In my previous article last week, I briefly expounded on Africa’s key economic drivers such as mining, agriculture, infrastructure, energy, transport and logistics, tourism and water sanitation. I would like to take this space to drill down into greater detail. It is undeniable that Africa is endowed with remarkable business opportunities. I sturdily believe that the information I will share will baffle and puzzle you. I am that one soul, who believes Africa is poised for economic growth, if entrepreneurs take their stand to tap into massive business opportunities this continent has to offer.
BY PATSON CHAPEYAMA
To begin with, let us look at Africa’s demographic shifts. Africa’s population is estimated at 1,2 billion people and 40% are under the age of 15. Africa’s population is expected to double to 2,4 billion by 2050. Forty-eight percent of Africans are living in dire poverty, living below $2 a day. Already the above statistics present a great opportunity for business. As the population doubles that means the demand for goods and services will increase. However, this could be a topic for another day. Let’s take a closer look at the following key economic drivers and enormous opportunities that lie in them:
Africa has 30% of world mineral resources and is estimated to have more than 60 different minerals — 87,9 % of global platinum reserves, 84% of chromium, 60% diamonds, 40% of gold, 17% of uranium and 49% of cobalt. This great endowment of mineral resources presents vast business opportunities in the mining sector. It is also believed that some other mineral deposits are not yet discovered. China imports mineral resources worth $200 billion annually from Africa.
Africa has vast arable land for farming. The sector contributes only about 15% to total Africa gross domestic product (GDP). Total Africa GDP is 2,2 trillion. Seventy percent of the workforce in Africa is in this sector. Africa imports more than $29 billion worth of food annually. This presents a massive business opportunity in this sector.
The Africa Development Bank has indicated that 630 million people in sub-Saharan Africa have no access to electricity. The continent’s consumption is 423 terawatt hours per annum, which is less than Brazil which consumes 426 terrawatt hours.
More than 40% of electricity in Africa is generated by South Africa. Africa electric generation is less than New York City. This offers a $800 billion investment opportunity. Zimbabwe is experiencing a power deficit, with daily electricity of demand of 2 200 Megawatt (MW) against an installed capacity of 1 100MW and the government has encouraged independent private producers to step in and cover the shortfall. The above statistics illustrate the bigger business opportunity in this sector.
Tourism is one of key sectors that present massive business opportunities. It is also one of the fastest-growing sectors on the continent. It is estimated that about four million jobs could be created by 2021. In 2011 it was reported that only 23 hotels were operating in sub-Saharan Africa. It is also reported that Africa only has 5% of world’s scheduled airline services. The above statistics clearly indicate great opportunities in the continent.
It is estimated that road networks cover 204 kilometres per 1 000 square kilometres. There is about an 80% deficit in terms of road infrastructure development. This also shows massive business opportunities in the transport sector.
Water and sanitation
Only 39% of people in Africa have access to clean water, while 61% have no access to safe drinking water. This is another sector, which presents great opportunities for business development.
Patson Chapeyama is the author of bestselling success books Greater Dimensions and Ascending to Zones of Greatness. He is the editor of Young Miners Magazine and Newsletters. He can be reached on +263733551627 or firstname.lastname@example.org.