Small Business Ideas in Africa
If you are desperately looking for small business ideas in Africa to invest your money in, I can confidently tell you that you will see one or two from my top 25 best profitable business opportunities in Africa.
There are so many business opportunities in Africa for any serious entrepreneurs to invest in.
Some don’t even require large capital but promise a huge return on investment.
So, if you are based in any of the African countries or base in the Diaspora and you will like to venture into any profitable business opportunities in Africa, here is my list of the top 25 best small business ideas in Africa.
“Africa is the fastest-growing economic region in the world. This is the right place to invest.” Aliko Dangote.
Many people are diving into so many profitable business opportunities in Africa and you are supposed to be among them after reading this post.
Africa is well known for agriculture and it accounts for between 60% to 70% of any country’s economic GDP.
Most Africa entrepreneurs are tapping into this profitable business opportunity.
Some countries like Nigeria, Angola, and other Africa countries depend largely on agriculture for their source of income and foreign exchange.
7 reasons why you should consider doing business in Africa
1. Huge interest in commercialization.
Commercialization in Africa businesses has made it possible for new products and services to be brought into the markets for the main purpose of meeting up some needs.
Africa has a lot of business potentials because, for every problem that is still unmet, they are a possible solution to satisfy customer’s needs.
2. An emerging economy region in the next 10 years
It is projected that by 2050, Africa will be a perfect place for the world’s most powerful economies and will have a total Gross Domestic Product of about $29 trillion.
3. A good amount of skilled labor workers
Africa is the world’s second-largest and second-most-populous continent, after Asia in both cases.
Africa is projected to hit more than 2 billion populace by 2050.
More than 50 percent of African’s population is under 20 years old, making it the world’s youngest continent In comparison only 28% of the population of the Chinese is under 20 years old.
Which in return will increase the number of workforce occupying different sectors of the African economy and with this, they will also be rapid growth in different African country’s economic sector.
4. Ease of doing business
The Doing Business Report 2013 has ranked Mauritius, South Africa, Rwanda, Botswana, Ghana, Tunisia, and Namibia above China(as the best performing BRIC country), while Morocco, Zambia, Egypt, Kenya, Uganda, Ethiopia, and Nigeria rank above Brazil and India.
5. African’s Urbanization
Urbanization in Africa is increasing quickly and rapidly.
Urban African consumers spend the largest share of their budgets(about 45%)on food and groceries.
6.FDI inflows to Africa have increased by 13.6% and FDI outflows by 55.6% in 2010.
7. African countries have diversified economies.
Diversification of the economy is what really separates Africa from other continents.
As a smart entrepreneur or investor, you can exploit so many sectors and markets, whichever you like, make sure you make a change in the African economy.
Top 25 Small Business Ideas in Africa
1. Agricultural Business- Agribusiness is a money-spinner that has made most African entrepreneurs rich!
Ghanaian popular actor and also an Agribusiness entrepreneur like John Dumelo has proven that Africans can build a sustainable economy if the Agricultural sector in Africa can be more financed, managed, and developed in years to come so as to boost the GDP of the Agriculture industry in Africa.
“From the farm to the markets to our home… I am proud to be contributing my quota as a farmer to national development.” It is good to be a farmer.
This is one big profitable business opportunities in Africa that can make any entrepreneur wealthy.
According to the World Bank Report, the agribusiness industry in Africa is expected to worth $1trillion by 2030
Venturing into this profitable business opportunity in Africa makes you one of those people that will help cure hunger in Africa.
Major crops in Africa that you can farm on are poultry, maize, cassava, rice, vegetables, walnut, onion, yam, etc.
A Motswana agribusiness entrepreneur Nonny Penelope Wright, the founder of the Sereledi diary brand, also inspired her to start her own agribusiness, Lopey Inc.
Lopey Inc, where her company runs a dairy producing and processing company where they produce raw milk and further process it into fresh milk, madila, and drinking yogurt.
This is one of the best Small Business Ideas In Africa.
2. Media and Entertainment- Africa is a home for entertainment after the United States Of America
From Nigeria to South Africa to Kenya to Ghana, Africa’s music and films now get attention from international brands that they now sign Africa artists into their music record label.
Africa’s film and the music industry have begun to enjoy huge patronage within and outside the continent.
With this fact, what are you still waiting for?
These days, African actors and actresses are now being featured in Hollywood.
An entrepreneur can start his or her own movie industry or record label and make good money from signed artists.
Top music entrepreneurs like Don Jazzy of Mavin Records, Kenny Ogungbe, and Dayo Adeneye of Kennis Music are swimming in cash presently from the money they make from their artists, international record deals, and ambassador deals from brands.
3. Real Estate Development- The big deal! Because Africans need more housing units.
One of the best investments you can make in Africa is investing in the real estate industry.
People will always need shelter to keep their heads and if you can provide one, they will pay you forever.
Families need an apartment and usually find normal homes that fit their budget and happily pay their monthly dues.
Purchasing and developing rental properties is one sure way entrepreneurs in Africa are making their money.
This is residual income to your pulse without any worry about the economic performance.
4. Retail- More gaps need to be filled here!
International and local brands like Shoprite, KFC, Checkers, Edgars, Mall of America are now expanding into many countries and occupying any available spaces in big cities.
Big online retail stores like Konga and Jumia has grown so big in a few years of entering the market.
Both Internet-based retail businesses now have a combined worth of over $1 billion.
Africa’s retail industry is now a multi-billion dollar business opportunity.
Retail is now gradually moving from its formal open market into a more organized form in a single shopping mall and online stores
Africa is now one of the growing retail markets in the world.
Interestingly, the battle for retail supremacy in Africa isn’t only happening in physical retail chains.
5. Create a Full-Service Job Agency- Unemployment is at a high rate most especially using Nigeria as a case study
This is another profitable business opportunity in Africa.
One biggest issues in Africa among graduates is getting employed.
Most times, companies even find it difficult to recruit the exact qualification they are looking for.
As an entrepreneur, you can start up an organization that acts as a middle-man between job seekers and job employers and get a commission for doing it.
Jobberman.com is one company that is doing this successfully and they are raking in a huge amount of money monthly.
6. E-commerce- They are lots of business potentials in the eCommerce business
E-commerce in Africa is only in its very early stages; however, there are a lot of opportunities to seize.
Good positioning and a well-rounded branding and customer service will help any well-funded startup in this segment to make fortunes.
7. Apps and Online Services- Smart African tech entrepreneur can come up with creative and innovative apps and online services
There are so many businesses in Africa making money from their apps as they are using them to solve customer’s problems online.
These days there is almost an app for anything you want in life.
Just give it a thought and you will understand what I am talking about.
Africa is not left behind in app creation and delivery of online services for consumers.
In fact, if you are looking for a suitable hotel in Nigeria that meets your budget, you just need to visit Hotels.ng or Jovago.com.
Looking for Africa movies to watch, there is already an app for that. It is called, IrokoTV.
What are you waiting for as an entrepreneur to launch your app or online
8. Payment Solution- Internet entrepreneurs need more payment option for swift business transactions
Online entrepreneurs in Africa are still having issues making and receiving payments online due to the restriction placed on some African countries by the largest online payment platform, PayPal.
Smart entrepreneurs who can provide simple, easy, and convenient payment solutions will be well rewarded greatly as so many Africans are now involved in one or two online businesses these days.
In Africa, there is still a huge space missing in the online payment solution.
Online payment platforms like M-Pesa that covers Eastern Africa and Paga, SimplePay, and PayWithCapture that are taking over the Western side are trying to bridge the gap and become an Africa giant in online payment.
Just as of late last year 2020, a Nigeria Fintech company named ‘Paystack.com’ was acquired by Stripe for $200million so as to expand into different countries in Africa.
You as an entrepreneur can either invest in any of these companies so your fund can help them achieve this goal or you can invent the solution yourself with your own company.
9. Education- The educational system in Africa needs to be improved.
This is one opportunity Africa entrepreneurs need to also consider.
Africa values education more than any race I have ever imagined.
However, poor access to quality education is a serious threat to Africa’s human capital and this causes many elite parents to send their children abroad for studies.
This is one best profitable business opportunities in Africa as you can start up a good and affordable private school or university that can meet up with international standards.
10. Power generation- Poor supply of electricity is another challenge facing most African countries
There are so many countries in Africa suffering from electricity.
This is an opportunity for entrepreneurs to provide a solution and make money from it.
So many companies have started tackling this problem by providing alternative means of generating power.
They are companies now providing solar panels, wind vanes, generators for households so they can generate power when electricity fails and Africans have started buying into the idea.
Although, it is very expensive compared to the electricity provided by the government.
11. Smartphone Startup- The number of smartphone users in Africa keeps on increasing on a yearly basis
The high number of Smartphone users in Nigeria, Which is considered to be Africa’s biggest economy and most populous country, is being forecast to grow to more than 140 million by 2025.
Smartphone penetration is set to grow to around 60 percent by 2025, which has presented strong growth opportunities for mobile phone and Smartphone manufacturers.
You can become a phone dealer either by partnering with popular phone brands such as Infinix, Tecno, Samsung, Gionee, Itel, and iPhone. Get their various products at discounted prices then resell higher to the local market.
12. Start A Construction Company- A huge contributor to Africa’s infrastructure
Infrastructure is one of the keys in a developing continent like Africa. An investor or an entrepreneur can start a construction firm where you specialize in various forms of construction works such as the building residential houses, office spaces, shopping malls, churches, hospitals, schools, and road construction.
Most Africa countries as a whole need more good infrastructure so as to create a more enabling, friendly, and working business environment for both local and foreign investors.
13. Affordable Healthcare Services- Our healthcare system is relatively poor or low and needs more interested investors to invest in the healthcare sector in Africa
Poor healthcare services have been a major problem that is being encountered in the Africa continent over the years which has increased the high rate of mortality across different countries in Africa.
With the high margin of poor healthcare services in Africa, it has discouraged most local and foreign investors to invest in a good business opportunity here in Africa.
As qualified and certified healthcare personnel, you might want to offer various kinds of healthcare services either by setting up a private hospital, health consultancy, pharmaceutical store, supply of medical equipments, and so on that is being considered affordable by Africans.
As of 2016, the healthcare situation prompted innovative Nigerian entrepreneurs like Tito Ovia, Adegoke Olubusi, and Dimeji Sofowora to launch Helium Health, a healthcare technology provider working in several African countries.
If you can invest in the healthcare sector in Africa, be less assured that you will be swimming in millions of dollars in years to come.
14. Transportation business- A multimillion-dollar business that guarantees a daily profit
The transportation business in Africa is considered to be a boomer when it comes to high-income generating venture and also it is worth millions of dollars.
You might want to give this business opportunity a second thought because you will be making money on a daily basis and the reason is that most Africans don’t own their own vehicle what they do is that they patronize commercial transportation service that would take them to their various destinations such as office, school, place of business, and event.
The population of Africans is more than 1billion as of 2021 and these stats keep on increasing so fast on a yearly basis, and looking at these figures, this is one of the smart business ideas to invest into.
They are various transportation business ideas you can choose from such as Taxi services, Tricycle, commercial buses, ferry transportation, and Motorcycle.
15. Automobile Sales- You can import affordable automobiles and sell them to the local markets. This industry is a goldmine
With the high increase in Africa’s population, the number of people that wish to own an automobile vehicle either for commercial or private use will never decline anytime soon.
This is a big gap for an entrepreneur or an investor to fill in by investing massively in the automobile industry.
USA, Germany, Canada, Belgium, and the United Arab Emirates are some of the top 5 countries car dealers in Nigeria do import quality and affordable car from.
Nigerians alone have a calculated expenditure that is not less than 5 billion dollars on a yearly basis importing used cars from the aforementioned countries.
Just be ready to adapt to custom clearance and duties that is be levied on your imported cars.
This is one of the major challenges you might likely face in the near future if you are running an automobile business in Africa.
Some of the business opportunities to explore in the Africa automobile industry are as follows:
- Importing and selling of used vehicles- An average African can only afford second hand used vehicles compared to purchasing a brand new vehicle which they still consider it as being too expensive.
- Selling of vehicle spare parts and accessories
- Setup an automobile repair service/maintenance workshop
- Invest in scrap metal from non-working vehicles- This is the collection and recycling of scrap metals from dead or non-repairable vehicles for the purpose of manufacturing and some other uses.
- Operate a car manufacturing unit- For entrepreneurs with high intensive capital; you might want to take the African automobile industry to a new dimension by building a car manufacturing unit where you will be manufacturing luxurious, affordable, and good vehicles for typical African roads.
Automobile business firms like Innoson Motors(Nigeria), The Kantanka(Ghana), The Kiira EV Smack(Uganda), and Mobius Motors(Kenya) are making billions of dollars from the automobile industry.
Another business opportunity in the automobile sector is the importation of tricycles, commercial buses, and motorcycles.
For you to succeed in the automobile industry, you will need a decent amount of business capital, an aggressive marketing strategy, and good business branding these are some of the things that will sustain you for a very long time in the automobile industry.
16. Provision of startup fund
Most local investors have seen the need of assisting aspiring entrepreneurs to raise capital for their business.
The Nigerian Bank of Industry (BOI) is a commercial bank that was incorporated in 1964. They later took off in 1964 with an authorized share capital of 2 million (GBP).
Their main aim is to transform Nigeria’s industrial sector by providing financial and business support services to enterprises.
An investor can set up an agency where business funds and loans are being borrowed with the sole aim of paying back with some agreed and bargained interest.
17. Waste Management Business- Over the decades, poor waste disposal has been a major challenge facing a developing continent most especially Africa
Waste management is a social, economic, and environmental problem facing almost all African countries over the decades and at this present moment, the problem is still a major concern in Africa.
If you as an investor can initiate waste management startups that can help regulate and curtail the high rate of waste disposal across various countries in Africa(We need to have a better, clean and good environment here in our continent ). You can earn generate a good amount of revenue from the waste management business.
Some of the good business opportunities in the waste management business are as follows scrap business, electronic recycling business, rubber recycling business, medical waste disposal business, plastic recycling business,
Waste management is well regulated in most developing countries and it will be a good idea if you partner with bodies regulating waste management in any desired country you want to set up your waste management business firm so as to have an upper hand when running your business.
Lorna Rutto a Kenyan woman who had to quit her banking job in the year 2009 to pursue a career in waste management. She started her own company and named it Ecopost, which mainly focused on recycling plastic wastes collected from garbage cans and dumpsites in the city of Nairobi, to manufacture fencing posts (These posts are being used in houses and forest reserves to fence the properties and are getting increasingly popular).
Over the year, 10,000 posts made, she was able to create over 500 jobs and generated over $150,000 in yearly revenue.
18. Hotel Business- The Africa Continent attracts a lot of foreign investors
Most countries in Africa such as Rwanda, Mauritius, South Africa, Kenya, Nigeria, Ghana, Botswana, and the rest attracts a large number of investors and tourists from different parts of the world who are interested in exploring more places and business opportunities in Africa, they will need a place for shelter which will be conducive and convenient for them during their stay for the main time in Africa.
This is a good reason for interested investors to build more affordable hotels across different African countries, you wouldn’t only be making money from the hotel business but you are also aiding to promote and boost the hospitality industry in Africa.
“Despite Pandemic, Hotel Chains Grow in Africa”-The Wall Street Journal
Well, known hotel chains, Marriot International, Radisson Hotel Group, and Paris-based Accor, Europe’s largest hotel company, say their African businesses are not only holding up, but they are also determined to stay on track with, if not grow, their footprints.- The Wall Street journal
19. Furniture Business- Unsaturated business opportunity that assures you with huge returns.
As they is an increase in more housing units in Africa ranging from residential to commercial building, they will also be a need of getting more equipped furniture in a home or offices that will give it a more appealing and attractive look.
The urbanization process is expected to exceed in very fast growth, mostly in Sub-Saharan Africa and quite a large urban areas will be known to be the engine of economic growth with high interest and increase of various furniture consumption.
An entrepreneur or investor can set up a business firm where you deal with local manufacturing of good and quality furniture such as chairs, tables, wardrobes, cabinets, bed frames, and so on.
In South Africa alone, the total revenue generated in the furniture&home-ware segment amounts to $310 million. This is expected to give an annual growth rate of about10.4%, resulting in a market volume of $461 million by 2022.
20. Food Processing- Africans are good patronizers of processed food.
Africans are great consumers of processed food most especially those in urban areas, it will be a good business idea if you bring in an innovative way of producing consumable processed food here in the Africa continent, a goldmine because anything food thrives very fast.
Food processing requires a lot of business capital, a good business model/plan, and an adequate amount of skilled workers who will help you achieve your business goals.
This business entity will never vanish into thin air or become irrelevant because Africans depend heavily on food consumption so as to increase their productivity and help them run their day-to-day various activities.
21. Haulage/Logistics- Shipments coming into Africa’s continent is on the high side and needs to be delivered to their various destinations
Haulage/Logistics business is a good business opportunity that guarantees high returns upon investments if properly it is given the right approach.
Most merchandise that is usually in large quantities mostly those coming from seaports, airports, and neighboring countries will need to be taken to their desired location at all cost.
The service of a haulage/logistics service will be highly needed by your prospective and ideal clients.
You might want to consider purchasing either one or two trucks that are in good working conditions, register your business entity with bodies in charge of haulage/logistics in any given African country you want to launch your startup.
Hire an experienced and trustworthy driver who will help you in the operation of your haulage/logistics business smoothly while you stay in charge of the income and expenditures.
22. Manufacturing business- Is the next big thing; Africans are great consumers of manufactured products
Do you have any innovative business ideas in Africa’s manufacturing industry? Then you might want to start the manufacturing of products that can solve customer’s problems. Mostly all other industry depends on the manufacturing industry to help meet their needs.
Using the construction industry as an example, they need more building materials to make use of in their various construction works.
23. Oil&Gas Business- A fast way to massive wealth creation in Africa
The oil and gas industry is a goldmine when it comes to a good business opportunity that is mostly considered a smart business idea that makes one some quick return after a heavy investment is being made within few years.
Femi Otedola a Nigerian business mogul and also the main shareholder of publicly traded Forte Oil, an oil marketing and power generation company. Forte Oil as of recent, has more than 500 gas stations across the country. It owns oil storage depots and manufactures its own line of engine oils.
Let’s take Nigeria as a case study, her country happens to be one of the highest African oil and gas producing country.
They are lots of lucrative and profitable business in the oil and gas industry here in Nigeria.
The oil and gas industry is the most carefully controlled and regulated sector in Nigeria because of the financial benefits that come with it and it is also hazardous.
Earlier discussed, the oil and gas business in Nigeria is very capital intensive yet it still guarantees quick income provided you abide by the Nigerian government’s policy and connecting with the right individuals that will make sure you succeed in Nigeria’s oil and gas industry.
24. Drone Business- The Rwandan’s Government are adopting the use of advanced technology
Drone is also known as unmanned aerial vehicles(UAVs), are being used in advanced countries for a variety of use because of their fast end result and accuracy that will be gotten within a short period of time.
Rwanda is known to be one of the underdeveloped countries in Africa, but when it comes to the use of advanced technology to solve human problems, no other Africa country can come close.
You might want to initiate and launch a drone company in Rwanda or any other Africa country.
Having a good business mindset is one of the only ways you’re likely to succeed in the drone business.
25. Fashion/Textile- Less focused and lucrative venture
The fashion and textile industry is a multi-million dollar business in Africa, if you are an experienced and creative fashion designer, you can start your own venture where you make good, quality, and appealing attires with native Africa fabrics and market your products to the local market because they are your ideal clients(they will patronize your products the more).
You wouldn’t be making only decent money from fashion design but you’re also helping promote Africa’s rich culture via fashion/textile design and this will likely attract more customers to your business, as more people get to know about your products and they love it, absolutely they will recommend you to their families and friends in due time your fashion business will become the newest trend in town.
Building a successful brand in the fashion industry can be pretty tough in Africa. But for Nigerian fashionpreneur, Eki Okubanjo, the founder of Eki Oris Fashion Company, she is a positive proof that it is quite possible, realistic, and achievable by getting to know your customers and their specific needs.
Today, Eki Okubanjo has taken the African fashion industry to another different level by creating beautiful and practical clothing for both her female customers and also their kids who want to look good by rocking African native attire.
The African fashion industry is a very lucrative and profitable sector that has a lot of potentials for job and wealth creation most especially for women and youths.
26.Digital Marketing service
The penetration of internet usage is gradually experiencing a fast growth on the African continent compared to other years, as at 2017 there were 525 million internet users in Africa.
With these statistics, they will be an increase in web traffic which is considered to be high business growth, and more income for those into digital marketing.
Becoming a digital marketer for various brands that would love to take their business online to generate more leads and increase their clientele base is a good business opportunity in Africa.
The best way to learn digital marketing is by acquiring the best knowledge of various digital marketing services from any skill acquisition program in your locality that offers such.
Google Digital Skills for Africa is an online free course that would help you to know the basic and fundamentals of digital marketing which includes 26 modules for you explore, all this were made possible through the initiative of Google trainers, it also has well packed full of practical exercise and real-life examples to help you turn knowledge into action.
With the above small business ideas in Africa I have shared with you, you should be able to pick one or two business opportunities and ponder on them and take action.
To Your Success
God bless Africa!