10 Untapped Business Opportunities in Africa 2022;- An old saying states that “no man can be an island.” This is to stress the fact that all of us rely on each other to live as human beings. business opportunities in Africa, business opportunitis in africa
Untapped Business Opportunities in Africa
This saying can also be applied to countries, as no country is capable of achieving economic growth or development without the help and support of other nations.
Even the most advanced nations need help from other countries from time-to-time.
Why should you start a business in Africa?
Africa is an emerging continent and many international investors are aware of the potential for a lot of money. Many opportunities exist in Africa that are not being realized by many companies and investors, especially given Africa’s small but highly developed economy.
However, this does not mean that Africa is still in its infancy. There are many countries that have gone through economic reforms. They are also one of the most attractive places to invest in, especially when you consider that the returns are often higher than those in the developed countries.
Data shows that African countries have a 14% annual return on investment. Africa is home to nine out of the top fifteen fastest-growing economies in the world. These resources will only become more valuable as the world’s population increases.
Africa’s Top 10 Untapped Business Opportunities 2022
Are you looking to invest in Africa? Here are 18 untapped and innovative business opportunities in Africa for 2021.
1. Cybersecurity & Data Storage
Each year, cybersecurity breaches and hackers cost African businesses more that $3.5 billion. Cybersecurity is rapidly becoming an important emerging business opportunity in Africa due to the potential losses and damages.
Attacks are on individuals and companies of all sizes. The attacks range from simple email scams to sophisticated ransomware and fraud to large-scale data theft, ransomware, espionage to critical infrastructure sabotage and other harmful actions.
According to the Africa Centre for Strategic Studies , up 96% of cybersecurity incidents in Africa go undeported or unsolved. This suggests that cyber threats on the continent may be far greater than the government statistics suggest.
2. Internet Access and Communication Technology
Africa’s internet market is worth billions of US dollars. It is not surprising that digital giants such as Google and Facebook work hard to improve internet access for millions Africans. Google’s Project Loon, and Facebook’s Free Basics is just one of many bold efforts to connect Africa.
Some savvy entrepreneurs in Africa are making important inroads into this industry. One such example is BRCK, a Kenyan company that developed a rugged internet modem for harsh settings and limited internet access.
The modem has an eight-hour battery and can switch between Ethernet, WiFi, and 4G networks.
3. Off-Grid Solar Installation and Power Supply
Although North America and Europe have different energy transition plans, Africa is a clear and unrestricted source of renewable energy, especially solar.
The fight to distribute solar electricity across Africa has become a multibillion dollar business, attracting investors and entrepreneurs from all over the continent.
Solar is one of the most attractive business opportunities in Africa at the moment because of its enormous potential for off grid solar solutions.
There is also a lot of demand.
More than 600 million Africans have had enough of waiting to get electricity from centrally managed power networks that are slow to install, inefficient and unresponsive to their growing power needs.
It’s hard to imagine a device that can bypass the central power system and tap directly into the sun as a source of energy, especially on a continent that has over 300 days of sunshine per year.
The African solar industry has grown and continues to grow.
Togo: The firm also signed a $4 million cooperation deal with the government to supply off-grid solar equipment for 300,000 households.
M-Kopa and Offgrid Electric are strategically entering Africa’s off-grid energy sector in countries like Kenya, Nigeria, Ghana, Tanzania and Zambia. They have received approximately $1B in funding.
As more companies and money compete to supply Africa with off-grid solar solutions, this will be a fascinating sector to watch.
4. Agribusiness and Agriculture
Because of the favorable climate and abundant rainfall, Africa is a great place to start a farm business. Africa is known for its agricultural exports like coffee, tea, and cocoa. Agriculture is clearly one of Africa’s most untapped business opportunities.
You can either sell or export your eggs locally by engaging in chicken farming. You can also purchase dairy cows or meat cattle. A milk processing plant is a good investment as you can process high-value dairy products like yoghurt or cheese. Africa’s fish farming venture is also profitable.
Africa is a favorable climate for agriculture, which means that there is a market for it. This business is suitable for countries with favorable agricultural environments, such as Uganda Tanzania, Ethiopia, Zambia and Tunisia. Profitable Agro Processing Business Ideas has more ideas.
6. E-Commerce Business Opportunity
There are still many niches and new ideas in the E-Commerce industry. Shopify, despite the fact that E-Commerce giants like Amazon and eBay appeared to have the entire industry under their control at the time was a huge success.
E-commerce is one the most profitable businesses in the world right now, as many people prefer to shop online. You can be sure that international investors will be interested in your unique concept such as Shopify.
7. The Green Revolution
All over the world, green and eco-friendly products and services are increasing in popularity. Every solution that preserves the environment, reduces waste and polluting, encourages reuse, recycling, and minimizes pollution is a big business opportunity due to the climate change challenges.
Many African entrepreneurs and businesses are already capitalizing on the potential of this market and are enjoying great success.
Solerebels, Bethlehem Alemu’s sole-eco-friendly footwear business in Ethiopia, has been named the first. This business produces footwear from recycled trash and sells it in North America, Europe and Japan.
Repurpose Schoolbags creator Thato Kgatlhanye creates eco-friendly bags from upcycled plastic shopping bags. Patrick Ngowi is a Tanzanian entrepreneur that has built a multimillion-dollar solar-powered company. The generation of biogas out of organic waste is another area with great potential in Africa.
It will be fascinating to see what the Green Revolution brings!
8. Private schools with low costs
In Africa, the quality of education is rapidly declining in public schools. This is due to corruption and a lack knowledge, insufficient budget, and an increase in the population.
Many African parents opt for private schools in order to ensure their children receive a high-quality education.
Entrepreneurs in Africa have started to establish private schools. They are getting a good return on their investments.
Education is the most powerful weapon you have to change the world (Nelson Mandela).
Many African countries will not be capable of achieving the Millennium Development Goal (MDG), universal primary school enrollment, by 2015.
Despite years of pursuing the Sustainable Development Goal 4, little has been done to reduce the global population of children (SDG 4).
The UNESCO Institute for Statistics reported that Sub-Saharan Africa had 101 million primary enrolment, with 10% of this coming from the private sector (or nearly 10 million children).
9. Alternative Payment Methods
Each year, more than $100 billion worth of transactions in Africa are still done in cash. This represents a huge and lucrative opportunity for financial services companies.
M-Pesa was launched in East Africa in 2011. It has been a mobile-based money transfer service and payment platform in Kenya and Tanzania. The platform handles over 200 million transactions per year.
There is a huge rush in Africa to find Africa’s next major money transfer or payment business.
Many potential companies are competing for Nigeria’s top spot as Africa’s largest economy. PayAttitude and SimplePay are some of the top competitors.
Paga received a $13million investment six months ago to help it grow its business in Nigeria. This is a huge gamble that has a high chance of paying off. In the coming years, payment solutions will be a hot topic.
10. Outsourcing
Business Process Outsourcing (BPO), a multinational multibillion-dollar business, is expected to reach $52 Billion in market size in 2023. This is an increase of 11% annually.
With e-Commerce becoming more popular, there is a growing demand for data and real-time services. Businesses also need to be present on multiple platforms. Businesses are increasingly outsourcing their accounting, data processing and customer service.
India and the Philippines have both benefited from the rise in IT outsourcing demand in the United States, but Africa is now a key participant in BPO in the global Francophone market.
There are many BPO companies in Morocco, Tunisia and Senegal. Morocco is Africa’s BPO leader and employs around 70,000 people. The number of BPOs in Madagascar has increased from just a handful in 2005 to 233 by 2018.
11. Urban logistics
Africans are moving to urban areas and cities more frequently. Africa is currently the fastest-growing region in the world, with more than 1,000,000 people expected living in urban areas by 2050.
Africa will soon have 17 cities that are home to more than five million people and 90 cities that have at least one million inhabitants by 2030. According to the UN, Africa will have 14 megacities by 2050.
Despite the immense economic potential of large cities, there are significant logistical challenges in finding people and providing services.
One notable example is the lack of formal address systems in many metropolitan areas of the continent.
Without precise and verified addresses, doing business in certain parts of Africa can be difficult. E-commerce companies, banks, energy providers and other local businesses face major challenges in identity verification and fulfilling customer orders.
Surprisingly, a Kenyan company has responded to the call. OkHi was founded by an ex-Google employee. It uses a combination of GPS technology, photos and phone location data to identify difficult-to-reach places.
OkHi has validated more than 300,000 addresses. Investors have provided $1.5 million to help expand its service into other countries.
Last-mile delivery of products is another logistical problem.
The increasing population in Africa’s major cities puts a lot of pressure on the country’s transportation infrastructure. This makes it more difficult to transport goods.
The traffic jams in major African cities are already a problem. It’s only going worse!
Good news: There are increasing numbers of African companies trying to solve urban last-mile delivery problems by combining technology and a network of drivers on trucks, cars, and motorbikes.
12. Real Estate
Africa’s top business idea for 2021 is real estate. There is a huge demand in Africa for property close to cities and small towns. Land ownership is the most desired investment. This is the number one priority for new hires.
It can be very profitable to buy large parcels of land and then divide it into smaller pieces for sale. This is a lucrative idea with high chances of success. Land does not decline while demand for it rises each day.
For example, these businesses are doing well in Kenyan and Tanzania. You can find more information at How to Invest in Real Estate in Kenya or How to Start a Real Estate Business in Nigeria.
13. Affordable housing
Shelter is essential for survival. However, many Africans can’t afford to live in expensive housing, especially in urban areas. Housing options such as tiny homes and trailer homes or houses made with non-traditional materials can be affordable.
This type of business that addresses life-threatening issues is easy to attract grants or international investment.
14. Low-Cost Healthcare
Africa is facing a serious health-care crisis. The continent’s public hospitals are severely underfunded and many doctors move to more developed countries. Recent economic growth has led to a drop in poverty to over 43 percent in Africa.
Africa’s population is expected to grow by 2.5 billion people by 2050. This region faces a critical challenge: Laying the foundations for inclusive, long-term development. High rates of maternal and infant mortality continue to plague many African countries.
Malnutrition is a serious problem. Most health-care systems lack the ability to deal with both acute outbreaks and growing numbers of chronic diseases like diabetes. Africa’s health-care systems are in serious disrepair.
Entrepreneurs have the opportunity to provide affordable health care for Africans, given Africa’s rapidly growing population and high incidence of illness.
15. Fashion and Beauty
African cosmetics and fashion are growing at an incredible rate. Africa’s young population is a prime source of fashionable clothes. Many types of clothing are now in high demand across Africa’s rapidly growing metropolitan areas. These include imported and locally-made brands as well as imported designer brands.
Many emerging stars from Africa are starting to establish profitable businesses in the cosmetics and fashion industries. Let me share a few of these fascinating examples.
Suzie Wokabi, one of Africa’s most prominent entrepreneurs, has carved out a niche in the beauty and personal-care industry that is controlled by multinational behemoths like Unilever and Procter & Gamble. Suzie Beauty, a cosmetics company she started in Kenya 7 years ago has been hugely successful.
There are many potential African entrepreneurs that have established profitable fashion companies. This is a business worth keeping an eye on.
16. Training for employees
There is a high demand for skilled workers in the employment sector. Most African university graduates require additional courses to prepare for the labor market. Those who are employed need ongoing skill development. This requires the establishment of professional training institutes.
You can educate your employees in areas such as digital marketing, front office operations, safety training, compliance, HIV/AIDS training, accounting, monitoring and evaluation (M&E), and monitoring and evaluation (M&E).
This business idea is suitable for African countries with well-established education systems such as Nigeria, Zimbabwe and South Africa.
17. New Startups Funding
The number of African companies that you can invest in has risen by nearly 300 percent over the past year. This is amazing considering that many African economies have not grown by more than 3% over the same period.
Although local investors are increasing in number, most of the money comes from outside Africa, especially the United States, Europe and Asia (particularly China).
Who are these global investors that have a passion for Africa and now invest more in the continent’s emerging companies?
These include global investment banking giants like Goldman Sachs, Silicon Valley players like Y Combinator, Partech Ventures, and foreign development institutions like the Global Innovation Fund.
Surprisingly it’s not just the total amount of investment in African companies that has increased over the past year. The volume of individual transactions also increased.
There are more African companies that have received financing exceeding $5 million than any other time in history. In 32 transactions worth $626.9million, 30 companies raised funding in separate rounds totaling more than $5 million.
18. Materials for Building & Construction
Africa is experiencing a boom in building, which will undoubtedly bring in a lot more money for African companies.
It is no surprise that Aliko Dagote, Africa’s richest man, is heavily involved in the cement industry. Cement is a key material used in construction of bridges, workhouses and buildings.
Africa used to spend billions on cement imports. This is no longer the case. Across the continent, Dangote, Lafarge and other cement producers are expanding rapidly.
Cement is just one of many construction and building materials in high demand in Africa. The steel demand is another multibillion dollar business opportunity, possibly even more than cement.
As a result of Africa’s building boom, timber (wood), roofing materials and glass are all in high demand.