As the second largest continent, Africa is home to 54 countries and over 1.4 billion people.
The most central continent in the world, Africa is the perfect hub for reaching the corners of the world. Incidentally, it’s also the most profitable region in the world, making it a top option for your next business venture. Here are 5 excellent reasons to take your business to the mother continent.
1. Fast adopters
Important for any business, high adopters are aplenty on the continent. The pace of adoption is faster in Africa than any other region in the world. Disposable income is also on the rise in Africa. This coupled with the middle class making up a third of Africa’s population, it presents good opportunities for businesses to take part in. Case in point, Africa’s Internet Economy is growing and has the potential to reach 5.2% of the continent’s GDP, making up a $180 billion USD stake in Africa’s economy.
2. Young workforce
Africa has a young and growing workforce perfect for businesses wanting to invest in the region. Africa is the fastest growing continent, and by the turn of the century will be the only region with population growth.
With almost 60% of the population made up of people under 25, it is also the youngest continent. There is a surplus of workers that want and need jobs. Unlike other parts of the world, Africa is not in a candidate-driven market, it’s an employer market and that means you as a business can access the best talent, without facing fierce competition.
3. Investment (into infrastructure)
Africa is the least-developed continent, barring Antarctica. With its fast-growing population, governments want and need infrastructure projects to support this budding populace. The opportunity for development is massive and African countries are adopting measures to attract investors. In Zambia, for example, an Office for Promoting Private Power Investments (OPPPI) has been established. The OPPPI provides research, identifies investment projects and helps businesses obtain the correct permits for their Hydropower space.
Africa is a resource-rich continent. For many regions, oil and precious metals and gems are some of their biggest exports. For example, in Egypt, mineral fuels account for 19.5% (5.1 billion USD worth) of their total exports, and precious metals and gems account for 8.2% (2.1 billion USD). For Nigeria, 96% of their total exports are mineral fuels (31.8 billion USD). South Africa’s gems and minerals sector has a total value of $14.9bn USD and accounts for 16.7% of their total exports.
In addition, Africa’s proximity to the equator and varying climates makes it perfect for the emerging and highly profitable renewable industry.
The lack of infrastructure and financing has seen rich resources remain untapped across Africa, leading to businesses thriving there. A great example of this is the Algerian company, Sontrach, which turned over $33.2 billion USD in 2017 from oil and gas alone. Evidently, foreign investment in Africa has a lot of potential.
5. High return on Foreign Direct Investment
According to the Overseas Private Investment Corporation (OPIC), Africa offers the highest return on foreign direct investment (FDI) globally. In fact, according to the UN Conference on Trade and Development, Africa’s return on foreign investment between 2006 – 2011 reached 11.4%, significantly more than the world average of 7.1%.
Currently, the top three recipient countries in Africa for FDI in 2020 were Egypt, The Republic of the Congo and South Africa. Since 1 January 2021, the African Continental Free Trade Area has been in effect, creating the world’s largest free-trade area with Africa’s 54 countries participating. This agreement essentially creates a single market which lets foreign businesses easily reach markets that were once difficult to approach.
Africa is a continent filled with opportunity, yet it is one of the most largely untapped regions in the world. With 54 countries, Africa is rich in diversity and potential. Featuring the fastest-growing population and urbanisation globally Africa can be a fortuitous place to invest in for businesses.
With a burgeoning workforce, Africa presents a unique opening for businesses to fulfil their talent needs, without facing difficulties presented in other regions, which are facing major labour-shortages.
In addition, many African country governments are able and willing to help foreign companies enter the region. Businesses also provide Africa with more jobs, better infrastructure and economic growth. A win-win situation for all.
If you are interested in bringing your business to the motherland continent, get in touch with our Recruitment Manager – Africa, Ashton Ngwenya. With over 10 years’ experience in recruitment for local and multi-national businesses; as well as fluent in English, Shona, and can speak some Xhosa – he is the perfect person to help your business.