The future of business in Africa is a conversation starter to explore the various possibilities for business in Africa and it is in no way exhaustive. Africa is a continent that is replete with so much opportunities. The full capacity of Africa has not been reached. The continent is endowed with human capital, knowledge capital, and natural resources—discovered and undiscovered. Despite all these resources, Africa as a continent has its challenges that has become limiters preventing the continent to rise to its full potential. My goal for starting this discussion on Oaekpost is for us to start exploring our strengths, our weaknesses, our opportunities, and threats as a continent. The goal of this conversation starter serves as an opportunity to weld the minds of the collective nations towards the greater good of Africa. Without further ado, let us start to delve into this discussion as I share some quick facts about the future of business in Africa.
Huge Business Opportunities due to Growing Economies
The future of business sector in Africa is very bright since Africa is home to many emerging markets that provide a secured market for the large-scale production of goods and services. The populations in African nation are growing tremendously providing a suitable place for the large investments of industrial commodities. Africa is home to more 54 nations which have significant potential to support business. Some of these nations are however classified as developing countries. Statistics indicated that Africa had more than five countries ranked among the most vibrant economies that are readily growing. Among them, Ivory Coast and Tanzania registered the highest figures in terms of economic growth with 8.5 percent and 6.9 percent respectively. Therefore, such economies provide a good place where prominent businesses could blossom. In addition, these countries with highest growing economies indicates that the people have relatively better standards of living, which shows that such people can provide markets for various commodities that might be perceived to be luxuries to people in extreme poverty.
Unlimited Investment Sectors in Africa
As stated above, Africa is an emerging market with investment opportunities in numerous fields. For instance, technology is been embraced but has not been fully acquired by all African countries. Therefore, this is a good opportunity for investment and growth in these sectors. Technological investments may include innovation and development in the production sector, telecommunication as well as agriculture among others. Africa is not fully covered by communication networks. Hence, a venture in this filed would be embraced overwhelmingly by the people. Additionally, most people in Africa depend on Agriculture. Many countries depend on Agriculture as a go-to sector for foreign exchange in other to sustain their economic budgets. Mostly, large-scale production of cash crops such as coffee, tea, tobacco, and cotton provides a huge ancillary market for agro-related products such as machinery and pesticides.
On the other hand, the business is expected to improve considering that some sectors, such as the industries and mining sectors, are not fully developed. Many African nations have rich mineral deposits which creates enough background for investments in mining and processing industry. Industrialization have enabled the spread of electrical power to towns and hinterlands of different nations. The expanding electrification projects creates opportunities for large scale investments in industries since power distribution provides an advantage of manufacturing industries to power their large-scale production equipment. More so, the development of infrastructure has enabled transportation of raw materials as well as produced goods to the markets. Therefore, business in Africa has enough factors of support in terms of a ready market as well as unexploited opportunities. Moreover, African nations that are characterized with stable governments and a democratic rule of law and governance show a great promise for advancement. Such stability ensures that there is peace and freedom to execute business operations in the countries such an advantage. This insinuates that the future of business in Africa is a ripe cherry ready for the picking by the various nations that make up the continent, ceteris paribus. It also provides an opportunity to attract foreign investments in the sundry body politic of nations in Africa.
Threats and Concerns
However, despite the strengths and opportunities that abound for the continent of Africa, there are threats that hope to sabotage the future of business in Africa. First, there is a rise in many illegitimate and perilous groups fighting against governments. This creates uncertainties for the businesses in those African nations. It also discourages multinational national entities (MNEs) from seeking to invest in many African countries. For instance, Al-shabab in Somalia has killed the economy and business in that countries while tension and uncertainties have been increasing in the neighboring nations such as Kenya. More so, M23 in DRC Congo, Boko Haram in Nigeria and other resistance groups in northern Africa countries such as Libya creates uncertainties for investors in these nations.
Second, Africa faces a famine of effective leadership. Many nations in Africa are plagued by corrupt leadership. Rather than having a servant leadership mentality that seeks to serve, many leaders are opportunists and looking for ways to fill their financial coffers. This snowballs to the third point of variation, which is the lack of basic amenities (e.g., good road network, portable water, electricity, etc.). In the absence of the basic amenities, business are impacted. It also discourages MNEs from seeking to invest in those African nations. This is a direct effect of failure in ethical leadership that robs Africa of such opportunities. Fourth, poverty ravages many African nations as a result of the absence of good and ethical leadership. This robs African nations of focus from providing the basic amenities. This affects businesses—local and international. These variations and more are all interconnected.
Generally, Africa is a good business hub and investors should embrace these emerging markets. With a lot of unexploited minerals and lack of enough technology, Africa provides ready market for machineries as well as other products which are not produced locally since many nations in Africa depends on exported finished goods. Hence, Africa is an opportunity-hub. If the continent focuses in addressing the above threats and concerns, we will forge a continent that will rise like a phoenix from the ashes of inefficiencies. Let’s discuss.