Companies with outstanding financial structures benefit from Africa’s fast-growing population and rich resources. This article looks at the fastest-growing businesses in Africa. These businesses are selected based on their growth rate and revenue generation potential.
Note that we consulted several reliable sources while compiling this list. These sources include the World Bank, Market Watch, Nairametrics, Tech Crunch, Africa Business Communities, etc.
1. Financial Technology Business
Financial technology businesses continue to outshine many startups in the African continent with problem-solving innovations. According to Tech Crunch, Africa is the world’s second-fastest-growing and profitable payments and banking market after Latin America. The continent is home to over 500 financial technology firms, most in Nigeria, South Africa, and Kenya.
According to The World Bank, about 66% of Sub-Saharan Africa’s population is unbanked. The unbanked population is another reason financial technology businesses thrive in the continent. They leverage technology to modify, automate and enhance financial services for consumers and businesses.
According to Business Elites Africa, 75% of Nigerian financial technology startups earn an average of $5 million annually. Given the continuous funding for financial technology companies in Africa, the sector will continue to grow with internet penetration and smartphone usage.
2. Food Business
With many investors benefiting from Africa’s resources, the food business is one of the businesses in the continent with a fast growth percentage. According to Business Standard, Africa’s food industry recorded a growth of 3.6% in 2020-21 and 3.9% in 2021-22. Food is a basic need for everyone, making it profitable for businesses for entrepreneurs in the sector.
The growth is driven by soaring demands for packaged and processed foods and the high consumption of frozen and dairy products. The food and beverage industry expansion and innovation are other growth contributing factors. According to Nairametrics, a more significant food Crisis is looming in Africa.
The Russia-Ukraine war, low purchasing power, political instability, and conflicts are soaring food prices to unprecedented levels in the continent. Meanwhile, Agro entrepreneurs are benefiting from feeding over one billion people. Entrepreneurs earn huge rewards locally by storing and packaging food products with an excellent transportation network.
3. Real Estate Business
With Africa’s large population, there is a high demand for commercial and residential properties, making the real estate business thrive. According to Nairametrics, The Nigeria real estate market grew by 1.77% in 2021 and 10.84% in the first quarter of 2022. The Egyptian real estate market generated $10 billion, representing a growth of 8% in 2021.
According to Nairametrics, Egypt’s real estate market has a growth projection of 6.5% in 2022. Kenya’s real estate market rose by 5.2% in Q3 2021 and is projected to grow by 5.9% in 2022. The real estate business is one of the most valued in Africa, with entrepreneurs earning from leasing, buying, and renting commercial and residential properties.
The real estate business is highly profitable but requires knowledge and experience. To get started in Africa’s real estate business, consider seeking advice from experienced realtors and learn from previous mistakes. Learn the industry’s strengths, weaknesses, and how it works.
4. E-Commerce Business
Electronic commerce is a fast-growing African business due to technological advancement and innovation. Firms in this sector allow individuals and companies to trade goods and services through the internet. According to Vanguard Newspaper, Africa’s real estate market value has a projection to reach $180 billion by 2025. The report further disclosed that Africa’s eCommerce ventures secured funding of more than $256 million in 2021, representing a 40% growth from 2020.
According to Africa Business Communities, the e-commerce industry is expected to generate annual revenue of $46.1 billion by 2025. The lucrative industry business involves facilitating the sales of goods and services between companies and their customers. E-commerce ventures also facilitate the sales of goods and services through third parties. Jumia, eBay, Konga, and Kilimall are a few examples of African e-commerce platforms.
5. Logistics Business
Logistic business is a lucrative and fast-growing business in many African countries. Whether in Mauritius, South Africa, Ethiopia, Ghana, Kenya, or Nigeria, entrepreneurs earn considerable rewards in the industry. According to Market Watch, Africa’s logistics market rose from millions to Multi-million dollars from 2017 to 2022. Reports from Sawya show that Egypt’s Suez Canal recorded a revenue of $704 million in July 2022, representing an increase from the $531.8 million reported in July 2021.
According to Research and Markets, Nigeria’s Logistics and Freight Market is expected to grow with a compound annual growth rate (CAGR) of over 3% from 2022 to 2027. The business is profitable in various African countries with the rise of delivery agencies working hand-in-hand with traditional and online retailers. Delivery agencies streamline the transfer of goods to customers’ destinations. Consider researching the business’s strengths and weaknesses before investing and focusing on building an online presence for promotions