Africa's top ten most promising business ideas and possibilities for 2022
Africa is the world's second-largest continent (after Asia), accounting for approximately
one-fifth of the planet's total land surface area.
Continent is bordered by the Atlantic Ocean on its western and northern borders, and by
the Mediterranean Sea on its eastern and western borders.
Its southern border is formed by the mingling waters of the Atlantic and Indian seas on
its western and northern borders.
It is estimated that the overall land area of Africa is around 11,724,000 square miles
(30,365,000 square km).
Greece is claimed to have named the continent Libya, while the Romans are said to have named
it Africa, possibly derived from the Latin aprica ("sunny") or the Greek aphrike ("without
cold"), which both refer to the continent.
The word Africa, on the other hand, was primarily used to the continent's northern coast, which
was viewed as a southern extension of Europe in effect.
During their reign on the North African coast, the Romans may have given the territory south
of their settlements the name Afriga, or the Land of the Afrigs, after a Berber community
that existed south of Carthage at the time of their settlements.
Africa has an immense richness of mineral resources, including some of the world's largest
stocks of fossil fuels, metallic ores, jewels and precious metals, as well as some of the
world's most valuable gemstones and precious metals.
This richness is matched by a wide diversity of biological resources, which include the
very lush equatorial rainforests of Central Africa and the world-renowned wildlife populations
of the continent's eastern and southern regions, among other things.
Despite the fact that agriculture (mainly subsistence) continues to dominate the economies
of many African countries, the exploitation of natural resources has emerged as the most
major economic activity in the continent over the twentieth century.
Africa is currently considered to be one of the most promising investment destinations
in the world.
For individuals with a long-term perspective, there are several business ideas and investment
opportunities in Africa, and we at ThinkRich Media are pleased to present an outstanding
investment opportunity in Africa for those with a long-term perspective.
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"Why Africa?" is a question that is frequently asked.
However, the most pertinent inquiry should be "Why not Africa?"
Africa remains "undiscovered" from a global investment viewpoint, resulting in what we
believe are very low valuations for both debt and equity investments in the continent, which
provide appealing entry points, particularly when compared to valuations in many more established
countries.
Africa is witnessing a major population surge, with the continent accounting for 17 percent
of the world's population at the moment.
At present rates of growth, Africa's population is increasing by the equivalent of France's
every two years, and it is expected to double by 2050.
It is predicted to double in size again between 2050 and 2100, reaching 4.3 billion people,
or accounting for as much as 40% of the world's population, thereby increasing the available
labor pool.
African economies are diversifying, and we are witnessing the rapid growth of new sectors
such as telecommunications, consumption, and infrastructure in the continent.
In Africa, increasing electrification is taking place as the need for large power plants fed
by (in most cases) imported coal diminishes, and these large power plants are being replaced
by solar and other forms of renewable energy generation that are significantly less expensive
to implement and do not necessitate the construction of a large power grid as is required in countries
that electrified earlier in history.
Africa, in our perspective, is following Asia's development path, and the future decades will
see a significant increase in wages, a continuation of poverty reduction, and large economic advantages
for investors who get in early.
African countries, which have some of the world's fastest-growing economies, are becoming
increasingly important players in the global economy.
A young and quickly growing population, as well as rising household incomes and spending,
are expected to characterize the future.
The availability of digital and mobile services is fast expanding, the infrastructural gap
is decreasing, and Africa is poised to become a center of mass industrialization.
Additionally, the United States government has taken unprecedented steps to assist investors.
The idea of making investments throughout Africa's various and diverse countries is
far more appealing today than it was several decades ago, thanks to business climate improvements
being implemented across the continent.
The fact that conducting business in Africa continues to be associated with real and perceived
risks, despite the abundance of opportunities, is surprising.
Institutional and infrastructure hurdles, risk and reward asymmetries, and high transaction
costs can make it difficult for investors in the United States to identify opportunities
and close agreements in their home country of origin.
This is made possible by Prosper Africa, a U.S. government project to encourage increased
commerce and investment between African countries and the United States.
Prosper Africa, which draws on the resources of 17 different U.S. government organizations,
provides investors with market knowledge, deal support, funding opportunities, and solutions
for improving business climates in developing countries.
10.
The Green Revolution
The demand for green and environmentally friendly products and services is increasing at an
alarming rate around the world.
Climate change poses a significant threat to the natural environment, and as a result,
any solution that preserves the natural environment while reducing waste and pollution while encouraging
reuse and recycling has become a tremendous business opportunity.
Several African entrepreneurs and businesses are already capitalizing on this potential
and enjoying tremendous success as a result.
Solerebels, a footwear firm founded by Bethlehem Alemu in Ethiopia, has become the world's
first totally eco-friendly footwear brand.
Made from recycled waste material, this enormously successful business manufactures and sells
its footwear products to customers throughout North America, Europe, and even Japan.
Then there's thato kagtlhanye, the founder of Repurpose Schoolbags, a company that creates
environmentally friendly bags out of up-cycled plastic shopping bags.
Another example would be the Tanzanian entrepreneur Patrick Ngowi who has developed a multimillion
dollar firm only on the use of solar energy.
In addition, the production of biogas from organic waste is becoming increasingly popular
in Africa.
9.
Financial Services
Household income in Africa is increasing, which is leading to an increase in demand
for financial services such as banking, insurance, mobile payments, and loans and credit across
the region.
As a result of these demographic trends, as well as the expansion of digital and mobile
access, the prospect of mass industrialization, and the narrowing of the infrastructure gap,
businesses in the United States and Africa stand to benefit from increased investment
and new trade opportunities in a variety of high-potential sectors.
As a result, financial technology (fintech) is ready for investment in the United States.
Already, there are more than 180 million active mobile money accounts in Africa, accounting
for more than half of the worldwide total and growing at a rate five times faster than
in any other region1.
8.
Health-Care-Related Services
By 20302, it is predicted that Africa's population would account for one-fifth of the world's
total population.
Increased demand will result in increased demand for health-care infrastructure, health-care
services, as well as personal health-care items.
With rising internet access and mobile use across the continent, there is a growing demand
for traditional brick-and-mortar centers of care.
Telemedicine and digital health, on the other hand, are showing promise.
7.
Information and Communications Technology (ICT)
The expansion of internet connectivity and the increasing acceptance of technology throughout
Africa have resulted in a digital boom.
In 2018, there were over 456 million unique mobile customers in Sub-Saharan Africa (about
44 percent of the region's population, up from 20 percent in 2015), according to the
International Telecommunication Union.
3.
And as internet connectivity continues to grow, so will the need for services in a variety
of industries, including e-commerce, education, financial technology, digital health, entertainment,
cybersecurity, data analytics, and other fields of endeavor.
6.
Telehealth and telemedicine
When the COVID-19 epidemic broke out, it demonstrated just how frail Africa's healthcare systems
are.
According to the World Health Organization, despite the fact that Africa only accounts
for around 16 percent of the world's population, the continent bears 23 percent of the worldwide
illness burden.
Even worse, the prevalence of diseases such as diabetes, cancer, and cardiovascular disease
is increasing.
Africa is not just afflicted by a lack of adequate hospitals and healthcare infrastructure.
Brain drain — the exodus of thousands of highly educated medical professionals from
Africa to countries such as the United States, Canada, Europe, and the Middle East — is
a much more serious problem than the influx of medical professionals.
As a result, there is only roughly 1 doctor for every 5,000 people in Sub-Saharan Africa,
according to the World Health Organization (compared to the global average of 6).
This means that Africa must make the most of its scarce healthcare resources to the
greatest extent possible.
Therefore, telemedicine, an innovation that allows patients to receive medical treatments
remotely without having to travel to a hospital, presents huge prospects for Africa's development.
One doctor can serve many more patients thanks to the advancements in telemedicine in Africa,
allowing hospital trips to be saved for urgent cases and medical emergencies only under certain
circumstances.
5.
Infrastructure.
Africa is witnessing fast urbanization as a result of its increasing population.
By 2025, there will be 100 cities with more than one million residents, compared to Latin
America, which is anticipated to have only half as many densely populated cities by the
same year4 As a result of the increased need for infrastructure, investment opportunities
exist in telecommunications, electricity, water and sanitation, as well as transportation.
4.
Challenger Banks
Everyone's attention was drawn to the $200-million acquisition of Paystack, a Nigerian startup
that processes payments for businesses, last year, even in the midst of the COVID-19 lockdowns.
As a result of decades of dominance by traditional brick-and-mortar banks, a new generation of
young and inventive entrepreneurs is using technology in innovative ways to challenge
and transform the way financial services are delivered in Africa.
The continent's young population, increased internet and smartphone use, and a substantial
governmental push in many countries to improve financial inclusion and cashless payments
are the most significant reasons driving the rise of challenger banks and fintechs in Africa.
In addition, a large amount of investment money is flowing into these challenger banks.
Fintechs will take the lion's share of the $1.3 billion invested in African digital firms
in 2020 alone, according to a report.
Sendwave, a digital remittance service based in Kenya that serves the East and West African
markets, was acquired by WorldRemit in August of last year in a deal valued at $500 million.
JUMO, based in South Africa, raised $55 million, while Flutterwave and Kuda, based in Nigeria,
raised $35 million and $10 million, respectively, and Egypt's Paymob received $3.5 million.
As the number of challenger banks and fintechs in Africa continues to grow, new companies
in the industry are differentiating themselves by focusing on underserved niches and market
segments, which is an interesting development.
3.
Transportation in urban areas
Africans are increasingly settling in cities and metropolitan areas.
Africa is currently the world's fastest urbanizing region, and it is estimated that up to 1 billion
people could live in urban areas across the continent by 2050.
The African continent will be home to 17 cities with more than five million inhabitants by
2030, as well as 90 cities with a population of at least one million inhabitants.
Furthermore, the United Nations predicts that by 2050, there will be a total of 14 megacities
on the continent.
While large cities offer great economic prospects, they also present extremely difficult logistical
obstacles when it comes to identifying people and delivering goods and services to their
destinations.
The absence of a formal address system in many urban areas across the continent is a
good example of this.
Doing business in various parts of Africa can be quite frustrating if you don't have
precise and confirmed address information.
Identity verification, delivery of customer orders, and tracking of location data are
all difficult tasks for e-commerce startups, banks, utility companies, and a variety of
other local businesses to complete successfully.
Interestingly, one Kenyan startup has risen to the occasion and taken on the task.
OkHi, which was founded by a former Google employee, uses a combination of GPS technology,
photographs, and phone location data to identify difficult-to-reach addresses.
Since launching its service, OkHi has validated more than 300,000 addresses and has successfully
received $1.5 million in funding from investors in order to expand its service into other
countries.
Another severe logistical challenge is the transportation of goods to the last mile.
As the population of Africa's urban areas continues to grow, it is placing a significant
strain on the country's limited transportation infrastructure, making it extremely difficult
to transport goods.
Road traffic in most African big cities is currently a nightmare — and it is only expected
to worsen in the future!
Fortunately, a rising number of firms are attempting to solve the last-mile delivery
challenges in metropolitan areas across Africa by integrating technology with a network of
agents driving motorcycles, automobiles, and trucks.
Sendy, a Kenyan on-demand delivery network, has secured $20 million from a syndicate of
investors that includes Toyota and other large corporations.
Lori Systems, another logistics player in East Africa, had previously raised $30 million
from Chinese investors, according to the company's website.
As the population of Africa's urban areas continues to grow, the demand for last-mile
delivery services that are fast, convenient, and flexible will undoubtedly increase.
2.
Cybersecurity and data storage
Every year, African businesses suffer a total loss of more than $3.5 billion as a result
of cyberattacks and data breaches.
Given the potential harms and costs that can result from cybercrime, cybersecurity is quickly
becoming one of the most important developing business possibilities in Africa.
A wide range of individuals and organizations of all sizes are being targeted in this campaign.
In addition to simple email scams, large-scale theft of customer information, fraud, ransomware,
espionage, disruption of critical infrastructure, and other malicious activities are all possible
in today's world.
Every day, new threats emerge to put us all in danger.
It is estimated that up to 96 percent of cybersecurity incidents in Africa go unreported or unresolved,
indicating that cyber threats on the continent are likely to be much worse than official
statistics indicate.
More worryingly, Africa does not have enough specialists to protect itself against the
growing threats it faces.
Currently, there is a shortage of approximately 100,000 trained cybersecurity personnel across
the continent.
A surprising number of entrepreneurs across the continent are rising to the occasion and
taking on the task.
Africa's data center market is expected to reach $3 billion by 2025, according to industry
analysts, with a compound annual growth rate of 12 percent predicted to occur.
Significant advances have been made in Africa by major global cloud service providers such
as Amazon Web Services (AWS), Microsoft, and Huawei in the last five years.
Because of Africa's rapid population growth, urbanization, smartphone use, and internet
penetration, there is an increasing demand for local data storage capacity.
Demand for local data storage will continue to rise as the continent becomes more digital,
consumes more data, and adopts cloud computing as well as co-location, local caching, and
centralized networking capabilities, among other things.
1.
Food goods with a distinctive brand name
Due to the fact that there are over a billion mouths to feed in Africa, food is one of the
most lucrative business opportunities.
As a matter of fact, according to the United Nations, agribusiness on the continent could
be worth $1 trillion by 2030.
In many parts of Africa, however, there is something a little strange about the way food
is sold.
During the harvest season, the majority of food products are plentiful, fresh, and inexpensive.
Furthermore, the glut and oversupply in the market frequently result in a great deal of
waste.
However, on the shelves of many local supermarkets and international retailers in Africa's urban
areas, something quite different is taking place.
The United States, Europe, the Middle East, Asia, and South America all have a plethora
of branded food products that are imported from other parts of the world.
The question is, why does a continent that produces large amounts of food continue to
spend more than $35 billion per year on importing food that is packaged in cans or bags, bottles,
or other forms?
In spite of the fact that there are several possible explanations, one thing is clear:
Africa's agribusiness value chain is overly focused on production.
Our farmers are constantly striving to produce more and more food.
Opportunities to add value and increase profit margins by processing, packaging, branding,
and marketing locally grown foods are being overlooked as a result.
As a result, the vast majority of Africa's food products are traded as commodities.
Our farmers produce an abundance of tomatoes, but we import and stock branded tomato paste,
purees, and ketchup on supermarket shelves to compete with their products.
Initially, we export grains and cocoa beans, and then import branded breakfast cereals
and chocolate from other countries.
Currently, despite the fact that Africa has millions of farmers, there are only a handful
of local companies in the continent that process, package, and brand food products that are
competitive with international brands on supermarket shelves at the moment.
Fortunately, this large (and growing) gap in the market is attracting the attention
of astute entrepreneurs.
Because Africa has a population of over a billion people, which is rapidly urbanizing
and is expected to double in size by 2050, the tastes and preferences of the African
consumer are changing rapidly.
The quality, packaging, brand, nutritional value, shelf life, ease of preparation and
availability of food are all factors that consumers are becoming more concerned with
when purchasing food.
It will be entrepreneurs who can see beyond the production stage and add more value to
locally produced food who will be the big winners in the next decade, according to the
World Bank.
Africa has great opportunity and investing in these ideas are the best thing an investor
could do.
Let us know your thoughts in the comment section.
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