Business Trends in Africa
Africa’s 54 countries are diverse in terms of population, development, growth rates and level of stability. Some countries like Nigeria and South Africa have nearly a population of 190 million people while other African nations have about 20 to 40 million and this number is quickly growing. With this diversity comes unique business ideas that would help boost business environment while also allowing for problem solving. Africa’s population growth in the cities makes it the fastest urban region in the world. With this comes more incomes and a growing middle class thus generating new business opportunities especially in the consumer market. As there is more demand for jobs in the cities so is the demand for housing which has led to a new market segment in affordable housing. More people are flocking into the urban sector so there is a need for affordable housing. This need opens a door for great opportunities for business owners in the real estate sector.
Many parts of Africa enjoy at least 300 days of sunshine all year round. Why not harness this energy? The best thing about solar is that it’s free and sustainable. While policy makers in Europe and America debate about the most fitting energy transition strategy for their countries, Africa presents a clean and open slate for renewable energy. Solar energy has become one of the most attractive business opportunities in Africa. The race to spread solar power across the continent is now a multi-billion dollar industry that continues to attract entrepreneurs and investors from within and outside Africa. With the rise in demand a solar systems developer, BBOXX, signed a deal with the government of DR Congo to supply solar kits and grids to its citizens. Right here in Kenya most people have switched to solar energy after disappointment from the central source of power supply, with the rising costs and persistent black outs.
We can never run away from agriculture. This is a trend that will always trend. Agribusiness in Africa remains to be profitable. Unlike before there is an opportunity to create strong brand products that can attract premium prices from foreign consumers. For example, cocoa beans used in chocolate and coffee beans are plant products that have created big brands with branches and cafes around the world. A lot of potential income have been lost by exporting unprocessed agricultural produce. We have seen cocoa beans being exported unprocessed and then imported back as chocolate by factories abroad. At the mention of coffee, it would be easy to think of Java or Starbucks and not Ethiopia which is one of the largest exporter of coffee beans. With an emerging business like Garden of Coffee which is a brand from Ethiopia founded in 2016 by Bethlehem Alemu that ships coffee to Russia, Sweden, Germany just to name a few, it changes our mentality towards agriculture. Thousands of African farmers have remained trapped in poverty while foreign companies make the huge returns. As a result, foreign consumers are now more interested in startups from Africa and the products that are made in Africa. This has led to emerging businesses that develop uniquely African product brands that have the potential of becoming big hits. Introduction of new technologies have allowed land owners to have the means to upgrade outdated farming methods and produce plenty of yields hence creating a surge of yet more business in the supply chains. There is also a new concept known as crowd farming where people in one community pool funds to help farmers produce then the investors get a supply of those crops during harvest.
Technology has definitely produced one of the newest ideas when it comes to market trends. Most financial services are accessed by a small percentage of Africa’s population. However, the spread of the internet has helped. The emerging financial tech industry provide innovative solutions that help business issue bills, access loans, manage payments and other services that are not easily accessible at the banks. With examples like mobile banking, online shopping or booking, these are some of the effects of technology and worth investing into. Technology has also brought about the growth in film industry in production and distribution. Nowadays you can access your favorite films on YouTube or on Netflix. African films have proven to be very popular on the continent and those in diaspora. The global video-on-demand by Netflix could change the face of film production and distribution right here in Africa.
How about the fashion industry? We have noticed that there is a global interest for exotic fashion designs and prints from Africa. The global fashion industry stretches from the farmer who grow cotton and other natural fibers, to the massive production factories in Asia that spin fibers into a variety of textiles. This is then stretched further to garment factories which convert textiles into apparels. Africa owns a very thin slice of this industry but there is hope since some entrepreneurs are opening up significant opportunities in global fashion to investors in Africa. Options available are in fashion design and apparel production which creates opportunities for local entrepreneurs. A growing number of creative fashion designers are emerging from our continent and the world is noticing. For example, Nike collaborated with a local Nigerian designer for a special edition of jersey inspired by Adire a traditional print from Nigeria. Senegal’s Tongoro by Sarah Diouf is attracting international celebrities and customer base outside Africa.
Just to mention these few ideas, Africa has seen a significant progress in economic growth lately and even the developed nations seem to have taken interest in this. Prominent business men and experts consider the continent as an attractive destination for investment. This presents a lot of resources and unique opportunities that business owners can tap into.