Sub-Saharan Africa holds a distinguished position in the eyes of the world. This unique land which is rich in resources, labour opportunities and entrepreneurial ideas is growing at an exponential rate which is not only increasing its capabilities but also, its profitability. From a business perspective, Africa can be seen as a promising and fruitful investment opportunity, set on an upwards trajectory. Through the growing Afrocentric view of the world and the exposure of local people to global business, there is nothing stopping Africa from being a front contender in international business model.
Although this is not a new fact to global investors and voyeurs, we offer a more holistic view of the regions capacity by examining 7 socioeconomic facts about Sub-Saharan Africa:
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Working age population to expand, offering opportunities for innovation and entrepreneurship in Sub-Saharan Regions
Many Sub-Saharan countries may face few employment opportunities and thus turn to entrepreneurship to build new opportunities for innovation and technological compliance. The population of this region is set to account for over half the global population growth over the next 20 years and for the working age to greatly surge when compared to the global economy and employment market.
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Mobile Internet to be at the forefront of Digital Transformation of Africa
Sub-Saharan Africa recorded an unseen high of local internet exposure of 48% in 2021 (Euromonitor). With mobile smartphone sales recorded to be on the rise in 2021, information access and delivery solutions quickly spiked. From this rush of activity, entrepreneurs grew their ideas to centralise delivery points and allow for local pick-up points for groceries, household goods, technology, the latest fashion trends, and even fast foods.
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Agreement Establishing the African Continental Free Trade Area (AfCFTA) to support new digital platforms and act as a steppingstone for Inter-Regional Trade in Sub-Saharan Africa
The impending take-off of the technological sector in African countries will aid the improvement of manufacturing and industrial goods leading to the refinement of locally produced products. With a range of better products on the rise, quality products can be exported triggering enhanced trade relationships and increased inter-African demand. Although the AfCTFTA is still in its early days of development and undergoing some teething issues along the way, the agreement clearly outlines its intentions to aid the development of local online trade platforms.
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SME Funding relying solely on local African Platforms
Local SME’s are now more than ever in need of custom finance lending solutions to meet their unique needs. Here, local lending platforms are finding their niche allowing for flexible and custom-made money programs which accommodate the requirements of each SME in a way that only a local broker would understand. With the correct financial support behind them, SMEs in Africa are becoming more common, and news of their success is becoming known globally. Many African countries are making their mark on the technological and digital sectors and are showing promising investment opportunities for major international companies.
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Vast Opportunities in renewable energy
The International Energy Agency outlines that by the year 2040 renewable energy will provide up to 50% of the power generation worldwide. Although several Sub-Saharan African countries already generate their electricity output from renewables, South Africa only records 7% of output as coming from renewable sources. As South Africa holds the title of the largest energy producer in this region, it offers a unique opportunity to energypreneurs to not only offer rectification steps, but also unmatched energy opportunities. The resources for more renewable and natural sources of energy run rampant in the African Region with solar capacity being the most notable. With this being said, it is clear why energy companies are placing their interests in expanding into both the Sub Saharan African and Southern African region with hopes of tapping into this rich energy market.
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Diminishing Regional Discrepancies
Consumer income in rural areas is set to be on the incline resulting in a shrinking gap between urban and rural per capita income. In 2016, rural disposable income per capita in the sub-Saharan African region measured at 41% of urban disposable income per capita. However, 5 years on (2021), a 2% increase of this share is seen with rural disposable income reaching 43% of urban. Euromonitor has estimated that by the year 2040, rural disposable income will account for 67% of urban income, clearly outlining the decline in regional disparities and the growing rural consumers offerings and market choices.
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Improvement of Agricultural Productivity
Sub-Saharan Africa offers a wide variety of agricultural activities and with it many employment opportunities under this realm. In 2021, more than half of the recorded African population was employed under the agricultural sector with positions in hunting, forestry, farming and fishing activities. However, even with this large share of employment, the sector contributed a measly one-fifth to the total gross value added. By implementing growth in the agricultural sector, the security of food and improved consumer income will surely follow. This would result in government action and transformation enhancing the farmer’s access to supply chains and local markets. Access to the demand of consumers will therefore bring with it the need for farmers to mechanise, strategize and optimise their output in order to keep up with the regional demand and hold a promising share in the African Agribusiness market.
Sub-Saharan Africa has always been on the radar of the developed business world, however with its potential only seeming to rise over the next few years, now might be the time to investigate further into just how this lucrative and culturally rich environment could stand to benefit your company or help your new business model soar. For more information on why Sub-Saharan Africa should be your next business venture or how InterGest South Africa could assist with staffing, accounting or managing employees and funds, take a look at our company website.
Source:
https://www.euromonitor.com/article/10-key-socioeconomic-facts-about-sub-saharan-africa
