Africa, the Sleeping Giant: Limitless Potentials for Exponential Growth

On the surface, Africa may appear as a financial desert, with no conducive environment for financial and economic growth. The ground reality is entirely contradictory to this. The African continent is on the verge of explosive growth, with the demand for goods and services increasing at a rapid rate.

The population of the continent is over 1.2 billion and is projected to hit 1.7 billion by 2030. This automatically translates into a bigger market for global and local businesses to thrive. Moreover, more metropolises and cities are emerging as Africa heads fully into urbanization and industrialization. Therefore, there are numerous economic opportunities that can meet the rising demand for goods and services, improve infrastructure, increase employment levels, and reduce poverty on the continent.

In this article, we will explore avenues for innovation and investment that can facilitate growth and development for Africa and the businesses that operate there.

African countries are diversifying their economies.

These countries are trying to develop their economies by attracting foreign investment and creating the right environment for it. As a?result, they have become more open to foreign direct investment (FDI).

Africa has changed from being an originator of FDI in developing countries to becoming a destination for FDI going out of developed countries. In other words, Africa is moving from receiving FDI to making it. The region also needs to invest in its own human capital if it wants to attract more FDI and create jobs for its people. From the mid-20th century to the early 2000s, numerous African countries relied on agriculture, finance, and the exportation of oil and other fossil fuels to drive their economies.

·?????Now, various countries are venturing into the tech industry, renewable energy, entertainment and tourism, transport and communications.

·?????For instance, countries like Tanzania, Kenya, Senegal, Nigeria, and South Africa are investing heavily in entertainment, the energy industry, communications, and finance sectors, which has resulted in a steady growth of not less than 6% yearly growth for a country like Tanzania, according to Prof. Benno Ndulu, its central bank governor.

·?????Kenya and Rwanda are also taking the lead in technological innovation and creating opportunities in fintech and low carbon energy investment.

Africa has reduced barriers to intra-continental trade.

One of the hindrances to holistic continental growth was tedious and limited intra-continental trade. However, Africa has overcome this challenge by establishing an ambitious trade agreement, the AfCFTA agreement.

·?????The African Continental Free Trade Agreement (AfCFTA), which went into full implementation on January 1, 2021, creates a single continental market for goods and services.

·?????It also facilitates the free movement of goods, investment and human capital across the continent’

·?????Currently, 90% of products have a zero rate on import duty, which is a strategy aimed at promoting competitiveness and expanding access of domestic companies to the entire African market.

Innovations in the Health industry

It is no secret that Africa has a high demand for quality healthcare. In Nigeria, the most populous African country, the availability of healthcare professionals stands at a ratio of 1 to 10,000 people. The statistics are much less favourable in countries like Chad, Niger, and the Benin Republic.

·?????However, innovations like telemedicine have begun to reform the health industry on the continent. Spurred by the pandemic, telemedicine providers like Lafiya (Nigeria), Dactaria Africa (Kenya), OuiCare (Cameroon), Reebird (Ghana), and Dabadoc (Morocco) are solving the problem of access to quality healthcare in remote areas across the continent. Yet, this area is largely untapped as telemedicine still needs to cater to millions of Africans across the continent.

·?????The pharma industry is also being digitalised. To address importation problems, Afreximbank and Janngo, alongside international partners, created a digital purchase platform for medicine. Still, there are opportunities available for more collaborations like this, especially for West and East African markets.

Africa is veering towards sustainable and renewable energy.

The UN states that Africa has 117% more sunshine than Germany, which is the world’s largest producer of solar energy. This report is a minute testament to Africa’s vast renewable resources.

·?????Even though various African countries still rely on fossil fuels, some countries have begun to venture into the sustainable energy industry.

·?????Currently, Morocco is the leading African country in producing and utilising solar energy as this renewable resource provides 32% of the country’s energy supply.

·?????Energy projects like Akon’s Lighting Africa solar energy project and Ethiopia’s waste-to-energy plant are pioneer efforts in Africa’s entry into sustainable energy.

·?????If other African nations decide to utilise their renewable resources and pivot into sustainable energy, over $120 billion in investment opportunities will be available in the energy industry.

These opportunities above are just a few viable opportunities and platforms that can catalyse growth in Africa; you can read this article to learn more about avenues available for economic growth for companies and industries in Africa. However, certain aspects of the African economic and political landscape could impede growth and development.

Volatile nature of Policies and Regulations: Despite the continental free trade agreement, Africa still comprises diverse countries with distinctive policies guiding operations within industries. Often, the emergence of new national governments results in the overhaul or abandonment of existing policies and projects. This approach to governance could hinder development, as relevant policies and projects are discarded before they yield any progress.

Infrastructure Gap: ?The infrastructure gap in Africa is both an opportunity and an impediment to development in Africa. The lack of public facilities and amenities such as good roads, functional public services, electricity, and whatnot poses a serious challenge for progress. However, national governments have begun to take steps to close these gaps. In light of that, the problem doubles as an investment opportunity for companies in construction, energy, and manufacturing.

Final Thoughts

The African continent is entering its golden age of economic development and stability. With the right strategies, policies, and initiatives, the development and growth of the continent can be fostered and even expedited. Thus, the rapid urbanisation and population increase are gigantic opportunities for the development of Africa’s human capital and the expansion of business opportunities.

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