By
Boniface Okanga, Adri Drotskie and Jennifer Davis Adesegha
Johannesburg, South Africa, 25 March 2026
To analyse and identify the opportunities emerging in the African markets, ICATTH’s (Industrialization, Construction, Agriculture, Tourism, Technology, Transport & Health) model for sectorial analysis is used to diagnose and identify the opportunities emanating from the African business sectors like industrialization, construction, agriculture, tourism, technology, transport and healthcare.
Industrialisation
Most of the African governments are increasingly recognizing that it is through industrialization that they would be able to stimulate economic growth and development. In effect, most of the governments have been creating industrial economic zones to lure local and foreign direct investments into the designated economic zones. Quite often, most of the industrial economic zones are designed not only to aid designated businesses benefit from tax reductions or waivers, but also to facilitate ease of business development and establishment. This is rendered possible by reducing or eliminating completely the bureaucracy required in the development of such designated businesses in terms of documentation, ease of land acquisition and accessibility to the required financial resources. In South Africa, this trend is reflected in the development of COEGA industrial economic zone and OR Tambo industrial economic zone. Whereupon establishment, the designated businesses do not only gain from easy access to land acquisition, but also ease of access to the required financial resources from the development financial institutions (DFI) such as the Industrial Development Corporation, Ithala Bank or the Development Bank of Southern Africa. As in Uganda, the government’s commitment towards encouraging and facilitating industrialization is reflected in the establishment of Namanve Industrial zone. In these industrial zones, the government has created a system that renders it possible for the designated businesses to easily acquire the required land as well as the financial resources from the development financial institutions like the Uganda Development Bank (UDB) or the East African Development Bank. The implications are latent in the fact that for both the local and foreign businesses, these changes in government policies that support industrialization have caused reduction in red-tapes as well as unnecessary bureaucratic tendencies that often affect the development of different new businesses.
It is not only such trends that offer enormous business opportunities for local and foreign businesses, but also the fact that as most African governments strive to promote industrialization; investments in the required sources of energy have been prioritized. These trends are evident in Uganda that following the expansion of Owen Falls Dam in Jinja, the government also committed significant funds towards the development of hydro-electricity at Bujagali and Karuma dams. As in South Africa, the government has also been committing enormous resources towards the development of different sources of energy fossil fuel, biogas, solar, gas as well as the development of nuclear enrichment plants. In Algeria, Egypt and Tunisia, it is also evident that the Algerian as well as the Egyptian and Tunisian governments are investing quite significantly in the development of different sources of energy to bolster industrialization. All these tend to offer good investment environments for the reason that since energy is the pillar of industrialization; its availability renders it easy for businesses to thrive.
Reliable sources of energy leverage operational efficiency to lower the overall operational costs. This impacts positively on a firm’s improved competitiveness as derived not only from lower costs passed to customers in terms of lower prices, but also efficient and better quality of customer services. Considering the increasing adoption of global production as a strategy for diffusing competition heat from major global competitors, countries that develop business environments that lower costs and bolster business efficiency may tend to turn into magnets for most of the contemporary businesses. The fact that most of the African governments are aspiring to create such business conditions implies a lot of good business prospects and bright future exist for most of the contemporary African businesses. However, the initiatives for creating more attractive African business environments have not only been directed towards the development of more reliable sources of energy, but also the development of better skilled and cheaper human capital.
Increasingly, some of the less mineral rich countries such as Rwanda, Malawi, Zambia and Uganda have been investing in the improvement of the quality of their labour forces. This has contributed to the development of more creative and productive human capital that offer markets for different products as well as affordable and cost-effective labour for most of the existing and emerging African businesses. Cheaper labour influences the overall cost variables per unit output and subsequently the cost competitiveness of the business in the international marketplace. With most of the African governments investing in the education of skillful graduates, this offers enormous business opportunities for future businesses that in case of entry into Africa, the usually deterring costs of expatriates will certainly be avoided by taking advantage of the enormous talents and skillful graduates that are emerging from most of the African universities. However, it is not only such trends that are rendering the African markets more attractive, but also the development in the construction sector.
Construction
The rising level of construction activities in the African markets offers enormous business opportunities for the contemporary African businesses. For the emerging new businesses, thorough analysis would reveal new opportunities for new businesses. As for the existing businesses, modifications of the existing businesses through diversification would certainly unlock enormous business opportunities. That implies as some of the existing businesses struggle to instigate the desired pace of growth, diversification into the construction and building-related business ventures would certainly unlock new lucrative business portfolios to spur increased revenues. It would also insulate the struggling existing businesses from the existing industry uncertainties and risks of failures. This increment of the construction activities is attributable to three main factors that include; increasing governmental investments in critical infrastructural projects, private investments in the development of commercial and residential structures and the increasing demand for housing by the increasingly richer African middle class. As governments seek to create favourable investment conditions, increment in infrastructure development expenditures by most of the African governments is certainly unlocking enormous opportunities in the construction sector. At the peak of the infrastructure development priorities has been investment in the development of relevant interlinking roads, rails and ports. Interlinking roads, rails and ports are increasingly being perceived by several governments as critical for improving the overall attractiveness of the investment conditions in different markets.
Yet, as governments adopt such approach, businesses engaged in the construction businesses are exposed to enormous opportunities that can be exploited only if businesses adopt the right business approaches. These opportunities are presented in the construction activities such as the construction of the south-northern corridor in the SADC (Southern African Development Cooperation) region. The South-Northern Corridor that will link about ten countries in the SADC region will span from the coast of Durban via Mozambique to Tanzania. Despite the fact that it will improve the flow of activities and movement of people in the SADC region, it also illustrates the enormous business opportunities that such mega-infrastructural projects offer for the businesses in the region and Africa in general. Just like in the SADC region, in the Democratic Republic of Congo in Central Africa as well as in Algeria in North Africa, the Algerian and the DRC governments are also significantly involved in the development of different road and ports’ infrastructure to bolster free movement of goods and people in Northern and Central Africa. These infrastructural development projects are further often accompanied by investments in expansionist programmes that aim to expand the capacity of most government departments. This is attributable to the fact that with most of the infrastructures for different government departments inherited from the colonial governments, capacity to handle the demands of the ever increasing population in most of the African countries has often been a challenge.
In effect, enormous business opportunities have also been emerging from the extensive infrastructural projects that most governments have been engaging in to improve the capacity and capabilities to deliver certain critical government services such as healthcare, education, telecommunication services or other socio-economic services such as security and social-security services. These trends are quite evident in Uganda, Kenya, South Africa, Tanzania and Malawi where the respective governments of such countries are engaged in different construction activities to either expand or improve their capacity to manage and deliver different socio-economic services such as education, healthcare and social-security services. These construction opportunities are further boosted by the increment of the construction activities in the private sector.
Increasing demands for commercial and business premises in different African cities is causing significant increment in the number of private businesses that are engaging in the construction of business premises such as shopping malls. These business opportunities are further catalyzed by the rise in the demand of the population for quality residential houses. This is attributable to the fact that as the number of well-resourced middle class population continues to increase across the African cities; it is not only quests for different quality products which is instigating a boom in the construction of business premises. Instead, the quests for better quality residential premises are also causing most of the African middle class to invest in either the direct construction of quality new residential houses or in the purchase of the existing residential buildings. All these have instigated rising demand for different residential premises. Yet, as such opportunities increase; it is not only the construction companies that benefit, but also those offering support services such as electrical installations, water and sanitation services or supplies of building materials. In other words, these enormous business opportunities that are presented by the African construction industry are further boosted by the enormous opportunities in the agricultural sector which is emerging across the African continent.
Agriculture
The agricultural sector offers enormous opportunities that are yet to be exploited by different businesses. This is attributable to the constantly increasing African population with the effect that if the present trends are to go by, then, the opportunities in the agricultural sector will continue to blossom until 2100 and beyond. Such a view is accentuated in the World Population Fund’s (2016) prediction that starting from 2050 to 20100, the African population will continue to rise as those of the Asian, North America and European countries will continue to decline. As Africa’s population rises, investment in different agricultural activities will be of essence for increasing food production to feed the rising African population. This rising population will cause significant increase in the demand for food to generate enormous opportunities for the businesses involved in the production of different food stuffs. These opportunities will not only arise for farmers, but also for the businesses engaged in the development and manufacturing of different food and beverages products.
Such opportunities will also by catalyzed by the rising demand for different agricultural equipment such as tractors and graders. Demand will also increase for agricultural inputs such as genetically modified seeds and insecticides or any other medical drugs for animals such as cows, goats and pigs. These suggest as some of the businesses invest in the production of genetically modified seeds, others will also have to invest in the development and production of different insecticides and animal drugs. Yet, as the agricultural sector will adopt more modern approaches to support large scale farming, opportunities will also emerge for businesses engaged in the construction of agricultural facilities and infrastructure such as dip, pigsty, fences and water systems. These opportunities are further boosted by the opportunities emerging from the African tourism industry.
Tourism
Most of the business opportunities emerging in the African markets are also linked to the enormous opportunities emerging from the African tourism sector. Tourism is emerging as the major source of earning as compared to any other sector. In Kenya that previously depended on agriculture, tourism is emerging as the major source of foreign exchange earnings. In the period between 2014 and 2017, tourism contributed about 40% of the Kenyan Gross Domestic Product (GDP) as compared to the agricultural sector that only contributed 20%. The same trends are also evident in South Africa which although was previously dependent on the earnings from the mining sector is increasingly recognizing tourism as the major contributor to the larger percentage of its gross domestic product. These changes in trends that highlight tourism as the major source of foreign exchange earnings herald the enormous opportunities that businesses can exploit from the tourism sector. To accomplish this, businesses will have to recognise that the opportunities in the tourism sector can be exploited by exploring the opportunities emerging from three main areas that include tourism development, training and development of the personnel in the tourism sector and marketing and promotion of African tourism. In terms of tourism development, opportunities are evident in the fact that although tourism is turning into the major source of foreign exchange earnings, it still remains largely underdeveloped in most of the African countries.
In most of the African countries, most treasured natural habitats are largely still underdeveloped and less-recognized or preserved as the major sources of tourists’ attractions. In effect, most natural habitats still face the challenges of human encroachments that destroy the natural habitats for the most treasured animal species or any other living organisms. Quite often, these challenges are exacerbated by poor government policies to facilitate effective protection and enforcement of the available legislations on the encroachers of the preserved natural habitats. Even if the protection of the natural habitats do not pose major challenges, major shortfalls of tourism development often still arise from the poor developments of support facilities such as hotels, restaurants and roads to major tourism destinations. These limit the optimization of tourism potentials in different locations across the African tourism markets. It also suggests that business opportunities may either arise from the activities that develop and preserve the natural habitats or from the development of support facilities in major tourism destinations. The development of the underdeveloped tourism activities can be undertaken by getting involved in the analysis and identification of the tourism activities that must be developed. These may require either identification of the most attractive cultures that can be developed and harnessed as the major sources of tourism attraction.
Alternatively, it may also require the identification of unique animal species that can be preserved in designated locations or the development and preservation of most attractive natural habitats that can be promoted as the major sources of tourism attractions. In other words, these may require thorough analysis to identify and develop what would be perceived as the major sources of tourism attractions. Even if opportunities are not emerging from the development of the actual sources of tourism attractions, opportunities can be explored from the extent to which business opportunities can be developed by developing tourism support facilities such as hotels or offering transport services to different tourism locations. Most African countries like the Democratic Republic of the Congo habour a lot of attractive tourism destinations. In most of the cases, either hotels in such locations are underdeveloped or travels to such locations cannot easily be reached through the use of well-developed transport facilities. That implies a business may either focus on the development of hotels that suit tourism needs or transportation. However, in most of the cases, challenges have emerged from the fact that even though hotels are not challenges, in most of the cases; challenges arise from the fact that most of the hotels are themselves not very attractive to tourists.
In most of the cases, most of the hotels in these African tourism destinations are designed in the ways that imitate the quality of services in western countries rather than reflections of African life. For most of the western tourists that aim to experience the African ways of life, this approach tends to affect their satisfactions with the quality of the hotels in most of the African tourism destinations. In effect, getting hotel structures and services designed and espoused in the ways that reflect the cultures and traditions in the designated tourism destinations would certainly delight most of the tourists as compared to imitations of the western ways that often do not offer new feelings and experience that the western tourists often search for. If the business does not aim to invest in the tourism support activities, then, the option would be to invest in the training and development of tourism personnel.
Tourism is a booming business, but the challenge of skillfulness of the personnel is still a major hurdle. In most of the cases, personnel that work for the tourism industry opt to do so not because they have chosen it as a career, but because they have failed to get absorbed into the industries that they trained for. This implies, in the tourism sector, there is often a challenge of skillfulness. This affects innovative approaches which are critical for developing thriving tourism businesses. To deal with this challenge, businesses aiming to join the tourism sector can therefore opt for training and development of tourism personnel as a business entity. Key areas for focus would be hotel and hospitality management, and integration of cultural and traditional values in tourism activities to entice the overall tourist experience and satisfaction. The other areas would require teaching and training personnel on innovative tourism businesses to aid the development of new tourism business concepts across the African markets. This would significantly reduce duplications that often cause increased rivalries that affect the growth and sustainability of certain tourism businesses. Nevertheless, as some of the businesses focus in such domains, others could focus on the development of tourism businesses that promote and market tourism. However, this would require the development and application of more innovative approaches to ensure that such a business thrives. This view is explained by the fact that of all the tourism sectors, this seems to be the most saturated. Most businesses tend to invest in the marketing of tourism rather than the development of tourism attraction destinations or activities. That implies instead of investing in the marketing and promotion of tourism, investment in tourism developments would be the most viable business approach. Nevertheless, besides the enormous business opportunities offered by the African tourism sectors, the other opportunities are emanating from the increasing boom in the African technological sector.
Technology
As Africa develops, the demand for better superior technologies is also continuously increasing. This suggests this increasing demand is unlocking enormous opportunities for the developers as well as the manufacturers of more superior technologies. This rising demand for superior technologies is explained by the increasing integration of technologies in governmental operations and the use of new superior technologies by businesses as one of the strategies for leveraging the overall operational efficiency. In terms of the demand caused by the increasing adoption of superior technologies, the opportunities are caused by the fact that as governments embrace new technologies, businesses engaged in the manufacturing and installation of superior technologies must be prepared to tap the enormous funds allocated in different government budgets for such projects. As governments strive to respond to different demands of the population, the adoption of superior technologies such as the electronic government information system has become essential for aiding governments respond to such needs and demands. These are often accompanied by the investment of sufficient funds in the establishment of more superior medical technologies to bolster the capabilities of different governments to deliver superior medical services. In other words, technology is increasingly turning critical for aiding effective performance of different governments.
At the municipal levels, the municipalities that do not believe in outsourcing of construction activities are increasingly investing in the purchase of their own construction equipment as well as waste collection and recycling equipment. These among others illustrate the opportunities that are emerging in the African markets for the developers and manufacturers of different equipment and technologies. Yet, as such opportunities emerge from the rising demand of government for different technologies; the other major sources of opportunities have been emerging from the rising demands by private sector businesses. Most of the businesses are increasingly demanding and integrating different superior technologies in their operations. Some of these trends have been reflected in the adoption of superior manufacturing technologies as well as investment in the technologies that leverage operational efficiency and the quality of customer services. Yet, as such trends reveal enormous opportunities for different businesses, the other opportunities have been emerging from the innovative businesses that some of the entrepreneurs have been able to extract from the emergence of different technologies around the world.
These innovative businesses have been reflected in the development of businesses such as Mpesa in Kenya and mobile money in Uganda. Mpesa uses cellular network technologies to facilitate the transfer of money between customers in different locations. Its use of cellular networks and mobile phones has rendered it possible to attract and capture a significant segment of the financial market. This is attributable to the fact that its reliance on cellular networks has rendered it to be more attractive to the largely rural population in most of the African countries. Mobile money that mainly operates in Uganda connotes the application of banking technologies that permits bank and non-banking financial institutions to facilitate the transfer or payment of funds between two or more individuals (Tumusiime, 2014).
The introduction of mobile money technologies to facilitate transfer of funds or payments between different consumers was permitted by the Uganda government in 2009. The decision was motivated by the need to fill the financial gaps that arose from the financial consumers that were unable to have easy access to financial payments due to distance in the rural areas or any other intervening circumstances (Aker, Boumnijel, McClelland & Tierney, 2011). The business model for mobile money involves partnership between mobile money operators and commercial banks to facilitate the accomplishment of the financial transactions that are legally limited to domestic remittances, basic retail payments and money storage services (Aker, Boumnijel, McClelland & Tierney, 2011). The growth of mobile money in the Eastern African region especially in Kenya (mpesa) and Uganda (mobile money) has been more successful as compared to any other regions in Africa. This is explained by the fact that empirical studies indicate that 9 years after its launch in 2009; over 18 million people were found to have already registered and actively using mobile money with an average of 46million transactions by 2018. The value of these 46 million transactions are stated to be about Uganda Shillings 2.1 trillion. This makes mobile money industry in Uganda one of Africa’s success stories of mobile money business. Nevertheless, these enormous opportunities induced by the changes in technological trends are further accompanied by the opportunities emerging from the changes in the technological trends in the African markets.
Transport
Enormous business opportunities that are emerging in the African markets are also linked to the rise in the developments in the transport sector. Most African governments are increasingly recognising that not much of economic growth and development can be achieved without investments in the relevant transport infrastructures. In effect, most of the governments across the African continents have been committing resources towards the development of interlinking roads, rails and port infrastructures. Such developments are evident in the commitments of the East African countries such as Kenya, Uganda, Tanzania, Rwanda and South Sudan to develop interlinking standard gauge railway that would improve the flow of goods and movement of people within the region. As on the otherhand, the government of the Democratic Republic of the Congo is also committing the required resources on the development of the interlinking roads to reduce the challenge of the poor state of roads that the Democratic Republic of the Congo presently faces.
In the SADC region, the construction of the South-North Corridor that will link about ten countries is also expected to boost trade and commercial activities within the region. Similar trends are also evident in Nigeria and Cameroon where construction of roads as well as the improvement of the conditions of the existing infrastructures have been prioritised as part of the strategies for boosting economic growth and development. These trends offer two main opportunities for the contemporary African businesses. The first set of opportunities arises from the increasing spate of construction activities aimed at developing transport infrastructure. This is attributable to the fact that as governments prioritise investments in the required transport infrastructure; opportunities tend to arise for the construction businesses as well as the suppliers of relevant materials such as concretes. It also presents opportunities for the manufacturers and suppliers of construction equipment such as tractors, trucks and graders.
Improved conditions of transport infrastructure tend to offer better conditions for doing business. Better roads, rails and ports tend to facilitate cost effective and efficient ways of moving goods from points of manufacture to points of consumption. These developments in the transport industry have also been accompanied by the development of systems and ports’ management approaches that render it easy for businesses to move their goods from one point to another. This is reflected in the increasing commitments of most of the African governments to commit the required resources towards expanding the capacities of most of the ports. Such initiatives have been accompanied by the development and adoption of more efficient and faster custom clearing and forwarding handling procedures. As these facilitate ease of movements of goods, it tends to motivate most of the businesses around the world to use most of the African ports as gateways for reaching markets in far locations such as the Middle East and Asia. These opportunities are boosted by the emerging opportunities in the African healthcare sector.
Healthcare
The healthcare sector in most of the African economies offers enormous business opportunities for the contemporary businesses. This is largely attributable to the increasing population in most of the African economies. This significant faster increment in Africa’s population growth offers enormous opportunities in different areas of the African healthcare sector. As the population increases due to high fertility and birth rates, opportunities tend to arise in the maternity sector of Africa’s healthcare system. Compounded by poor quality and capacity of the government hospitals and healthcare systems, these opportunities in the maternity sector are further boosted by the opportunities arising from the increasing number of children. This implies the development of children healthcare facilities as well as the maternity facilities constitutes most of the unexploited opportunities that most of the businesses are yet to exploit. Yet, as government healthcare systems in most of African markets remain less effective and deficient in terms of the capacity to handle high number of different health complications, investments in general hospitals offering an array of different healthcare services also offer enormous opportunities that businesses must consider exploiting. In this increasing demand for different healthcare services, some of the explaining factors are linked to the increasing cases of lifestyle diseases such as heart attacks, cancer, osteoporosis, diabetes and strokes. The rising number of lifestyle diseases is attributable to the increasing number of people joining Africa’s middle class population.
As a number of people join Africa’s middle class population, the drawbacks have been reflected in the fact that the changes in their lifestyles from the usually simple and disease-free-African lifestyles is causing health-related problems for the population that are not used to handling and diffusing risks associated with the wealthy comfortable life styles. In effect, this implies opportunities are not only enormous for businesses investing in the establishment of different hospitals and healthcare facilities, but also for businesses in the pharmaceutical industry. For the businesses in the pharmaceutical industry, commitment of the required amount of capital finance is critical for exploiting opportunities arising from different diseases that the population is increasingly seeking to find medical solutions for. At the sametime, the research and the overall operation of the pharmaceutical companies is further enabled by the increasing changes in government policies and legislations in most African economies that permit clowning of some of the most essential medical drugs. This renders it easy for businesses in the pharmaceutical industry to explore different strategies through which the prevailing opportunities in the African healthcare industry can be maximized. These opportunities are not only enormous for the pharmaceutical companies, but also for the producers of functional foods.
Functional foods refer to the whole, fortified, enriched or enhanced foods that, if consumed on a regular basis provide the population with enormous health benefits that far exceed the mere provision of essential nutrients such as vitamins and minerals. This is explained by the fact that although the demand for functional foods is increasing for the population that aim to minimise risks of contracting non-communicable diseases such as cancer, osteoporosis, diabetes and strokes, only a few companies have considered investments in the production of functional foods. This implies that the businesses investing in the production of functional foods will be exposed to enormous opportunities that have to be exploited. These businesses reap different opportunities arising from the increasing demand for different medical drugs and functional foods. However, the other sources of the blossoming opportunities in the African healthcare sector has been emerging from the rising demand for medical equipment. As different hospitals and healthcare centres emerge across the African economies in the midst of the rising demand for different healthcare services, the demand for medical equipment has also been increasing quite significantly. This implies businesses that are engaged in the manufacturing or distribution of different medical equipment still have enormous opportunities to exploit in the African healthcare sector. These opportunities are further catalysed by different enabling conditions that are emerging from the African markets.
Enabling Business Conditions
Some of the enabling business conditions in most of the African markets are explained by the increasingly attractive African demographics, democratisation progress and the emergence of relatively well-developed infrastructures in most of the African markets.
Demographics
Some of the enabling business conditions in the African markets are reflected in its increasingly expanding population. With a population of 1.5 billion, Africa offers enormous markets for different consumer goods, capital goods as well as enormous demands for socio-economic services such as education, healthcare and telecommunication services. Increase in the demand for different consumer goods is explained by the rising number of the African middle class. Increased government investments in socio-economic services as well as the other developments are stimulating the overall level of economic growth and development. In this improvement of the overall level of economic growth and development across different markets is the emergence of different employment opportunities that offer the population with different sources of income. Combined with the constant increment and upgrade of government salaries, the other sources of the increasing size of Africa’s middle class population is also attributable to the fastly expanding private sector.
As all these boost economic growth and development, their positive effects have been reflected in the increment of the African middle class population to spur the overall increment of the demand for different sophisticated and ostensible goods. This demand for different sophisticated and ostensible goods has been characterised by the increase in demand for more sophisticated and fashionable houses. For the businesses in the construction sector, this unlocks enormous opportunities for building and sale of quality houses that not only suit the needs of the African middle class population, but also the need for the lower income groups. As the demand for sophisticated and fashionable houses increase, the other sources of the increasingly attractive African markets are explained by the increasing demand for quality cars. However, since the African automobile manufacturing sector remains largely underdeveloped, it has often been most of the Japanese import businesses that have been benefiting. This underdeveloped African automobile industry suggests a lot of opportunities still exist for automobile manufacturers that aim to enter the African automobile manufacturing industry.
Yet, as the demand for different cars blossom, so it has also been the increasing demand for quality healthcare. With most of the government healthcare systems offering relatively lower quality healthcare services, most of the African people increasingly prefer the use of private providers of medical services. In response to such opportunities, a number of private hospitals and clinics have emerged, but they are not only few, but also tend to adopt very small scale of operations that render it difficult for responding to different healthcare needs and demands of the population. This implies for businesses involved in the development and provision of private medical services, enormous opportunities still prevail in the African healthcare sector for such businesses to maximise. This increase in the demand for private medical services is also catalysing the demand for different pharmaceutical products. In this blossoming demand for different pharmaceutical products, the increasing demand for the pharmaceutical products for infants and the young is increasingly being accompanied by the rising demand for pharmaceutical products meant for the middle class adult population. This is attributable to the fact that as the size of the African middle class population increases, the accompanying changes in lifestyles for most of the African middle class population has also attracted the increasing emergence of non-communicable and lifestyle diseases such as cancer, stroke, heart failures, diabetes and high blood pressure. This is causing increment in the demand for different pharmaceutical products and functional foods.
However, the African pharmaceutical products and functional food production industry still remains largely underdeveloped for businesses to maximise the opportunities emerging in the African pharmaceutical and functional foods’ production industry. The implications are latent in the fact that as the African market mainly relies on the importation of different functional foods and pharmaceutical products, a lot of demands and needs of the consumers in this market yet remains unmet. All this attractiveness of the African markets is accompanied by the rising demand for education services. The faster increase in the African population is mainly due to high fertility rates and poor birth controls. In effect, as the population increases, it has often been the size of infants and young African population which is increasing. In effect, most governments and private sector businesses have responded to an array of educational needs induced by such large African population.
But the quality of the offered education is still relatively low. In this poor quality of the African education system, attention has been directed towards over-investment in humanities’ education rather than science education. This has constrained the level of innovativeness and productivity of the population to affect to a significant extent the overall speed of the rate of economic growth and development of most African economies. However, besides the increasing demand for different socio-economic services such as education and healthcare, the fastly increasing African population has also been increasingly spurring the increment in demand for consumer goods such as fashionable clothes, shoes, beauty and health products and household utensils and appliances. Though most of the businesses are responding to these needs, most of the African markets for consumer goods still rely mainly on imports to imply the existence of enormous opportunities for businesses that aim to invest in the manufacturing and production of different consumer goods. However, it is not only the fastly increasing African populations that offer some of the enabling conditions in the African market, but also the increasing spate of democratisation in the African continent.
Democratization
The increasing spate of democratisation in the African markets is increasingly creating conducive investment conditions for different businesses. As most of the African governments adopt peaceful approach to change of government, Africa is increasingly experiencing significant reductions in conflicts and wars that previously characterised most of the African markets. This creates more investment conditions for businesses. It also creates certainty and the elimination of risks of destruction of business property. Yet, as the increasing spate of democratisation in the African markets leverage the overall attractiveness of the African markets, its other positive effects have been reflected in the improved governments’ responsiveness to the demands and needs of their population. This improved responsiveness to the needs and demands of the population has also caused different African governments to increase investments in the provision of different socio-economic services as well as the investments in different infrastructure.
To further improve the conditions and standards of living of the population, most African governments have been investing significant resources in the development of policies that encourage the creation of private capital as a major catalyser of employment creation to reduce the challenge of unemployment. In terms of government policies, most African countries and specifically South Africa compares favourably in the Brics’ region on the basis that most of its policies strongly support more free business establishment and development. This is latent in the Global Competitiveness Index (2015) that places South Africa in the first position for ease of doing business. In a bid to spur the overall pace of economic growth and development, the government created favourable policies and legislations that eliminate bureaucracy and red tapes for business commencement to spur the overall ease of business establishment, obtaining construction permits and getting credit, investor protection and tax payments. These initiatives to leverage the overall attractiveness of the South African market have also been accompanied by easing investments in most of the sectors of the economy. Apart from the investments in sectors such as security which is stringently controlled, there are no policy restrictions for investments in some of the lucrative sectors such as agriculture, forestry, fishing, mining and quarrying, manufacturing, energy generation, construction, retail and wholesale. The South African market also offers enormous opportunities in the unrestricted markets such as tourism, hotel and hospitality, property development as well as banking and finance. As this demonstrates the enabling conditions induced by the improved level of democratization in the African markets, the other enabling conditions have been emanating from the improving infrastructures in most of the African markets.
Infrastructure
Relatively well-developed infrastructure offers the enabling conditions that improve the ease of doing business in the African markets. This is reflected in the constantly improving telecommunication, road, rail and port infrastructure. In terms of telecommunication, most of the telecommunication infrastructures in most of the African markets have improved quite significantly to facilitate effective communication across different regions. This is largely attributable to the amount of resources dedicated by most of the African governments to leverage the outreach of telecommunication infrastructures across different rural areas. As such initiatives bolster the effectiveness and ease of communication throughout different regions in the African markets, the other improvements of the African telecommunication infrastructures has arisen from the emergence of the revolutions in the African cellular network industry.
The revolutions in the African cellular network industry have significantly contributed to improving the outreach of mobile communication. Considering the fact that most of the African consumers now possess mobile cellular handsets, communication across different regions have not only improved. Instead such improvement in cellular network communications has also lowered costs, while also easing communication. Combined with the emergence of internet technologies, it is increasingly emerging that as most of the African consumers possess mobile handsets, new marketing opportunities have also emerged for businesses to directly approach networks of different consumers with different marketing and promotional communications and messages. Certainly, these imply the evolutions in the Cellular network industry have not only contributed to easing the cost of marketing and promotion, but also the cost of doing business. Yet, as the overall state of the African telecommunication infrastructure improves, the other enabling conditions have been emerging from the improving state of roads across different regions.
Though the major inter-linking roads that span across different regions are still lacking, the improvement of the internal state of roads in different countries is still leveraging the ease of travel across the African continent. This is attributable to the fact that whereas countries such as South Africa, Egypt, Uganda, Tunisia and Algeria have invested significantly in the development of high quality road infrastructure, a lot of investments are also being undertaken to facilitate the improvement of the state of roads in countries such as Rwanda, Kenya, Tanzania, Malawi, Mozambique and Nigeria. These initiatives are being accompanied by the development of certain inter-linking road and rail infrastructures such as the ongoing process for the development of the Eastern African railway that aim to link Kenya with Uganda, Rwanda and South Sudan. As in the Southern part of the African market, the construction of the Great South-Northern Corridor is going on to link countries like Malawi, Mozambique, Lesotho and Zambia as it moves upto Tanzania.
This Great South-Northern Corridor will improve the linkage of Southern and Eastern parts of Africa. The inter-linking roads that integrates Eastern and Southern parts of Africa with the Western and Northern parts of Africa are still lacking. This is largely attributable to the poor state of roads and lack of rail networks in the mineral rich central part of Africa. The implications of this are latent in the fact that although central African countries such as Rwanda and the Democratic Republic of Congo have been increasingly committing significant resources towards the development of their internal road infrastructures, the development of interlinking road and rail infrastructures is still a challenge. Certainly, this has affected the exploitation of tourism in the largely attractive natural habitats of most central African states. It also limits the free movement of the relatively less wealthy African consumers who cannot afford the cost of flying. Despite lack of interlinking roads and rails, most companies have been increasing their investments in the interlinking airways. This is reflected in the initiatives undertaken by companies such as South African Airways, Ethiopian Airline, the Kenyan Airways and recently the Uganda Airlines that have increased their routes to encompass almost all cities in Africa. All these are being accompanied by the initiatives that seek to not only expand the capacity of ports such as Durban, Lago, Kumasi, Mombasa and Tanga ports, but also to improve the efficiency and speed of logics clearing and forwarding. In otherwords, it is quite evident that as the state of most infrastructures in the African markets improve; it seems to have created favourable investment conditions for different business.
However, as these conditions improve in conjunction with the increasingly attractive African markets, certain risks have also been emerging to threaten the overall attractiveness of the African markets.
Risks
As the attractiveness of the African markets continue to lure different businesses, successes of such businesses will depend on the extent to which they are able to craft and apply innovative strategies to deal with the associated emerging new disruptive innovations. In terms of the overall attractiveness of the African markets, the United Nations Population Fund (2015) indicates that as other markets around the world will experience significant decline of their populations, Africa will instead experience a rise in its inhabitants. This trend is expected to continue upto 2100 with the effect that as compared to the rest of the continents, half of the world’s population will reside in Africa. This signifies business opportunities will emerge across all the sectors as the demand for services like housing, food, healthcare and education skyrockets. As the demand for different products and services skyrocket, the existing and the emerging future businesses will have to be prepared to deal with all forms of competition.
Scramble for lucrative future business opportunities in the African markets will drive most of the businesses to become more innovative. To therefore survive and thrive, businesses will have to be innovative to counter the array of different disruptive new innovations that will emerge. Such situations will certainly cause escalating costs of doing business. This is explained by the fact that as businesses commit enormous funds on research and innovations, the negative end results will affect their overall operational costs. Escalating deterring costs will not only emerge from high costs of innovations, but also higher costs of inputs. The rise in the number of businesses in Africa will also cause the scramble for inputs. This will certainly cause a rise in prices of inputs. Yet, as businesses scramble for limited inputs, the overall supplies of inputs will also be affected by limited land and space for the production of such inputs. Since, the populations in the European, Asian and North American markets are expected to significantly decline, it is quite predictable that innovative businesses that rely on land availability as the sources for the production of their inputs will certainly use their plants in such locations as points for production. This signifies despite the declining population in the European, Asian and North American markets, it is most likely the European, Asian and North American markets will still remain major points for production for most of the African based businesses. Though these are likely business situations that will emerge in the long run, perhaps 50 years from now (2017), in the short run, the increasing pace of globalisation implies businesses must be prepared to deal with its associated negative effects on businesses.
In the first instance, globalisation has unlocked the entire global market for the businesses that have the capabilities to take such advantages. However, at the sametime, it has also unlocked a lot of competition with the effect that as businesses continue to operate in a free world, it becomes difficult for the businesses in unique geographical locations to take unique business advantages associated with the operation in such unique geographical locations. The increasing de-regulation and liberation across the globe have rendered it easy for businesses to search for business opportunities in any parts of the globe. As they do so, they tend to change the nature of competition in different markets that they enter. To therefore survive, business in Africa must be prepared to deal not only with local competition, but also competition from more powerful global businesses. Yet, as land issues turn to become more complex in most of the African markets, businesses that aim to operate in Africa must also be prepared to avoid getting entangled in most of the unresolved land questions in Africa.
Excerpt from a Book Titled “Business Environment and Opportunities in Emerging Markets: Trends from Brazil, Russia, India, China, South Africa & Africa” authored by Boniface Okanga, Adri Drotskie and Jennifer Davis Adesegha, and as a Postdoctoral Study Sponsored by the University of Johannesburg in 2016 on the Analysis of the Political Economy of the BRICS’ nations.
Citation: Okanga, B., Drotskie, A., & Adesegha, J.D. (2026). Africa: The New Business Playground for the World’s Top Investors. London: Elicitor.
