Africa is different (in a good way).
Where the worldwide trade has stagnated in the wake of the US-China trade war, intra-regional trade in Africa has gone through the roof. Where the world is seeing a shrinking of population, Africa is destined to become a home of 1/3rd of humanity by the end of this century.
And if you’re a businessman, the good news doesn’t stop there.
For, where the world is seeing a shrinking of the middle-class population (except South Asia), the number of middle-class families in Africa has exploded. No wonder, then, that giants like Coca Cola and Heineken have arrived in the continent – as they can sense that Africa is the future.
With these facts in mind, let’s look at four of the best business opportunities in Africa.
1- Develop an African Food Brand
Africa is a classic case study of the world systems theory – one which divides the world into core (developed) and periphery (developing) ones. While the countries at the core export manufactured goods to earn more profits, those at periphery remain stuck in poverty since they only export raw materials.
Nothing illustrates this theory better than African cocoa beans.
Despite being the birthplace of coffee, the continent exports only raw cocoa to developed countries which then convert it into coffee and earn astronomical profits. An estimate indicates that if Africans convert their own beans into manufactured coffee, they could end up tapping a $100 billion market.
Therefore, if you’re a businessman with capital to invest, you should start developing a ‘Made-in-Africa’ food brand.
2- Invest in Solar Energy
Africa might be home to the majority of the world’s population but when it comes to having energy, the continent lags behind the rest of the world. Hence the reason why despite the best efforts of the UN to connect the continent to the grid, only 35% of African households use electricity.
Which is a potential gold-mine if you can erect solar farms in the continent.
That is, because, solar energy is one of the most attractive business ideas in Africa – a continent which boasts 300 days of sunlight on average. Also, in contrast to fuel-operated power plans, solar farms have a negligible running cost. That means you won’t have to spend much after your initial investment.
Also, with World Bank offering $200 billion in its Climate Action Fund – and Shell devoting $1 billion of its own to provide clean energy to Africa – solar entrepreneurs in Africa stand to benefit the most.
3- Convert waste into something useful
Ask any African, and they might tell you that the continent has a waste problem.
More than 80% of the household and industrial waste that the continent produces every year ends up in its landfills or pollutes its water bodies. Throw into the mix Africa’s increasing population, and its waste problem can be deadly in the near future.
Though that isn’t the only reason why we recommend you invest in this sector.
In South Africa, a company was able to raise $30 million after it demonstrated that it could successfully convert waste into animal feed. Another company, this one in Ethiopia, makes millions in profits every year by producing 50GW of electricity from waste.
Consequently, if you don’t have enough capital to start a solar farm, perhaps you could do by enacting a small unit which converts waste into something useful (and earn millions in the process).
4- Build a cement plant
As World Bank tells us, the share of Africans living in urban areas is expected to grow to 50 percent by 2030 from the current 36%. In other words, 170million Africans will be needing places to reside in the continent’s cities in the near future.
Where do you think these people would live?
Of course, in cement-build houses. Hence the reason why Africa’s richest man has expanded the production capacity of his cement factories. That’s why we recommend that you invest in this business as it promises a huge return on investment, as the abovementioned figures make clear.
Regardless of where you were born, Africa is a land of opportunities. Provided you have the capital to spend and a solid business idea as to where you should invest your hard-earned money, this continent can give you a dream return on your investment.