3.07.2017

Top Ten Emerging African Businesses

If trends continue toward more political stability, less regulation and increased private investment, opportunities for employment and entrepreneurship in Africa will skyrocket within the next decade. Finger’s crossed!

So, what are the best opportunities for an eager, business minded, future mogul?


Solar power

Africa is sometimes called the “Sun Continent” as it receives more hours of bright sunshine during the course of the year than any other continent of the Earth. Research conducted by Afrobarometer shows that only 4 in 10 Africans have access to a reliable power source. In some other countries, the ratio is as low as 4 in 100. Private businesses like Mkopa began to venture into this sector in 2012. Mkopa has connected over 300,000 homes in East Africa to Solar power since launching in 2012, and has over $40 million in revenue.  

Agribusiness/agritech

Although agribusiness accounts for about 25% of Africa’s GDP, the agricultural sector faces a number of challenges including limited mechanization and capacity, leading to poor yields, fragmented markets, price controls, and poor infrastructure. A lot of these problems can be countered by a more technologically aware population. For example, businesses like FreshDirect, a hydroponics-based farm, caters to Nigeria’s urban population, farming in stacked-shipping containers in the heart of the country’s capital. FreshDirect reports less than 5% loss in crop yield and record sales to clients.

Edutech

Technology is enabling education in Africa like never before. 2-year old EaaS startup, PrepClass, connects students with private tutors to prepare them for exams. Prepclass’ total addressable market, according to its founders, is worth between $250million and $400 million. South Africa’s Sunday Times estimates private tutors earn around R3000 an hour and up to R143,000 a month.

Andela trains software developers and connects them with employers in countries like the US. Although barely 2 years old, Andela has received funding from the Chan-Zuckerberg Initiative of about $25 million dollars.

Ecommerce/retail

An AT Kearney report says retail is “still the next big thing”. According to TNW, 7 Sub Saharan countries, e-commerce makes up 1% to 3% of GDP, and is predicted to make up 10% of total retail sales in key markets by 2025, with 40% annual growth over the next 10 years. A significant volume of retail in Africa occurs through various informal microenterprises or petty traders.

Fintech/payment solutions

About $380b non-cash payments are made in Africa every year and this is projected to increase.
Mpesa may once have been the most famous payment solution provider in Africa but competitors like Paga and Pay with Capture are now giving it a run for its money, literally. Third party payment processors like Paystack, SimbaPay and Flutterwave are also on the rise, paving the way for more businesses in the industry.

Apps

If you’re thinking there’s an app for everything now -  there isn’t - but there should be. Although the global mobile app market is worth over $25 billion, next to 0% are from African apps.

Real Estate

With an expanding middle class, increasing urbanization, influx of expatriates and multinational companies, it’s no surprise that real estate in Africa is booming.

Investing/Startup Financing

If you would like to put your money to work for you while you focus on other things, investment is the way to go. Based on your investment appetite (high, medium or low risk), you can invest through a vehicle of your choice.
According to Mckinsey, the rate of return on investment in Africa is higher than in any other developing region.

Medical procurement and logistics

Africa’s pharmaceutical industry is worth over $20.8 billion, with the prediction that it will be worth between $45m and $60m by 2020. However, due to several issues including poor corporate governance, lack of an effective and sound regulatory framework and procurement costs, suppliers get away with buying fake drugs to have a higher profit margin. 64% of antimalarial drugs imported into Nigeria alone are fake.

Outsourced business processes

Outsourcing is on the rise in Africa. This could possibly be related to the growth of small and medium sized enterprises on the continent, most of which have staff below 20. Services that can be outsourced include customer service,finance and accounting,human resource, strategy, content creation and facility management.




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