A few years ago, Africa wouldn’t be looked at as a potential business hub for an entrepreneur. What has changed since then, has not much to do with the shift in its resources or even its population. Matter of factly, it has more to do with how people have now started looking at Africa’s numerous problems as a gold mine of opportunities. It only makes sense that a place that needs problem-solving is a better bet for express growth of a startup than a place that has it all weeded out. Besides this, the rapid growth in the number of middle-class families and acres and acres of unused (Fertile) land seems to have been attracting investors across the world. Well established corporate giants like Coca-cola and Heineken have already taken advantage of this continent and reaped its benefits in Abundance. But let’s emphasize on what exactly makes Africa an ideal region to start your business.
Ascending Africa
Africa is a 1.2 billion people market and this number is expected to double over the next few decades. The continent has seen a gradual yet notable transformation in the last 20 years. More often than not, business leaders tend to overestimate the challenges of doing business in Africa and underestimate the size and potential of the African continent and hence miss out on one of the greatest 21st-century growth opportunity.
The Emerging Middle-class
Since the time Apartheid has been eradicated completely, Africa has seen enormous economic growth and the number of black middle-class has expanded rapidly. The acceleration is a true sign of hard-earned progress and promise. This only means that the purchasing power of the economy as a whole has risen with abundant opportunities for entrepreneurs to start their business in Africa.
Too many problems, too few players
The most basic necessities such as water, electricity, housing, infrastructure and waste management are simply not sufficient and enough to cope with the growing population of Africa. Here comes in massive opportunities to set up business in Africa to eradicate this problem, as companies would essentially be filling in this wide gap between rising demand and inadequate supply.
Opportunities in Africa that you DO NOT want to be missing out on:
Logistics
Many people in Rural Africa today, wish to migrate to the Urban areas due to which bigger cities are being subjected to more and more congestion. Looking at this from a business perspective, this is indeed an inconvenience that requires immediate remedy. Undeniably, there are already existing players who have entered the continent to make use of this opportunity but have a rather long way to go to fully tackle the problem. Filling the gap by offering services of door-to-door delivery, for instance; could most definitely save people a whole lot of time and energy to move around shopping.
FinTech
An industry with large scope to set up in this continent to tackle one of their desperate current requirements is Financial Technology. Here’s why. In most African countries, access to financial services is very poor. So much so that only about one in five adults has a bank account, and most transactions are still done in cash. TopCheck and SnapScan are Fintech companies that are doing brilliantly in South Africa but haven’t been able to mark their footprints in many other countries.
HealthTech
Did you know that only a handful of countries in the whole of Africa have access to basic health care? It is indeed a precarious situation with less than one doctor per 20,000 persons in some African countries like Ethiopia and Tanzania. HeathTech and Health care, in general, has a huge scope in a region such as this and any business in and around the field is sure to do wonders.
If Africa is indeed such a great market, Where do I begin?
If you’re having trouble assessing which country to target first in order to eventually create a footprint in this massive opportunity continent, South Africa would be most ideal to start off with for varied reasons. Firstly, South Africa is a very economically sound country in the whole of the continent, the most in fact. Moreover, it is one of the most desirable tourist destinations in the world. Besides being economically stable, South Africa acts as a gateway to the rest of the African countries. Sharing borders with Namibia, Botswana, Zimbabwe, Mozambique, Swaziland and Lesotho, its well-developed road and rail links provide the platform and infrastructure for ground transportation deep into sub-Saharan Africa. Being a regional leader and a member of the BRICS collaboration, South Africa indeed provides for an excellent location to start your business and spread across to the rest of this opportunity-flooded continent.
AUTHOR:
Kishore Chand; Partner at Gilda Venture Capital and the founder of two online businesses; he is enthusiastic and passionate about the startup eco-system in India and the Middle East. He has invested in several idea and early-stage companies and has influenced investments in nearly 50 companies through his network. He is constantly looking for startups, who have the potential to be game-changers and create enormous value for stakeholders.
