional sources but
nowadays, things have evolved and there are many other new and unconventional opportunities.
Number 1: Real estate. This is property consisting of land and the
buildings on it along with its natural resources such as crops, minerals, and more. Africa’s real
estate market is a multibillion-dollar opportunity and several new millionaires will build their
fortune in this market. In almost every corner of the continent, real estate projects are emerging.
The biggest attractions are hotel and office buildings, residential homes and apartments,
and shopping malls. The key markets for real estate on every investor’s agenda are Angola,
Nigeria, Egypt, Mozambique, South Africa, and Kenya. All of these countries are experiencing
a real estate boom like never before. Africa’s large and youthful population
and expanding middle class, increasing urbanization, the influx of multinational
companies are the key drivers of demand for both commercial and residential real estate.
Across the segment of the real estate market residential, official spaces, retail outlets,
industrial and hospitality facilities are all in limited supply thus creating an avenue for
investors and developers to tap in and benefit from these underserved needs.
Number 2: Renewable energy.
According to World Bank studies, it is estimated that in sub-Saharan Africa
only 1 in 3 people has access to electricity. Firewood and charcoal still remain the primary
source of energy for cooking endangering the continent fast depreciating forest resources.
Across the continents, companies like off-grid electricity and several others are lighting up the
continent using solar energy and water to provide low-cost electricity to households lacking them.
Solar energy is one of the most attractive businesses in Africa right now.
This is because of the significant potential for off-grid solar solutions as the demand is massive.
Over 600.000million Africans are tired of waiting for energy from a centrally managed power grid
that is inefficient and inflexible to the continent’s growing power needs.
Africans enjoy about 300 days of sunlight in many parts. This makes it hard to beat the value
proposition of a product that bypasses the central power grid and meets your energy needs by tapping
directly from the sun, a free energy source. That’s why the solar market in Africa is booming.
In Togo a solar system developer, BBOXX signed a 4million dollars partnership with the government
to supply 300,000 homes with off-grid solar kits. This is a business of the future.
Number 3: Food processing. Africa spends billions on the import
of food and non-food items yearly. Apart from traditional (local) commodities like cruder oil,
cocoa, coffee, and minerals what else of value can they export? There are a lot of local products
on the continent that have the capacity to be world brands. The problem is we often minimize
them. 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 50.000euros from
export investors. Africa has a unique chance to create strong product brands that can attract
premium prices from foreign consumers. This will lead to the creation of thousands of jobs and
small businesses will be created and supported by adding value to cocoa and coffee beans. However,
cocoa and coffee are only the beginning of much bigger ways of emerging business opportunities for
value-added food. Africa’s biggest problem is not food production but food processing and marketing.
If Africa processes more food the produce, waste will be limited and
there will be a drop in imported food. Number 4: African movies and music.
Having a population of over 1 billion people of which 60% are young people below the age of 25,
Africa presents a very fertile ground for its local film and music industry. The four
biggest business opportunities in this industry are in film and music financing, production,
distribution, and exhibition. With less than one 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 millions of dollars for stakeholders in this industry.
Number 5: Crowd farming. Across the world, farming is a big
business and most farmers are wealthy but this is still backward in Africa. Africa’s business
is expected to be worth 1 trillion dollars by 2030 according to United Nations. This estimate
isn’t impossible because Africa has a large domestic market and owns 60% of the world’s
unused arable land, has abundant labor resources, and has a favorable climate in most parts.
It is shocking to find out that Africans spend about 30billion dollars on food imports annually.
This is because most foodstuffs are produced by local farmers in rural areas.
Most poor people use local farming methods as they have little or insufficient capital.
But what if people in the city pull funds together and invest in these rural farmers and take part in
the profits at harvest time. Wouldn’t it boost production, cut down the country’s import bill,
and make more money for both the investors and farmers? This business model is called
crowd farming and it’s a trend that could likely transform the face of agric business in Africa.
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,
South Africa. As Africa’s population doubles over the next years, the business opportunities
in Africa’s agric business space are very likely to produce a league of millionaires.
Number 6: Digital healthcare. As the saying goes, health is wealth.
With the increase in health crisis especially due to the pandemic that plagued the world, 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 20.000patients. Healthcare facilities in
Africa are in a stagnant and frozen state but there is hope because entrepreneurs across
Africa are looking into these challenges. This is by creating digital and innovative
health care solutions. Some of the innovations like e-prescription and other health apps are
helping to fill up the congested health facilities from dealing with non life-threatening conditions
and focusing more on those with urgent needs. Number 7: Financial technology.
Also known as fintech, it is an economic industry composed of companies that use technology to make
financial services more efficient. This is one of the newest and fastest emerging industries
in Africa. It involves the use of technology to support and enable banking and financial service,
making it easier, faster, and cheaper. To meet Africa’s demand for financial services.
Within the continent access to financial services is very poor.
In most cases, just about 1 in 5 adults have a bank account and most transactions are still done
manually. But since the revolution of services like mobile money solutions which has transformed
financial services, several fintech products and services have erupted across the continent.
In 2019, fintech startups in Africa raised 284.6 million dollars from investors.
By using mobile phones and the internet, fintech entrepreneurs across the continent are depending
on financial inclusion and unlocking outstanding market opportunities in financial services. It
is estimated that over the next 3years, Africa’s fintech industry will grow by
at least 40billion dollars and contribute up to 150billion dollars to Africa’s GDP.
Due to this huge market potential, investors are eager to invest in Africa’s fintech company.
As the fever for fintech in Africa continues to trigger both local and foreign investors,
the industry will very likely remain one of the most lucrative businesses in Africa.
Number 8: Affordable housing:
Africa is experiencing a high rate of rural to urban migration. It is estimated that up to 50%
of the continent’s population could be living in towns and cities by 20 30.Urbanization is great
but the bigger picture is where will all these people live? And even if the government tried,
they can’t build enough homes fast enough to meet the high demand for accommodation.
In Africa’s most populated country Nigeria, the housing deficit is estimated at 20 million homes.
Africa’s housing crisis opens a lot of interesting opportunities for diverse
industries from cement production and furniture making to building contractors and mortgages.
In Kenya, entrepreneurs are converting shipping containers into amazingly creative residential
and office accommodation at half the price of contemporary housing. The same thing happened in
South Africa. These alternatives are significantly cutting down the cost of building homes,
making them affordable to the population. The biggest opportunities will evolve by providing
housing at scale and at affordable prices. Number 9: African fashion and apparel:
Africa has diverse cultures and these cultures have various apparel. The combination of these
can create world-class impact thereby boosting African fashion industries. Globally, fashion
is worth 2.5 trillion dollars but Africa currently owns just a thin percent of it.
The fashion industry globally has a very vast complex global chain that stretches from farmers
who grow cotton, silk, and other natural fibers to the production factories that spin the fibers
into textiles and that which transform the textile into apparel. With rising labor costs in countries
like China and Asia, it is forcing factories to seek alternatives in Africa where labor is cheap
Several apparel producers are already setting up shops on the continent,
for example, prime max, which is now outsourcing from Africa. Also, specialized apparel producers
like C and H garment factories in Rwanda are producing uniforms, safety vests which is exported
to the USA. However, Africa’s fashion industry is estimated by the African development bank
to be worth 15.5 billion dollars over the next 5years. This makes it a very promising business.
Number 10: Virtual education. Across Africa, there is a trend
for academic inflation. To compete for job opportunities, Africans in the labor
market are investing in higher or specialized academic decrees, diplomacy, and certification
in order to make their CVs more impressive and boost their chances of employment, promotion, and
career progression. While the demand for quality education in Africa has drastically and evolved.
The supply side remains the same as it was for more than 40 years. University campuses can no
longer match the current growth and sophistication of demand for higher education on the continent.
People want flexible options that allow them to work, learn and earn at the same time.
Africa’s higher education system is ripe for disruption and there are few entrepreneurs,
investors, and players leading the charge. The African virtual university is a trailblazer
disrupting the conventional model of higher education on the continent. In partnership
with universities within and outside Africa, the intergovernmental organization has already trained
43000 students using its platforms. The growth in the virtual education space will be one of
the most interesting business opportunities in Africa to watch in the coming years.
Finally, we have come to the end. Those were the top 10 businesses in Africa that
will make more millionaires. It is now evident that entrepreneurship holds the
key to Africa’s transformation, not global pity. Do you know of any trending business
opportunities that I didn’t mention? Let us know what you think in the comment section.