In Africa, problems abound. But only entrepreneurs can see the opportunities embedded in the challenges. DAMILOLA TIAMIYU lists some business opportunities in the continent
There is a popular assertion that more millionaires were made during the Great Depression than at any other time in American history. However, the most common iteration of this saying, according to Google searches, seems to be, “It’s a little known fact that more millionaires were made during the Great Depression than at any other time in United States history.”
If a lie could be put on the above assertion, but not in the fact that opportunities abound in every challenge. This was affirmed by Albert Einstein when he said, “In the middle of every difficulty lies opportunity.”
Africa is stricken by many problems that entrepreneurs can capitalise on. There are problems of food, shelter, clothing, healthcare, electricity and education, among others. Trying to solve any of these problems is an opportunity to make wealth, moreso as unemployment is one of the major problems of African nations.
The rate of unemployment has increased during last few years due to economic challenges. This problem has been widely discussed, yet there seems to be no permanent solution yet.
According to Trading Economics, youth unemployment rate in Nigeria decreased to 36.50 per cent in the third quarter of 2018 from 38 per cent in the second quarter of the year. It had averaged 23.63 per cent from 2014 to 2018, before reaching the all-time high of 38 per cent.
The former Minister of Labour and Employment, Dr. Chris Ngige, was quoted as saying that Nigeria’s unemployment rate would hit 33.5 per cent by 2020.
His words, “It is a worrisome status as the global poverty capital (World Bank, 2018); and concomitant high prevalence rate of crimes and criminality, including mass murders, insurgency, militancy, armed robbery, kidnappings and drug abuse, among others.
“As if this situation is not scary enough, it is projected that the unemployment rate for this country will reach 33.5 per cent by 2020, with consequences that are better imagined, if the trend is not urgently reversed.”
Advisory partner and chief economist at PricewaterhouseCoopers, Nigeria, Andrew Nevin, described being young in Nigeria as very challenging. “Graduates have a great deal of difficulty in getting established. People that didn’t go to university, who should be getting vocational training, are not getting it. They’re not getting into formal employment. Given the scale of Nigeria, it’s a challenge not just for Nigeria, but also for Africa and the whole world.
“Oil, over the last 30 years in this country, has meant people have taken their eye off other industries. We lack diversification. The good news is that everyone recognises it as a crisis. People are discussing youth unemployment,” he said.
Creating jobs was one of the key issues discussed at the last electioneering. The Federal Government of Nigeria designed the N-Power programme to drastically reduce youth unemployment. The focus is to provide our young graduates and non-graduates with the skills and tools to advance from unemployment to employment, entrepreneurship and innovation. Despite, there has been little or no change in the unemployment rate; hence there is more to be done.
Below are some of the lucrative business opportunities in Africa:
Branding African foods for export
Exports from Nigeria are very lucrative and can catapult the country’s economy overnight. Why we are not exporting enough products is a mystery.
Nigeria exports mainly crude oil and a handful of non-oil products. This is despite that exporting non-oil products is not too difficult. All you need is to have a company that is export-ready.
In recent years, uniquely African products like shea butter, spices, moringa seeds and leaves, local foodstuff, tropical fruits and nuts have become promising business opportunities at the international market. These products present unique opportunities for African entrepreneurs and businesses.
Africa is often referred to as the ‘Sun Continent’. It is among the three continents on the equator. Despite the large solar potential, solar power in Africa’s energy sector is still very low.
The continent’s solar power potential can supply electricity to Europe and other parts of the world.
To have an edge in an already saturated workspace, Africans are investing in higher academic qualifications to enhance their curriculum vitae. Institutions outside Africa are benefitting a great deal as a result.
The recent evolution in the virtual education space is one the most interesting business opportunities to look out for in Africa.
Fashion and apparel
The fashion and apparel industry presents a lot of potential job creation.
Demand for African textiles and designs is increasing globally, and African patterns are gaining recognition as truly fashionable and iconic pieces. International fashion houses are integrating more and more African influences in their latest collections.
Recently, Nike, the global sportswear giant, collaborated with a local Nigerian designer for a special edition jersey that was inspired by adire, a traditional print from Nigeria. The design reportedly sold out within 14 hours after it was released on Nike’s website.
Business Process Outsourcing is a subset of outsourcing that involves contracting operations and responsibilities for a particular business. The benefits are almost endless, but it always boils down to saving time and money.
More businesses are outsourcing tasks these days because technology has advanced to the point of professionals being able to work from anywhere in the world, coupled with the availability and accessibility of extremely qualified professionals who left the corporate world.
Film production and distribution
The current growth rate of the African film industry clearly shows its potential of becoming a multi-billion dollar market in less than a decade. The industry is currently the second largest employer in Nigeria (where the movie boom started) and enjoys a fast-growing audience across the world.
Although African films have been produced since the 1960s, the introduction and growth of affordable digital filming and editing technologies has caused an explosion in video film production.
Big players like Netflix entering African’s film industry will make film production and distribution a money-spinner.
The impact of urbanisation and increasing population rate makes the real estate industry a market for investors and entrepreneurs for a long time. The apartment hotels segment is new to the industry.
Apartment hotels cost less than the average hotel.
Mr John-Paul Iwuha said, “The rise in global business travel, a massive market that spends more than $1.2 trillion annually, is the big trend responsible for the growing demand for apartment hotels in Africa.”
As corporate mobility and the number of international job assignments rise, and more multinationals continue to push into emerging markets, the demand for accommodation by business travellers and expatriate workers in Africa becomes more sophisticated.
In 2015, there were only 8,802 serviced apartments in 102 locations in Africa. By 2017, the numbers increased to 9,477 serviced apartments in 166 locations. This shows the rising interest in the sector, according to the Global Serviced Apartments Industry Report.
So far, cities like Nairobi, Lagos, Accra, Addis Ababa, Abidjan, Dakar, Dar es Salaam, Abuja, Johannesburg and Cape Town are experiencing marked growth in the emerging apartment hotel sector.
With diseases like malaria and typhoid fever, pharmaceutical companies generate a lot of funds from manufacturing drugs. But the less-privileged still die as a result of not having enough to buy drugs.
Entrepreneurs came out with mosquito-repellants in daily needs like soaps and cream. Technology and creativity can be used to solve the continent’s healthcare challenges.
Digital financial services
Broad acceptance of digital payment platforms also benefits stakeholders beyond the payment industry. In Kenya, for example, many start-ups are attempting to incorporate M-Pesa as part of their business models. Governments also gain when adopting digital payments, which not only reduce their payment costs but also increase transparency.
Clearly, there is significant latent demand for digital payments in many African markets, and widespread consumer acceptance of mobile-communications technology is highly encouraging.
The music industry has had a gloomy outlook for more than a decade. Years ago, MP3 players and iTunes all but destroyed the traditional album, and more recently even permanent digital downloads began to see a dip in sales.
So, it appears the music industry is finally seeing a change for the better. Despite more traditional formats dipping, streaming is up and its potential suggests good fortune for artistes and the industry as a whole.