Did you know that, as recently as 2019, the top five fastest growing economies in the world were in Africa? It may be surprising, but it’s true that the overall African economy is growing at a rate of 2x faster than the global average, and is the only economy that is expected to grow by double digits in the next 5 years. The challenges and needs in this region of the world has made it ripe with business and investment opportunities. Investing in Africa is the latest startup trend.
The top five areas for growth potential are in the sectors of healthcare, education, finance, energy, and agriculture.
Most people in Western society are fully aware of the health crises in Africa, but unfortunately a flood of ads for humanitarian relief has given us a somewhat narrow view of the African healthcare industry. Africa is home to 16% of the global population and only 2% of the world’s doctors. This is a devastating ratio, but it is sure to change as the need for progress has created an environment for the growth of healthcare tech and the industry is expected to reach over $37.1 billion by 2024.
Education is another area for growth and investment as more sub-Saharan children are finishing primary school than ever before, but 1 out of 5 is still bereft of access to education. The COVID pandemic of 2020 saw a 97% increase in edtech usage, but just 28 million out of 450+ million children are currently receiving an education. Education growth could have an astronomical effect on the growth of the African economy. For example, if all 15-year-olds in Ghana received a basic education, the Ghanan economy would grow by 3,800% and the overall South African economy would see an increase of 2,600%.
The third core area for growth is finance. Eighty percent of the African population has access to mobile phones and the online transactions have now surpassed traditional banking. In 2019, mobile transactions in the sub-Saharan region reached $456.3 billion, and African banking revenue is projected to reach $129 billion by 2022.
Number four is the energy sector. It might surprise you to know that many African countries are far more advanced in renewable energy usage than the US and Europe. For example, Kenya sources 13% of its energy from geothermal and 50% from hydroelectricity. The UK and the US, on the other hand source only 11% of their energy needs from renewable energy sources.
The fifth core area is agriculture. Sixty percent of the world’s arable land is in Africa, but challenges with infrastructure and food storage have stymied the growth of this valuable sector. Currently, 12% of African harvests are lost, and sub-Saharan Africa still imports $15 billion in food crops annually. Investments in agricultural infrastructure and inputs could triple the economic growth of this industry.
The fact is that Africa is not the place of desperation which many Westerners perceive it to be. In truth, it is a land brimming with potential and opportunities for growth and investment. It’s time we re-educate ourselves to the realities of this beautiful continent and thriving economy. Investing in Africa is on the horizon – be a part of the movement today.