5 Most Profitable Businesses to Set up In Africa

It’s only recently that the world has understood the true potential of the business sector in Africa. We generally perceive this continent (the Great Sahara and the intriguing wildlife) as merely a part of a bigger and more profitable landscape.

Is Africa a Fertile Business Place?

It’s nothing short of a surprise when people learn about business opportunities in Africa. Yet, for some of them, the place is mostly perceived as a continent of underdeveloped nations where people struggle for the necessities of life.

While it’s not entirely false, Africa is fertile land for young and promising businesses. Especially in the recent past, the African economy has taken an upsurge thanks to the natural resources and the effort put in by entrepreneurs from diverse disciplines.

Land of Opportunities

As a result, Africa now presents numerous opportunities for aspiring entrepreneurs and business owners to step onto the field and make the most of the current situation.

Therefore, it’s time to act and plan out a business model. Moreover, don’t consider language or social barriers as obstacles to your business plans because you can always count on professional translation services for the African market.

In short, showing a proactive attitude is the way forward if you want to excel in the African business market.

African Economies are Growing Rapidly

Want to hear some more promising news? Six out of the ten fastest-growing economies in the world belong to Africa. Therefore, experts count Africa as a highly profitable region for business and a hotspot for future investments.

Modern entrepreneurs are eyeing different African regions to start their new businesses. But what are the best business options in Africa? It’s a valuable question, especially if you don’t have a business history in Africa.

In this article, find out the top business options you should consider making money in Africa.

E-Commerce Stores

Like most parts of the world, e-commerce is an emerging and probably the most rapidly growing industry in Africa. Moreover, its growth shouldn’t surprise anyone, given that most of us shop online for essential things.

So, why is it a profitable option in Africa? Because e-commerce gives you the convenience of buying from home, it easily attracts customers from everywhere. Especially in more developed infrastructures like Senegal, South Africa, and Nigeria, e-commerce platforms have high chances of flourishing because the buying power is gradually increasing.

If you want to set up an e-commerce business and excel in it, here are some essential guidelines to follow:

● Get yourself an e-commerce platform

● Arrange the online inventory for the store

● Make sure your product packaging meets modern standards.

● Promote your e-commerce business through different channels like social media and websites.

A Word on Ecommerce Platforms in Africa

Finding a suitable e-commerce platform for your target audience is a critical decision. Now, it’s easy to get confused because there are numerous options in Africa.

While platforms like WooCommerce and Magento are ever-green platforms for cross-border clients, here are some of the top e-commerce platforms to help you target the African audience.

● If you’re based in Nigeria, Rwanda, Cameroon, Tanzania, or Egypt, go for platforms like Jumia and Mall for Africa.

● For the South African market, platforms like Takealot and Zando have been more popular. While Zando is more fashion oriented, Takealot focuses on gaming, books, electronics, etc.

● Konga is another popular platform. They call it the Amazon for Africa. It introduced KongaPay to resolve online payment problems in Africa.

● If you want to sell outside Africa, Kilimall is the right option for you. It deals in electronics, books, Fashion, Accessories, and more. There’s also a mobile app for it.

Fintech Businesses in Africa

Financial Technology is another fertile field for many African regions. These businesses help with technological upgrades in the finance sector, so it has applications in financing and banking. In recent times, Fintech has been reported to be one of the most profitable businesses in 2020.

In Africa, the Fintech industry grew 60% from 2017 to 2019. There were 77 Fintech startups in 2019 alone, which raised more than $107 million that year.

Moreover, the Fintech industry has already doubled its numbers from 2020 in the first half of 2021. It speaks volumes about the potential of Fintech services in Africa.

The Hot Regions for Fintech

So, what’s the ideal marketplace for Fintech startups in Africa? South Africa, Nigeria, Egypt, and Kenya have the most established Fintech systems on the continent.

Experts termed Morocco, Uganda, and Rwanda as the markets to watch for, as they can turn into Fintech giants if the industry continues the current stream.

Solar Power

Most African regions get abundant sunlight for more than three-quarters of the year. This means that utilizing a natural resource for energy is an excellent option for a startup. When you combine it with a lack of electrical power, there is no reason why a solar power setup should not prosper in Africa.

One of the great things about a solar power setup is that it becomes virtually free and sustainable. So, if you have the right resources like solar panels, expertise in technology, it’s a great place to start this business.

Many companies have already seized the opportunity in the solar sector and provide clean and sustainable energy in regions like Kenya and Nigeria and many rural areas of the continent.

Given that more than half of Africa cannot access grid supply, Solar energy seems just the right solution, providing a sustainable means of electricity for the rich and poor.

Essentials to Target in the Solar Sector in Africa

One of the things we can learn from the top solar companies in Africa is how to present your services to customers. It’s not just the solar panels or a power generation system. There are several other services and products you can add to your packages. Here is a quick look.

Solarpak is an African company based in Ivory Coast that offers a backpack solution for solar energy. It provides a bag with a solar panel, a rechargeable battery, and an LED lamp. It targets the basic needs of an individual, so the marketplace is quite vast.

You can also add service solutions such as repairing and maintaining solar panels to your business model. This way, you can target both sales and service industries in the solar sector.

Targeting the Marketplace

Since your business can’t be entirely online, you will need more locality-oriented marketing for this. Generally, rural areas are more energy-deprived, and locals are less technology-literate than those in the urban regions.

Therefore, understanding their needs and talking to them in their language is essential. This is where translation services for the African market become handy. African language translation service providers can present your packages and ads in your language and translate them into the local language.

Waste Management Services

Given the size of the continent, it is bound to produce massive waste daily. Unfortunately, Africa somewhat lacks waste management facilities, so the authorities either burn, wash away, or landfill the waste. Of course, it poses a significant threat to the environment and the ecosystem in Africa.

As a result, some aspiring business owners in Ethiopia and South Africa have taken a step forward in resolving the issue.

These startups are converting waste into something useful. For example, a South African company Agriprotein provides services for turning trash into animal fodder.

Likewise, an Ethiopian startup provides energy generation services from waste. Estimates suggest that by the year 2050, the African population will grow by 40 percent, so waste management projects also need to increase substantially.

Luckily for Africans, getting rid of waste also presents a source of high earning because it’s still an underdeveloped business niche.

What’s the Right Waste Management Marketplace in Africa?

The waste management business is a service to the environment and the people and a profitable endeavour for the future. Given that waste is a common problem for everyone, the marketplace is quite vast throughout Africa. However, some significant startups come from Nigeria, Ghana, Uganda, South Africa, Kenya, etc.

Transportation/ Automobile Business

A good percentage of rural Africans migrate to the urban regions for better job opportunities and education. Understandably, it raises the urban population figures and the need for sustaining and providing facilities like transportation.

So, the demand for transportation and car dealers also increases. Some estimates suggest that African car sales could touch 10 million in the next few years. However, with the current automobile manufacturers, it will be hard to achieve these numbers.

To achieve this objective, there is a need for more manufacturers in the region. As a result, countries like Egypt, South Africa, Morocco, and Algeria have established more assembly plants.

Not only this but multinational automobile firms are looking to invest in Nigeria, Ghana, Namibia, Angola, and Ethiopia. So, becoming an automobile dealer in these regions can turn out to be a profitable investment in the longer run.

Some Variants in the Automobile Sector

While this is an excellent option in the African automobile industry, there are other variants too. For instance, the increase in car sales means that there will be more need for repair and maintenance services.

Likewise, you can also look for car accessory businesses, denting, and painting services that are essential for any vehicle on the road.

How to Tackle the Language Barrier While Setting Up a Business in Africa

Let’s say you’ve found the sweet spot, and you know what business model to set up. However, language is a common barrier while setting up a business in a region like Africa.

It’s not only that businesses were scarce in Africa, but the inability to communicate also played a key role in limiting further expansion. As a result, even if your business seems promising, there is no guarantee that you can expand at a reasonable rate if you don’t resolve language problems.

Therefore, it’s good to opt for African language translation services because it allows you to communicate more effectively with the local market.

Setting up a business in Africa can be a profitable investment. While there are many options and marketplaces, the top five possibilities we discussed here have a promising future.

If you’re an African local, it can be much easier to start things off because you know the local practices and languages. However, if you’re coming from outside Africa with a business aim in mind, make sure to use reliable translation services for the African market to help you understand the documentation and marketing procedures in your targeted region.