Business Opportunities in Africa: The latest Africa Wealth Report by New World Wealth reveals that there are now just over 160,000 millionaires in Africa.
Interestingly, from 2000 to 2014, the number of millionaires on the continent increased by more than 145%, compared to the global growth rate which is 73%.
In recent years, most of the “new millionaires” have been young entrepreneurs and investors who have created promising businesses and invested in lucrative sectors of Africa’s fast growing economies.
This year, many new millionaires will join the club.
In this article, we will share with you the business opportunities on the continent that will make the most millionaires in 2016.
Do you want to invest or do business in Africa, but don’t know where to find reliable market information or profitable business ideas?
1) solar energy
Solar energy is one of the most abundant natural resources in Africa. Most parts of sub-Saharan Africa enjoy more than 300 days of God-given free sun each year.
Yet more than 600 million people on the continent, especially in rural areas, lack access to reliable electricity. In most cities, power outages are a daily occurrence and people often rely on gasoline or diesel engines.
Solar energy is free, absolutely clean and plentiful. And it offers the best alternative for people in remote parts of Africa who are out of reach of power grids.
Interestingly, some smart entrepreneurs are taking up the challenge of lighting in Africa through solar power, and are very likely to join the millionaire club in 2016.
Here are some interesting examples…
Off-grid, a solar energy supplier in Tanzania recently had $ 25 million from international investors and won a $ 5 million grant from USAID. The company is already on track to provide solar power for 1 million homes in East Africa in 2017 and has recently expanded to Rwanda.
M-KOPA, which supplies pay-as-you-go solar energy systems, has attracted investments of up to $ 40 million. The Kenya-based company has already supplied solar power to nearly 300,000 households in Kenya, Tanzania and Uganda.
State of play of the “Solar energy” sector in Africa in 2017
DRC: Micro enterprise manufactures up to 30 solar panels per week in Kinshasa
Oumar Ayoumbaye and its mobile air conditioning powered by solar energy
2) Food industry
Top business opportunities for Africa 2016 – Agribusiness
Photo credit: IITA
Agribusiness is Africa’s untapped gold mine, and an important potential source of millionaires in 2016.
According to a World Bank report, Africa’s agrifood industry is worth $ 1 trillion in 2030.
With over 60% of the world’s uncultivated arable land, fertile soil, abundant labor, and year-round sunshine, sub-Saharan Africa certainly has the potential to become the largest exporter world of food products.
Even if Africa chooses to ignore export markets, a billion people on the continent offer a huge market ready for agribusiness.
However, each year, African countries import more than 70% of the wheat consumed, more than 300,000 tonnes of chicken and spend more than $ 10 billion on imported cereals, especially rice.
Interestingly, more African entrepreneurs are tapping into the vast opportunities in Africa’s agrifood market.
And with the impacts of collapsing crude oil prices in 2016, agrifood giants like Nigeria and Angola are finally putting a strong emphasis on agro-industry as a way to diversify their economy. This means that the governments of these countries are now more open and support agrifood initiatives.
State of play of the “Agrifood in Africa in 2017” sector
The start-up Mlouma revolutionizes the marketing of agricultural products in Senegal
Fruit juices made in Mali from Zabbaan take off and export
Top business opportunities for Africa 2016 – smartphones
The phone in the picture is one of the versions of Obi Worldphone; a low-cost smartphone that is specifically targeted on the African market.
Guess what ? It sells for about $ 129, and it sells like hotcakes.
Africa is currently the second fastest growing market for mobile phones, after Asia. However, the first wave of the mobile phone revolution in Africa is almost over.
These days, African consumers are looking to abandon the “first generation” of phones for smartphones. It is therefore not surprising that the growth of technology and fashion on the continent now presents a multi-billion dollar market for smartphones.
However, most “new generation” smartphone devices like the iPhone, Blackberry and Samsung are quite expensive for the average African. This has created a huge opportunity for low-cost smartphones.
Best of all, many of these smartphones are built on the Android operating system, have similar characteristics to “high end” smartphones, and most are just as elegantly designed.
In the past eighteen months, more than a dozen low-priced smartphone brands have made their debut in the African market. Given the market potential of these phones, they will most likely make more millionaires for the entrepreneurs behind them.
The technology boom in Africa started by smartphones
Jean-André Ahipeaud: The Ivorian who designs smartphones
Nigeria is home to Africa’s first smartphone manufacturing unit
4) Internet access
Top business opportunities for Africa 2016 – Internet access
The Internet market in Africa is worth several billion dollars.
No wonder tech giants like Google and Facebook are fighting to improve Internet access for millions of Africans. Google’s Project Loon and Facebook’s Free Basics are just two of the many bold initiatives to connect Africa.
However, some smart African entrepreneurs are already making impressive moves to conquer the Internet market.
One example is ‘BRCK’ a startup company in Kenya that has created a robust internet modem device that is designed for harsh environments with limited internet connection and electricity. The modem can juggle 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 distant countries like India. Their main customers are schools.
BRCK recently raised $ 3 million in investor funding to expand the reach of this amazing device. The entrepreneurs behind will surely smile during 2016.
State of play of the “Internet Access” sector in Africa in 2017
Internet access rate and progress in each of the 54 African countries, according to Internet Live Stats
Cameroon: GoSat, the new provider of broadband Internet access by satellite, partner of Konnect Africa
group of african american students
Young talents from Africa are the most overlooked and little helped.
With one of the youngest populations in the world (more than 50% of Africans are under 31), the continent is rich in creative and innovative talents. However, the lack of access to quality education is a serious threat to human capital in Africa.
Currently, a couple of interesting companies and initiatives have had remarkable success in addressing education issues in Africa.
Bridge Academies (in Kenya and East Africa) and Omega Schools (in Ghana and West Africa) have built an incredible education model of low-cost primary schools that allow students to pay less than $ 1 per day for tuition fees.
Another interesting company on education on the African scene is Andela. Thanks to its free and very rigorous training program, Andela develops promising African talents including the best software developers who are committed to the likes of Microsoft and other technology giants in the United States and Europe.
This interesting business model is called “talent-as-a-service”.
Andela recently attracted $ 10 million in investment and is on track to train approximately 100,000 world-class African software developers over ten years.
State of the education sector in Africa in 2017
Senegalese engineer launches start-up to help schools
In Africa, virtual courses are expanding access to education
6) African Art
Top business opportunities for Africa 2016 – African art
Photo credit: CNN Africa Startup
How much do you think African art is worth these days?
You will be surprised.
In November 2014, a collection of ancient African art from Mali, Gabon, Congo and Liberia was sold in New York at Sotheby’s for a record price of $ 41 million. This is the largest sum ever made from the sale of African art in the United States.
Not too long ago, a set of wooden sculptures by Nigerian artist Ben Enwonwu sold in London for more than $ 500,000, three times the expected price.
New World Map, the sculpture by Ghanaian artist El Anatsui, sold for around $ 767,000 in aluminum and copper, one of the highest prices ever awarded by the work of an indigenous African artist.
After decades of neglect, the two ancient and contemporary works of African art are attracting high prices in the major art markets of the world.
7) Retail trade
Top Business Opportunities for Africa 2016 – Retail
Image credit: techmoran.com
In April 2016, the Mall of Africa will open in South Africa. This massive 131,000 square meters of commercial space is the largest shopping center in Africa ever built in a single phase.
Recently, the Two Rivers Mall opened in Nairobi, Kenya. It is the largest shopping center of its kind in East Africa.
Across the continent, both local and international supermarket brands like Shoprite, Game, Checkers, Woolworths, Edgars and Spar are growing and scrambling for every inch of space available for purchasing and developing retail infrastructure.
Interestingly, the battle for retail supremacy in Africa has shifted from physical retail chains.
E-commerce giants like Konga and jumia have grown impressively in recent years. The two Internet-based retail companies now have a combined value of more than $ 1 billion.
In fact, the battleground for the African retail market is moving beyond the shores of the continent. With new e-commerce entrants like Mall of Africa and Shop to my Door, it is now possible for Africans to shop directly from retailers in the United States, the United Kingdom and China.
Africa is today one of the fastest growing retail markets in the world. A growing middle class, increasing local purchasing power, and a boom in the number of expatriate workers are fueling the purchasing trend on the continent.
8) Online applications and services
Best Africa Business Opportunities for 2016 – Applications and Online Services
There is a digital revolution in Africa. These days, many services now have an app or go online. Africa’s digital economy is growing very fast.
These days, there is almost an online application or service for whatever you want.
If you are looking for suitable hotel accommodation in Nigeria, Hotels.ng and Jovago.com are now the largest online services in the hotel reservation industry. Recently, Hotels.ng attracted an investment of $ 1.2 million.
If you want to watch African movies on the fly, there is an app for that. IrokoTV is an application that gives you access to more than 5,000 African films on your mobile phone.
In January 2016, IrokoTV had an additional $ 19 million in funding to expand its presence across Africa.
If you want to order custom pieces, without having to run to artisans or worry about quality, there is an online service for that too. Showroom.ng is a Nigerian start-up that is changing the way people buy furniture in Africa’s largest economy.
In 2016, more apps and online services will be launched across Africa to solve problems and bring value. And more millionaires will crimp in this process.
9) Payment solutions
Top Business Opportunities for Africa 2016 – Payment Solutions
Photo credit: memeburn.com
Each year in Africa, more than $ 100 billion in transactions are still made in cash. This poses a huge and lucrative financial services opportunity for savvy entrepreneurs.
Since M-Pesa was introduced in East Africa, mobile money transfer and payment service has been phenomenal in Kenya and Tanzania, where the platform handles more than 200 million person transactions to no one every year.
In other parts of Africa there is a huge scramble for the next money transfer and payment service.
In Nigeria alone, several promising companies are scrambling to dominate Africa’s largest economy. Some of the contenders are Paga, PayAttitude, SimplePay and PayWithCapture.
Less than six months ago, Paga attracted an investment of $ 13 million to expand its activities inside and outside of Nigeria.
Payment solutions will be opportunities to watch in 2016.
CinetPay: Revolutionizing online payment in Africa
Monetbil: Pay for online purchases with Mobile Money
Orange Digital Ventures invests in Africa’s Talking, leader in the distribution of communication APIs and mobile payment to developers
10) Real estate
Top business opportunities for Africa 2016 – Real Estate
The real estate market in Africa is estimated to be worth several billion dollars, and several new millionaires will build their fortunes on this market.