Five Business Opportunities That Could Prove To Be A Gold Mine In Africa
Africa’s potential as a repository of immense human and natural resources is undeniable. If anything, it remains largely underutilized and untapped. The continent’s tech landscape has witnessed something of a rapid proliferation of innovation-driven startups in recent times, and while this development can be considered to have gone some way towards alleviating some of the more worrying social and economic problems that have bedeviled the continent since time immemorial, ample opportunities for development and improvement still abound.
The growing startup and entrepreneurial activity in parts of Africa have undoubtedly brought good tidings with it. Motivational and inspiring stories of remarkable entrepreneurial journeys have become almost commonplace lately. Tales of individuals who have dug in deep and battled numerous challenges on the road to building thriving businesses out of a need to solve some societal and economic challenges are somewhat rife on the continent. But it will be a terrible misjudgment to conclude that all there is to be done has been taken care of because a lot yet remains undone.
Examining various sectors and spheres will reveal that there still exists a tremendous market opportunity in the form of gaps to fill, voids and chasms to be bridged, and needs to be met. At best, we might only be getting started. It is not entirely out of place to assert that Africa still holds a lot of promise concerning business and the problem lies in the fact that we are yet to harness its potential fully.
Africa is home to some profitable ventures and lucrative business opportunities. The trick, however, lies in unearthing those diamonds-in-the-rough and figuring out where to channel efforts. This piece is not really about helping you put your money where your mouth is; it is mostly aimed at making sure your mouth is at the right place in the first place. The impact of a successful indigenous enterprise has the capacity to not only make successful entrepreneurs but also improve the lives of a large number of individuals – and this can be extrapolated to imply continent-wide socio-economic empowerment and growth which could be considered something of the Holy Grail in these quarters.
As the saying goes; “Gold is more likely to be found where it has been seen before.” Following from that, it can be construed that the business opportunities laid out in this piece are taking a cue from some of those that are known to have proven hugely successful for a number of African entrepreneurs. And now, let’s dive right into them!
Food & Agribusiness
Africa’s food and agricultural industry remain one of the most important owing to the idea that it if its potentials are fully harnessed, it has the capacity to impact the lives of people from both the top-ends and the grassroots – and work wonders on bottom lines too.
There are literally over a billion mouths to feed on the continent, and this singular fact makes the continent a multi-billion dollar opportunity for entrepreneurs who can see beyond the mire and muck which forms the bulk of Africa’s current agricultural mechanisms and framework.
Producing food and getting people fed may come across as routine but it is a vast business opportunity — one that has gone largely unexplored. Various countries on the continent are known importers of agricultural commodities, spending millions of dollars on all kinds of raw and semi-processed agro products, as well as staples and other essential food commodities. And the idea that some of these countries actually have an enormous capacity to produce these in their own backyards makes the situation all the more ambiguous and baffling.
The opportunities that are in the offing with Africa’s food and agribusiness cuts across several products across the value chain. It holds a lot of promise and remains yet untapped. By exploring the full potential of Africa’s agricultural sector, we might just come upon an actual cash cow, and dividends are sure to be reaped for milking it for all it has got.
Two Nigerian startups; FarmCrowdy and ThriveAgric, appear to be making significant strides in this regard with their business models designed around what is now known as ‘crowdfarming” — which is necessarily a model that allows working-class individuals to crowd-sponsor farming projects and reap a share of the returns come harvest time. As covered in an earlier publication on WeeTracker, the former has even raised USD 1 Mn in seed funding for the expansion of its operations from US-based investors.
Somalia’s Ari.Farm is also claiming its own market share as an online marketplace and crowd farming platform which makes it possible for investors from around the world to profit from the Somali livestock market.
It is a similar story from South Africa, where Livestock Wealth is helping investors own pregnant cows while keeping tabs on them by means of a mobile app. The calves born are subsequently sold to feedlots or slaughterhouses upon clocking seven months, and the investor pockets the returns for the beef.
The African population is expected to double over the next 30 years, and as such, the business opportunities in Africa‘s agribusiness space are very likely to produce a league of entrepreneurs who will derive satisfaction and fulfillment in the knowledge that they amassed their fortune while dragging thousands of farmers, families, and communities out of poverty.
Retail
Much like the aforementioned business opportunity, this one also has a lot to offer. Africa’s retail market serves up an ample opportunity not only because of the significant population advantage but also due to what is fast becoming a trend in various parts of Africa that is characterized by rapid urbanization, growing economies, and a rising middle class.
Africa’s retail market is seeing some major changes and witnessing something of a revolution. The posture has somewhat shifted from informal trading in open markets, and the scales have tipped slightly in favor of organized retail in shopping malls and online stores. This, perhaps, is the reason eCommerce is on the rise in parts of the continent.
Names like Game, Shoprite, Nakumatt, Woolworths, are amongst homegrown brands that are disrupting markets and even causing ripples on the global scene. The eCommerce sector has also seen a lot of activity in recent times, with the likes of Jumia rising rapidly in the world of online retail business and accruing a value that is believed to be around USD 500 Mn, as well as boasting presence in such African countries as Nigeria, Egypt, and Cote d’Ivoire.
However, it does pique interest that in spite of what appears to be a boom in the African online retail market, it still accounts for a rather small fraction of the continent’s entire retail market industry, and this is a tip entrepreneur might want to make the most of. In any case, the narrative does indicate that there is a huge slice of pie still left untouched in this sector and it could really use a helping.
Financial Services
As is often the case with parts of the developing world, there is still a lot left to be desired in the banking, payment systems, and overall financial services industry in Africa. In spite of the progress already made, the continent’s financial sector could use more developments, and this represents another genuine business opportunity.
A significant proportion of Africans are still excluded from formal financial services, a staggering number of transactions are still traditionally fuelled by cash, and this has informed the clamor for financial inclusion in recent times.
Thus, Africa can be considered uniquely-poised as it affords a veritable market opportunity for revenue to be accrued by entrepreneurs who can think up and design simple, easy-to-use, and convenient financial solutions.
Green Technology And Waste
Throughout the world, there appears to be renewed interest in green and eco-friendly technologies that can serve to bring about cleaner, greener, and more efficient ways of getting things done. With the debate over climate change and the impact of man-made technologies on the natural ecosystem ringing louder volumes, there is a sort of receptive atmosphere for technological solutions that have the capacity to solve societal challenges while preserving the natural environment. Suffice it to say that a premium is now placed on technologies that reduce waste pollution while also promoting reuse and recycling of materials to create valuable products.
A number of African entrepreneurs and startups are already making significant headway on this font with such names Nigeria’s RecyclePoints, Tanzania’s Solerebels, South Africa’s Repurpose Schoolbags popping up in conversations. The Tanzanian startup, in particular, has grown to be remarkably successful as one of the world’s truly eco-friendly footwear brand — making footwear from recycled waste material and even making waves in far Asia, North America, and Europe.
Another valid case in point from Tanzania is Patrick Ngowi; an entrepreneur who is believed to have built a multi-billion dollar business from solar power generation. The production of biogas from organic waste also presents another promising aspect that is worthy of exploration. With these in mind, it does make sense that pursuing developments in green technology might just be the way forward.
Internet & Tech
The African internet and tech scene can be thought to be abuzz with activities. In recent times, tech hubs and incubators are known to have been springing up in their numbers from virtually every part of the continent. Between Accra, Lagos, Johannesburg, Nairobi, and Cairo, we might have just put together something that could pass for the “Silicon Valley of Africa.” The level of innovation streaming out from these tech hubs can be considered a testament to the fact that there is some fine work being done here in Africa, and there is more to come.
The amount of progress being made on the African internet and tech scene is evident in the number of acquisitions already recorded and funding deals closed, with the well-documented acquisition of the mobile messaging app, Saya, by the US-based company, Kirusa, offering a prime example. The simple app for feature phones which was developed by two young Ghanaian entrepreneurs in 2011, hogged the headlines at the time as it became popular in West Africa and even saw use in other parts of the world.
The success recorded by the aforementioned platform is just one mention out of numerous others that portray the immense potential of the African internet and tech industry. From mobile payment systems to motorbike delivery services and even taxi services, African entrepreneurs are leveraging the power of technology and the internet with a view to solving some of the continent’s most pressing problems. The African internet and tech scene holds significant promise, and there may never be a better time to tap into the opportunity than now.
Also worthy of note are other areas like real estate, healthcare services, drone technology, automobiles, media and entertainment, urban logistics, building and construction supplies, education, as well as startup investments, which also offers ample opportunities for business. If all the mentioned sectors are explored to their full potentials, the much-vaunted socio-economic emancipation of Africa and its people might well and truly be on the cards.
