Africa is a continent that has high economic potential due to its favorable climate for agriculture, abundant natural resources, wildlife, improved macroeconomic policies etc. It is undoubtedly an ideal spot for investment. It may be challenging, however, to understand the African market. This article will help you understand the African market and provide you with information on some businesses you can consider investing in.
Profitable Business Ideas in Africa
Due to its favorable climate and adequate rainfall, Africa is a good spot to practice agriculture. Africa is known for exportingagricultural products such as cocoa, coffee and tea. You can invest in poultry and export eggs or sell them locally. You can also invest in dairy or beef cattle. Having a milk processing facility will be an added advantage since you can process value-added dairy products such as yoghurt and cheese. Agriculture has a ready market while the climate in Africa is favorable. This business is suitable in countries with good agricultural climate such as Uganda, Tanzania, Ethiopia and Tunisia.
2. Procurement and Logistics
Africa lacks reliable procurement and logistic services. Most of the companies operating in Africa in procurement are owned by investors located outside Africa. This creates a huge opportunity for local entrepreneurs willing to venture into this kind of business. This sector provides a platform where the entrepreneur will bridge the gap by providing the required goods and services. Some of the potential customers you will get in this business include governments institutions in African countries. Also, you can be sure to get the corporate world knocking on your door for your services. To become successful in this business, you need a wide network and also be innovative. Some of the countries to establish such a business include Rwanda, Botswana, Kenya, Congo and Ghana.
3. E-commerce Business
Offering goods and services online is another lucrative business idea in Africa. The biggest challenge is fraud. Hence, to be successful in this business, you need to come up with a way of eliminating fraud. A customer-friendly environment and adequate advertising is also needed for this business. There are few e-commerce companies in Africa creating more room for new investors. You can establish this business in Egypt, Ethiopia, Rwanda, Kenya, Zimbabwe and Nigeria.
4. Financial Consultancy
Africa has many innovative and talented entrepreneurs with businesses coming up every day. This creates the need for financial consultancy whereby new investors can learn different ways to invest their money. The secret to this kind of business is being honest to your clients. In the past, investors have been swindled their money and this discourages many investors from seeking services of financial consultants. This type of business is favorable in African countries with a stable economy such as South Africa, Egypt, Kenya and Nigeria.
5. Providing Startup Capital for Business Startups
Africa has many innovative and creative entrepreneurs willing to establish businesses but they lack startup capital. Providing startup capital to African entrepreneurs is a great idea with a ready market. African banks charge high interest rates for loans with short repayment period thereby discouraging local entrepreneurs from borrowing money. All you need to do is to study the market and establish the market needs. However, this is a risky business and hence you will need to establish ways of ensuring that startup loans you give to your customers are used for the for the stated purpose. Also, you need to liaise with loans regulatory bodies to secure your money.
6. Films and Video Production
Africa has talented and creative actors and since the population consists of a significant majority of the youth, viewers are many. To venture in to this business, ensure to produce high quality films with quality pictures. Many African actors travel across the continent to seek high level services. Movies produced in Africa have made a big hit in the world. Some of the African countries where film and production business has a ready market include Nigeria, Ghana and Tanzania.
7. Real Estate
The demand for land near cities and small towns is overwhelming in Africa. Owning a piece of land is the most coveted investment. It is also the first priority for new employees. Buying a large piece of land and then subdividing it into small plots for resale will you earn you huge profits. This is a lucrative idea that you can be sure of good returns. Again, land does not depreciate while the demand is increasing each day. In Kenya and Tanzania, for instance, these businesses are doing well.
8. Taxi Services
This is a good business idea especially in big cities in Africa. A majority of high income earners prefer cabbies for long and short term journeys. Companies are also hiring cabbies for their senior managers instead of providing them with vehicles. Cabbies are known to pick passengers at the roadside but you can establish booking of cabbies using telephones. To succeed in this business, ensure high level of vehicle safety and also ensure that you pick clients at the right time. This business is suitable for cities and big towns.
9. Event and Party Planning
Every day, Africans are holding parties and partying. However, planning and organizing a party is very stressing especially trying to work out the required resources for the targeted people. There isn’t proper event planning and this creates the need for good planning since most people don’t want the stress of looking for the necessary materials.
10. Employee Training
The demand for trained employees in the job sector is extremely high. Majority of the graduates from the African universities need other courses to prepare them for the job market. This creates need for more professional training institutions. Some of the areas you can train people is in the front office operating and handling of money. This business idea is suitable in African countries with established education systems in countries such as Nigeria, South Africa and Kenya.
Vincent is an experienced journalist from Kenya as well as a statistician. He has a degree in Applied Statistics with computing from the University of Eldoret.