By Dawn Castell
Although there are misunderstandings and underestimation of Africa, the continent remains the best place for investors to exploit. Africa is developing at an alarming rate, which creates an avenue for developers to invest. According to the Africa Wealth Report, the continent’s number of millionaires grew by 145% compared to the global 73%. The figure indicates that those who have invested in the continent are getting good returns. There are great opportunities for investment if entrepreneurs can identify gaps and invest in them. Investors can bring innovative remedies and meet the continent’s needs.
The following are top venturing opportunities in Africa for entrepreneurs:
- Solar power.
With the unreliable electricity grid in most parts of Africa, solar energy is what investors should think about providing. Most of the rural areas are not connected to electricity, while the urban centers, which are connected, always get power outages that last for hours if not days. African climate is conducive for solar energy as the sun is available more than 300 days a year. Most of the beginner investing guides admit the potential of solar energy investment. According to an article by the New York Times, some investors have already started investing in Africa’s solar energy.
According to the 2017 USAID report, Africa’s potential to connect to solar energy has made the organization give out grants to investors to provide solar energy in East Africa. M-KOPA, a Kenya based investment, has connected more than 300,000 homes in the region
The agri-business sector in Africa is yet to get full exploitation. Africa’s fertile soil is a gold mine waiting to be exploited by investors. According to a 2014 report by the World Bank, the total investment in the agri-business sector will be more than $1 trillion in 2030. Most arable land in Africa is uncultivated and can produce enough for both the local market and exports.
3. Cheap, but quality Smartphones.
Africa is currently experiencing a high demand for cheap-quality smartphones. African phone consumers are now upgrading from the first generation handset to advanced smartphones. However, most Africans can’t afford expensive smartphone brands like Samsung, iPhone, and Blackberry. Most smartphone users look at cheaper and stylish smartphones from companies like Tecno, Infinix, and Itel. Therefore, investors who will invest in cheap but low-quality smartphones will raise huge profits from their sales. Check out more beginner investing guides to learn more about the potential of smartphone sales in Africa.
4. Internet connectivity.
The African internet access market is increasing due to the massive demand by internet consumers, who include corporations and individuals. Ethernet, WiFi, and 4G Network are rising daily, and smart entrepreneurs can exploit the opportunity. With the 5G network set to explode in 2021, aggressive entrepreneurs will reap a lot from the venture.
5. Cheap but quality education.
More than fifty percent of the African population is below 30 years old. The group is talented, but due to poor and lack of access to quality education, the young stars’ population remains uneducated to exploit their full potential. Do not under-estimate the large growing number of the middle class who will stop at nothing to see their children get a quality education. According to a World Bank report, The Unexplored Potential of Trade in Services in Africa, there is a growing potential in education investment, especially in Sub-saharan Africa. Investors should, therefore, capitalize on investing in cheap and quality education.
6. Retailing and E-Commerce.
Retailing businesses are picking up at a very high rate all over Africa. Africa’s large population, which is growing tremendously, offers a good market for retailers. The Mall of Africa opened up in South Africa in 2016 became the largest shopping mall in Africa. In 2017, the Two River Mall was launched in Kenya, becoming the largest shopping mall in East Africa. International and local brands are scrambling for spaces from emerging malls.
Retailing in Africa has also gone online. Like Jumia, Copia, and Konga, online businesses have picked up well and are worth more than $1 billion. New global entrants into the e-commerce market enable African to shop directly from the USA, China, and Canada.
Investors in retailing and e-commerce will make huge profits due to the locals’ growing middle class and increased purchasing powers.
7. Real estate.
The African real estate investment is a multi-million dollar venture that will see investors build fortunes from it. Real estate is emerging in every part of the continent. There is a shortfall of housing units for the large and growing middle class. For instance, in Nigeria, there is a deficit of more than 17 million housing units
Entrepreneurs are focusing on Africa due to its large population, vast natural resources, and relatively undeveloped nature. According to the 2011 UN Conference on Trade and Development report, Africa stands as the most viable investment place. It had the highest returns on Foreign Direct Investment from 2006 to 2011. However, regional conflicts, lack of infrastructure, and Government inefficiency is scaring investors.