5 Business Opportunities in Africa That Will Thrive in 2017
In recent years, most of the ‘high income earners’ have been young entrepreneurs and investors who have created promising businesses and invested in lucrative sectors of Africa’s fast-growing economies.
In this article, I’ll share with you the top business opportunities on the continent that will thrive in 2017.
1) Solar Power
Solar energy is one of Africa’s most abundant natural resources. Most parts of sub-Saharan Africa enjoy more than 300 days of free God-given sunlight every year.
Still, over 600 million people on the continent, especially in rural areas, don’t have access to reliable electricity. In most cities and towns, power outages are the norm and people often have to rely on noisy petrol and diesel power generators.
Solar energy is free, absolutely clean and abundant. And it provides the best alternative for people in remote parts of Africa who are out of reach of electricity grids.
I’ll share a few interesting examples…
Off Grid Electric, a solar energy provider in Tanzania recently raised $25 million from international investors and won a $5 million grant from USAID. The company is already on track to provide solar power to 1 million homes in East Africa by 2017 and has recently expanded into Rwanda.
M-KOPA, which provides ‘pay-as-you-go’ solar power systems has attracted investments of up to $40 million. This Kenyan-based business has already provided solar power to nearly 300,000 homes in Kenya, Tanzania and Uganda.
Agribusiness is Africa’s untapped goldmine, and a major potential source of income in 2017.
According to a World Bank report, Africa’s agribusiness industry is expected to be worth $1 trillion by 2030.
With up to 60 percent of the world’s uncultivated arable land, fertile soils, abundant labour, and all-year sunshine, sub-Saharan Africa surely has the potential to become the world’s biggest exporter of food products.
Even if Africa decides to ignore export markets, the continent’s one billion people provides a huge and ready market for agribusiness.
Still, every year, African countries import more than 70 percent of wheat consumed, over 300,000 tons of chicken and spend more than $10 billion on imported grains, especially rice.
Interestingly, more African entrepreneurs are tapping into the vast opportunities in Africa’s agribusiness market.
And with the continued harsh impacts of low crude oil prices in 2016, sleeping agribusiness giants like Nigeria and Angola are finally putting a strong focus on agribusiness as a means to diversifying their economies. This means that governments in these countries are now more open and supportive of agribusiness initiatives.
3) Internet Access
Africa’s internet market is worth billions of dollars.
It’s no surprise that tech giants like Google and Facebook are scrambling to improve internet access to millions of Africans. Google’s Project Loon and Facebook’s Free Basics are just two of several bold initiatives to connect Africa.
However, some smart African entrepreneurs are already making impressive moves to conquer the internet access market.
One example is ‘BRCK’ a startup company in Kenya that has created a rugged internet modem device that’s designed for harsh environments with limited internet connection and electricity. The modem can hop between Ethernet, WiFi, 3G and 4G, and comes with eight hours of battery life.
This African-inspired invention has already sold thousands of units in 54 countries, even in faraway places as India. Their biggest customers have been schools.
Recently, BRCK raised $3 million in funding from investors to extend the reach of this amazing device. The entrepreneurs behind it will surely be smiling to the bank, after all the hardwork is done.
In April 2016, the Mall of Africa opened in South Africa. The massive 131,000 square metres of retail space is the largest shopping mall in Africa ever to be built in one phase.
Across the continent, both local and international supermarket brands like Shoprite, Game, Checkers, Woolworths, Edgars and Spar are expanding as they scramble for every inch of available space in shopping and retail infrastructure developments.
Interestingly, the battle for retail supremacy in Africa isn’t only happening in physical retail chains.
E-commerce giants like Konga and Jumia have grown quite impressively in the last few years. Both internet-based retail businesses now have a combined worth of over $1 billion.
In fact, the battle ground for Africa’s retail market is moving beyond the continent’s shores. New E-commerce entrants like Mall for Africa and Shop to my Door now make it possible for Africans to shop directly from retailers in the USA, UK and China.
Africa is now one of the fastest growing retail markets in the world. A large and growing middle class, increasing local spending power, and a boom in the number of expat workers are fueling the shopping trend on the continent.
5) Payment Solutions
Every year in Africa, over $100 billion in transactions are still done in cash. This presents a huge and lucrative financial services opportunity for savvy entrepreneurs.
Since M-Pesa was introduced in East Africa, the transformational mobile-based money transfer and payment service has proved to be phenomenal in Kenya and Tanzania, where the platform handles over 200 million person-to-person transactions every year.
In other parts of Africa, there is a huge scramble for Africa’s next big money transfer and payment service.
In Nigeria alone, several promising businesses are jostling to dominate Africa’s biggest economy. Some of the top contenders are Paga, PayAttitude, SimplePay and PayWithCapture.
Less than six months ago, Paga attracted a $13 million investment to expand its business within and outside Nigeria. It’s a huge bet that has the potential to really pay off.
Payment solutions will be a key area to watch in 2017.