Africa is a continent filled with promise and opportunity. It might be called an investor’s playground considering the growing infrastructure addressing the need for industrial and economic development.
Many foreign investors inject capital into projects that’ll positively impact the continent as a whole.
South Africa has long been considered a gateway country to doing business in Africa. However, in 2016 Business Day reported that according to the Global Entrepreneurship Monitor, South Africa has fallen from grace in the entrepreneurial space. It is considered one of the worst-performing African countries in relation to entrepreneurial activities.
The latest Africa Wealth Report for 2017 has reported that there are over 160 000 millionaires across the continent. This means that other countries that have been touted as prospective hubs of opportunity (such as top performers, Botswana and Senegal) are now burgeoning.
The new brood of millionaires throughout Africa is mostly young entrepreneurs working together with investors to build business entities that operate in the most lucrative sectors of the economy. These small businesses offer employment opportunities too and this is how Africa remains a continent that’s focused on wealth creation.
But starting a business in an African country is a little different to start one in a first world country. There’s a serious lack of funds and infrastructure in most countries. This is followed by some enormous bureaucratic hoops you’re expected to jump through to keep the government happy. But if your venture is innovative enough and you can manage to set up your operation with a bootstrapping financial strategy, then you can create a truly prosperous business.
Because African countries are unique in their strengths and weaknesses you can’t just set up any type of business you want.
You need to research the marketplace thoroughly and find a way to address a truly specific need within the industry of your choice. The sector you choose should already be lucrative and expanding within a fast-growing African economy. You may find that the marketplace is already peppered with businesses who offer a similar value proposition. But if you are addressing a massive need then there’s likely more than enough business for everyone. Successfully getting ahead of your competition is something you achieve through a robust and strategic marketing plan.
This can be mapped out after you’ve completed market research and identified your customers. But you need to choose the right business from the start.
Here are three markets that African entrepreneurs can’t get enough of.
Alternative energy sources are crucial to Africa’s success. Firstly, electricity is a major issue in many of the rural areas in most African countries and secondly, green power is free and easy to create with Africa’s abundance of natural resources. Sub-Saharan Africa particularly enjoys a climate that offers enough sunshine to support solar energy infrastructure.
Agriculture and agribusiness is one of the biggest industries in Africa. Sub-Saharan Africa stands out as having the most potential to boost the continent’s economic growth.
The climate in this part of Africa is just about perfect for any type of agribusiness. If the export opportunity is harnessed then it could become the largest exporter of food produce.
Africa’s property market serves as a major opportunity for both entrepreneurs and investors alike. Nigeria, Angola, Mozambique, Egypt, Kenya, and South Africa are pinpointed as key markets to watch.
Property investment spans from high-rise luxury hotels and shopping malls, to residential houses or apartments. Nigeria in particular requires investment in their housing as they are suffering a shortfall. This provides opportunities for buyers, sellers, contractors, engineers and the like.
If any one of these three industries sounds like an opportunity not to be missed then there isn’t another minute to waste. Starting a venture in these industries will certainly see you raking in the profits. But only if you do it properly. You need to address all the legalities and administrative details, but you’ll also need the support of suppliers, manufacturers and service providers who can attend to your needs.
In all three industries, you’ll need to partner with a fully capable supplier of construction equipment and infrastructure solutions.
Talking to the likes of Babcock International for your engineering solutions before you launch into your project is a smart move; setting up your automated accounting software beforehand will help keep your expenses in check and employing an international business legal team will help you set up quickly.
Launching a business in Africa is no small feat but if you do it right you’ll be sitting in the pound seat soon.