Africa is considered an emerging market; although a lot of people tend to have various reasons why it is termed an emerging market. I agree that it is an emerging market because Africa is dense with a lot of problems and you know what they say, “”.
Problems in Africa can be solved by African startup entrepreneurs and already established entrepreneurs. And just because I always give information with facts, read what Timbo Drayson said about startups:
“An Important learning from my previous startup was that it is not the idea that counts, it is the underlying problem that you need to focus on” – Timbo Drayson
Investors will normally ask the question where I can invest?
Just before I answer the question, we can look at startups from three major perspectives:
Capital
Labour
Productivity
An investor coming into the African market comes in with capital and the other two factors productivity and labour have huge trends in Africa and the combination of the three factors not only lead to an increase in the economic growth, but they also lead to money in an investor’s pocket.
There are so many reasons why Africa is a fertile land for startups but I will be focusing on these reasons:
See Also: Best Ways Any Startup Can Use To Attract Investors
• Labour
• Internet
• Agribusiness
• IT opportunity
• Followup capital
• Transportation
• Entertainment
Increasing Population
Africa is projected to have one highest population in the world by 2030 notwithstanding the migration of thousands of Africans because of so many problems the continent encounters; these problems have also attracted an influx of investors who see Africa as a land filled with great opportunities and fertile soil for startups.
Where there is a problem, there is a solution, and where there is a solution, money follows.
With the above prediction of the population of Africa, solutions provided for the increasing population leave investors cashing out as rewards for solving those problems.
Internet
The internet is thriving in Africa mostly because of the growing population of youths and the increasing penetration of affordable mobile phones especially mobile phones with internet access. A business that is internet friendly will definitely thrive in the African market.
Africans have not fully utilized options that the internet provides investors who are able to invest in internet related ideas or businesses.
See Also: Nigeria Gains More Internet Users
Agribusiness
Agribusiness is one of the cash cows in Africa not only because Africa has a high number of arable lands, but Africa also has an increasing population.
According to the prediction by World Economic Forum, the population of Africa is set to soar to 1.7 billion people and these simply means the increasing population leads to more mouths to feed and currently Africa is unable to meet the local demand of its people.
It is a no brainer that Aliko Dangote, the richest man in Africa invested one billion dollars in Agribusiness.
Information Technology
Information technology is a sector that has not found a strong footing in Africa as a continent.
The software outsourcing firm Accelerance reported that Africa has emerged as the next frontier in software outsourcing pointing to the continent’s growing young population. This report reveals the fertile nature of the IT sectors which will give rise to successful startups.
Follow-up Capital
One of the pressing problems with African startups is capital. Most times, entrepreneurs surmount the hurdle of sourcing for startup capital but do not succeed in sourcing for follow-up capital which eventually leads to a flop in the business.
Foreign Angel investors who give more value and structure accompanied with follow-up capital is definitely going to cash out big time in the African market.
Logistics
The African content is a great absorber of logistics. Just as one of the prevalent issues in Africa is the organisation and transportation of goods and services to customers, an investor in this segment of the market not only cash out but solve the major issues of startups in Africa.
Entertainment
The African entertainment industry is one of the emerging markets in Africa with the production of blockbuster movies like Lion Heart, big labels like Mavin record and lots of big entertainers breaking the global ceiling, the entertainment industry is one of the fertile grounds with a startup waiting to be built.
Africa has lots of potentials for startups and we are not just talking about startups for exchange of commodities, we are also talking of startups for services that will not just solve the African problems but also lead to an increase in the economic growth of Africa with a high rate of return of investment for investors.
Chisom Okeke
Chisom Okeke, popularly known as “Somly” is a graduate of Accounting from the University of Benin, Benin City. She is a phenomenal writer and an “Agripreneur” whose focus is to change the narrative of the agricultural sector by providing timely agricultural information and opportunities available in the agricultural sector. She is also a virtual assistant and the anchor of Somly Writes. You can connect with her via Social Media, Facebook – Okeke Chisom; Instagram – okeke_somly; Twitter – somly
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