10 Lucrative Business Opportunities in Africa
Are you an investor or entrepreneur looking to invest or start a business in any of the African countries?
Do you want to know the best investment opportunities or small business opportunities in Africa?
Then read on…
Centuries ago, Europe was the darling economy of the world; until America rose to become the world’s economic power.
Now, Asia has the most countries with the fastest rising economy followed closely by Africa. Africa is perceived to be one of the frontrunners of future economic growth next to Asia.
Africa’s foreign development investment has significantly improved over the past decade. It is forecasted to have a $150Billion growth by 2015 with Africans themselves leading the investment growth across the continent. So without wasting your time, here is a list of top 10 investment ideas and small business opportunities in Africa.
1. Fiber Optics + Internet service provision
As Africa open up to the world, there is a tremendous increase in the demand for quality telecommunication and internet service. Take for instance, video and web conferencing, web TV are yet to fully utilized in Africa because of the poor internet speed experienced in most African countries.
This is where the need for Fiber optics cable comes in. This opens doors for outsourcing business and e-commerce ventures as the price of internet connection will be lower. In my country Nigeria, companies such as MainOne and Glo have taken the lead in the laying of fiber optics cable but the industry is not yet competitive; and other African countries are still untapped.
2. Industrial Zones and Free Trade Zones
Industrial and free trade zones are springing up rapidly in Africa and South Africa is taking the lead. This is proof that the African government is determined to improve its world ranking.
If you run a manufacturing firm or you have plans to go global and tap into Africa’s potential, then you should consider the industrial zone because it offers strategic economic advantage with its location near local and national transportation links. This also opens doors to employment opportunities. And businesses that will be established in this zone will help support the expanding manufacturing industry and add value to the economy.
3. Government Tenders and Contracts
Responding to government and non-government tenders is next in the top 10 business opportunities in Africa. Since Africa is a fledging industrialized continent, the governments of various countries have an open market policy making it tenders an opportunity for business.
4. Outsourced Business Process Services
Another small business opportunity in Africa is Business Process Services. BPS lowers administrative and operating costs. Thus, it makes it easy and possible for the business to provide new services, improve core business activities and enhance customer service. With the massive population and high number of jobless graduates, technicians and technologist, you can set up a firm that will deliver administrative services to developed countries at a cheaper rate.
Take for instance data entry services, database management services, call center services and customer care services are examples of services that most developed countries outsource to countries with skilled but cheap workforce.
5. Real Estate Development
In the list of the top 10 business opportunities in Africa is real estate. Purchasing or developing commercial property in Africa is very advantageous since it has appreciated over the past ten years. Evidence to this is the fact that demand for commercial real estate in countries such as South Africa, Ghana, Nigeria, Egypt, Kenya, etc have gone up to 400%, a growth caused by foreign investors and the increasing demand of offices by new businesses.
But is commercial real estate the only lucrative aspect of real estate in Africa? My answer is no. There is also an overwhelming for residential properties and the rest. In fact, regardless of the area of real estate you venture into; you are bound to reap bountiful profits.
6. Health Care
Sixth in the top 10 business opportunities in Africa is health care. The standard of health care in Africa is very poor when compared to the standards in Europe, Asia and America. Secondary and tertiary healthcare services have a high investment potential in Africa as health management, research and information technology are lacking. This also offers the opportunities to serve a social cause.
Taking my country Nigeria as an instance, the health care facilities on ground are obsolete and unreliable that most people seek medical checkup abroad and delicate surgeries such as heart and kidney transplant are done abroad.
7. ICT Infrastructure
Since Africa lacks infrastructure in the field of communication and information technology, it is a good investment opportunity. There are local IT and communications companies looking to expand their business and is seriously looking for foreign investors to make it possible; thereby creating opportunity for private investors to help make a thriving company improve its operations in return for a profit.
8. Power generation
Eighth in the top 10 investment opportunities in Africa is Nigeria’s need for infrastructure in the field of power generation. The government in fact has announced its plan to attract $100 billion in investments over the next five years for its power sector. And when there is a need to be satisfied, there are much business opportunities behind.
In fact, there is a plan privatization process in place and to be sincere with you; power generation is the next big business not only in Nigeria but Africa as a whole. In fact, power generation is highly untapped because the primary source of power in Africa is Hydro and it is still under-utilized while solar, wind, nuclear, etc are still untapped.
9. Agro-Allied investment
Next in the list of business opportunities in Africa is still in Nigeria which needs agricultural equipment, chemical supplies, waste recycling operations and fertilizers. But I want to emphasize the point that that the need for agro-allied equipments is not peculiar to Nigeria alone but all African countries.
10. Fashion & Beauty
Africa has hundreds of rising stars who are building successful businesses in the fashion and beauty industry. I’ll share a few interesting examples with you. Suzie Wokabi is one of Africa’s leading entrepreneurs breaking into the beauty and personal care market, a sector that is dominated by international giants like Unilever, Procter & Gamble, L’Oréal and Mary Kay. Suzie Beauty, the cosmetic business she started about 7 years ago in Kenya, has become hugely successful.
Kunmi Otitoju is another inspiring entrepreneur who has built a successful business with her luxury label, Minku. Her young business makes high-quality leather bags designed with Aso-oke fabric, a hand-loomed cloth woven by Nigeria’s Yoruba people. Her unique designs have become a major hit in high end stores in Nigeria. (photo credit: minku.com) The list of promising African entrepreneurs who are building successful businesses in the fashion industry is quite impressive. This would be an interesting industry to watch in 2015.
In conclusion, I want you to know that every sector of the economy in Africa has huge untapped potential; from technology, agriculture, food industry, services, real estate, etc. They all have the potential to yield good return on investment.
The article was published on My Top Business Ideas and the author of the article is Ajaero Tony Martins
Ajaero Tony Martins is a serial entrepreneur and investor with several successful companies in his portfolio. He does business in one of the world’s toughest environment and has an audacious goal to become a billionaire in his life time.