Want to know how to make money in Africa the ‘easy’ way? Solve a serious problem!
When you look at Africa, what do you see?
When most people look at Africa, there are two very strong but opposite images that emerge:
Some see a continent that is full of problems – unemployment, disease, hunger and insecurity – a place where everything is wrong and nothing works.
Some others see a land of vast opportunities and untapped potential.
Optimists like to describe Africa as the “world’s last frontier” of lucrative business opportunities.
While the ignorant and fearful see a dark and unpromising continent, smart entrepreneurs see the amazing business opportunities that lie beneath all of Africa’s problems.
This article looks at eight serious problems that hold lucrative business opportunities in Africa and will make money for entrepreneurs who can unlock them.
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Looking for serious problems around you and thinking of interesting ways to solve them is one of the most effective methods of finding high-potential business ideas.
Problems are blessings in disguise and every successful entrepreneur knows this secret.
It’s no surprise that ‘problem solving’ is the top recommendation for finding business ideas in our popular article: 3+ Guaranteed Ways to find Profitable Business Ideas in Africa.
The most lucrative opportunities in Africa are not in its crude oil, precious stones or timber. No! Africa’s biggest jackpot lies in finding solutions to many of its serious and pressing problems.
Anyone who can find solve the problems you’re about to read stands the chance of making money in Africa.
Here they are: Eight of Africa’s most serious problems…
#1 – Hunger
Hunger is one of Africa’s biggest and most serious problems.
Images of hungry and starving African children often make the headlines in our daily news and have come to represent the face of our continent.
Despite having more than 60 percent of the world’s uncultivated arable land, a conducive climate for agriculture, and an overwhelmingly young population (more than 60% of the African population is under 25 years old), millions of people on our continent still go hungry.
Presently, Africa does not produce enough food to feed itself and has remained a net importer of food. (photo credit: hunger-undernutrition.org)
With one of the world’s fastest growing populations, many African countries spend billions of dollars every year importing basic food products to meet local demand and consumption.
Our continent’s population (currently at over one billion) is predicted to rise to 2.3 billion in less than 40 years. With all these mouths to feed, agriculture is more than likely to become a booming industry in Africa’s future.
There are several reasons for the serious hunger problem on our continent.
Apart from hunger which is induced by conflicts and natural disasters (like drought and floods), Africa’s failing agriculture industry is arguably the root cause of hunger on the continent.
Agriculture, which used to be a booming and attractive industry, has been abandoned for white-collar jobs in the cities.
At the current migration rate, more Africans will live in cities than in rural areas in the next 30 years. With decreasing interest from ordinary people and low investments from both the business community and governments, the current state of Africa’s agriculture industry makes it unable to produce the amount of food needed to feed a large and fast growing population.
There are several lucrative opportunities for entrepreneurs who start businesses, no matter how small, that help to solve the hunger problem in Africa.
There is also a huge potential for businesses like animal feed production that support the agriculture industry. In fact, there are several business ideas in the Agriculture and Food section of Smallstarter that will interest you.
The opportunity in Africa’s hunger problem is simple:
Food is a basic need and a matter of survival. You can hardly ever go wrong with food in Africa!
#2 – Unemployment
With one of the world’s youngest populations, Africa’s large and growing pool of unemployed labour is one of its biggest problems.
Young people, many of who are physically and mentally capable, cannot find the jobs they need to earn a decent income for their upkeep and basic survival.
Depending on whose figures you’re looking at, the unemployement rate on our continent is huge (up to 50 percent). photo credit: rediff.com
Since jobs must exist before people can be employed, does it mean that there are no jobs in Africa?
Of course not!
In fact, Africa’s economy has been growing steadily for over a decade and six of the ten fastest growing economies in the world are in Africa.
A growing economy is often a clear sign that more jobs are being created. However, the main problem with the job market in Africa is that it is largely disorganized. It is quite difficult for businesses and employers to find potential employees with the right skills, education and experience for the positions they want to fill.
To a considerable part, Africa’s unemployment problem has to do with information sharing rather than total unavailability of jobs.
Several smart Africans are already rising to the challenge of solving our continent’s unemployment problems. In Kenya for example, three ambitious entrepreneurs started M-Kazi (now defunct), a mobile phone-based job recruitment service that allows job seekers to get information about available job vacancies and helps employers to target the right talents.
This SMS-based information service is used by thousands of Kenyans on basic mobile phones with no internet capability which are still very popular in many parts of Africa.
In Nigeria, Jobberman.com, which was started by three university undergrads in 2009, has become Nigeria’s Number One job search and recruitment portal.
In a country where more than 40 million able-bodied people are unemployed, Jobberman is helping millions of people to find their dream jobs.
Seeing the huge potentials in this business model, Tiger Global, a New-York based fund with investments in Facebook and LinkedIn became an investor in Jobberman.com in 2011… a little less than three years after it started!
The service now has a subsidiary in Ghana and plans to roll out across Africa in the near future.
Apart from providing critical information services that help employers and potential employees to find each other, there is also another angle to the unemployment problem in Africa – unemployability.
Many of the people looking for jobs on our continent do not have the required education, training, skills and experience that make them desirable for employment. Businesses and entrepreneurs who can offer solutions to this problem in the form of skill acquisition programs, education and training are very likely to enjoy huge benefits.
#3 – Diseases
Photo credit: sacema.com
Despite having less than 15 percent of the world’s population, Africa alone accounts for nearly 24 percent of all diseases that occur in the world.
Apart from poor access to essential medicines and vaccines, low quality healthcare, malnutrition, and poverty, our continent’s tropical (warm) climate favours the breeding of disease vectors (like mosquitoes which cause malaria).
In addition to these factors, the rise of chronic diseases like heart attacks, cancer, respiratory diseases and diabetes is causing more deaths in Africa every year.
According to a recent WHO Report, infectious diseases are the leading causes of sickness and death in developing regions like Africa.
Of these infectious diseases, malaria, HIV/AIDS, pneumonia, tuberculosis, diarrhoeal diseases, and measles make up more than 90 percent of over 10 million disease-related deaths that occur in Africa every year. Most of these diseases can be treated with the right drugs.
Africa’s serious disease problem has led to a huge and rapidly growing demand for drugs, medicines and other pharmaceutical products.
The size of Africa’s pharmaceutical market is expected to reach nearly $45 billion by the year 2020 and entrepreneurs like Uganda’s Emmanuel Katongole are already taking advantage of this huge opportunity.
Both giant drug manufacturing companies (inside and outside Africa) and small neighbourhood pharmacies are reaping huge benefits while they help to fight and reduce Africa’s huge disease burden.
Our detailed article: ’Drugs and Medicines – How to tap into the million dollar market that helps to fight diseases in Africa’ takes a very close look at the opportunities in this sector.
#4 – Education
Photo credit: futurechallenges.org
The standard of education in many parts of our continent has deteriorated very badly. Poor access to quality education at all levels – from basic primary education to university – is another serious and nagging problem across Africa.
The poor quality of government education and low investment in the education sector has put it in a state of crisis in many African countries.
Because many Africans understand that education is one of the few bridges out of poverty, millions of poor families on the continent are desperate to find good schools for their children. However, the existing schools and training facilities are both unaffordable for many people and not even enough to cater to the needs of Africa’s large and rapidly growing population.
To solve the problem of inadequate opportunities for affordable quality education, some entrepreneurs on our continent have come up with interesting solutions.
Omega Schools, based in Ghana, is a chain of low-cost private schools that offers basic primary education to children in poor families for an incredibly low and affordable fee (less than $1 a day per student).
Bridge International Schools in Kenya uses a similar low-cost model to provide affordable education to thousands of children in East Africa for less than $5 per month per student. Before these amazing businesses started, it was thought impossible to educate poor people at a profit.
Our recent article, ‘The business of Education in Africa – 7 lucrative opportunities you can exploit in this huge and growing market’ looks at some of the interesting opportunities that can be exploited by smart entrepreneurs in Africa’s education sector.
#5 – Electricity
Some people say that if you look at the African continent from outer space at night, it looks empty and pitch black.
Maybe this is why the rest of the world refers to Africa as the ‘dark continent’.
The poor supply of electricity to support everyday needs like lighting up bulbs, pumping water and charging mobile phone batteries is a big and very serious problem in many parts of Africa.
In many countries on the continent, less than 20 percent of the population have access to electricity; the situation is much worse in rural areas where fewer than 5 percent are connected to the electric power grid. photo credit: care2.com
Electricity is such a serious problem for Africa that the growth and prosperity of its economy and the convenience of our daily lives depends on it.
Did you know that all the 48 countries of Sub-saharan Africa (with a combined population of more than 750 million people) generate roughly the same amount of electricity as Spain (a single country of less than 50 million people)?
According to the WorldBank, Africa arguably has the worst electric power infrastructure in the world with the lowest scores in power generation, consumption and security of supply! (source: WorldBank).
The explosion of mobile phone use across Africa has increased the demand for electricity and escalated the seriousness of the problem.
In many countries of the continent, people have to travel several kilometers to find the electricity they need to charge their phones which they depend on for communication with close family and access to business-critical information (like fertilizer or farm crop prices).
Entrepreneurs like Tanzania’s Patrick Ngowi are seizing the lucrative opportunities in Africa’s electricity problems. By focusing on solar energy, which is freely and abundantly available in Africa, Patrick has brought electricity to thousands of homes in his country.
To date, his company (Helvetic Solar Contractors), has installed more than 6,000 small rooftop solar systems in his country and four other East African countries – Kenya, Uganda, Rwanda and Burundi.
These rooftop solar products are used to light up thousands of houses at night. As a result, students can read for longer hours and do their homework while thousands of mobile phone batteries can be charged.
#6 – Waste
Photo credit: guardian.co.uk
Africa is losing its natural beauty and environment to different forms of degradation especially solid waste pollution.
According to the World Bank, Africa generates about 70 million tonnes of waste (both solid and non-solid) every year.
As the income and spending power of the average African continues to rise, more goods will be consumed leading to even more waste. The volume of waste generated on our continent is expected to double in the coming years as Africa’s economy becomes more prosperous and the size and population of its cities explode.
Apart from the dirty and unsightly look that heaps of waste are giving to several cities across Africa, poor waste management is closely related to, and largely responsible for, the outbreak of diseases. Apart from its undesirable effects, the way we handle and treat our waste will play a very significant role in managing Africa’s natural resources in the future.
Recycling waste (like kitchen waste, paper, plastic and metals) helps to reduce the pollution in our environment and provides jobs for thousands of people on our continent.
To tackle the menace of plastic waste in Nairobi (the Kenyan capital), Lorna Rutto, a former banker decided to start a small plastic recycling business. Her business uses plastic waste collected from dumpsites and garbage cans across Nairobi to manufacture fencing posts.
These posts, which are used to fence houses and forest reserves, are becoming a preferred alternative to timber. So far, her innovative business has created over 7,000 fencing posts, 500 new jobs, generated more than $150,000 in yearly revenues, saved over 250 acres of forests and removed more than 1,000 tonnes of plastic waste from the environment.
Another interesting business that is solving the problem of waste disposal in Africa is DMT Mobile Toilets in Lagos (Nigeria) – one of Africa’s most populated cities.
In its bid to reduce the public disposal of human waste, this business provides affordable access to toilet facilities in public spaces (bus parks, events, etc) across Lagos. To date, this company has manufactured over 3,000 mobile private toilets. It produces about 200 units every month for sale and for hire across Nigeria and in the West Africa region.
We looked at Africa’s waste problem in detail in our interesting article: ‘From Waste to Wealth – How to build a profitable business out of Africa’s huge waste market‘. You should read it!
#7 – Transportation
With millions of human cargoes and goods that are moved around in villages, towns and cities across Africa, transportation has become central to the functioning of Africa’s economy and basic survival on our continent.
With very bad roads, poor transport networks, absent rail lines and weak water transportation, the options for moving people and goods around on the continent are quite limited.
Although the roads are bad, people and goods still need to move around.
With a population that is growing faster than anywhere else on earth, transportation remains a problem of the present and future for Africa.
In spite of its challenges, smart entrepreneurs are rising to the occasion to solve everyday transport needs for millions of Africans. Motorcycles, taxis, buses, trucks and ferries are some of the ways of tackling the transportation problem.
In our very revealing article, ‘Moving people around – 5 Profitable businesses you can start to solve Africa’s human transportation problems’, we looked at the available and booming transportation options on the continent and how you can make a business out of them.
Our article on transporting goods and cargo is also quite informative. You can read it by following this link: ‘Trucking and Haulage: How to make money from Africa’s large and expanding transport market.‘
#8 – Shelter
After food, shelter is arguably the next most important necessity in our lives.
Shelter in this regard refers to housing accommodation, office space and public buildings.
The growing migration of Africans from rural to urban areas is putting a lot of demand on available housing in the cities and towns.
Another factor responsible for the shortage of housing accommodation in Africa is its fast growing population. By 2050, the number of people on our continent would have grown to 2.3 billion; this would mean that the current housing problem could worsen in the near future if nothing is done to solve it. (photo credit: un.org)
Seeing the huge opportunities and potentials in our continent’s housing problem, entrepreneurs like Nigeria’s Aliko Dangote, who is currently Africa’s richest man, has been making very significant investments in cement production, a very critical material in building construction.
Other building and construction materials like wood, glass, aggregates and steel have become hot-selling products. We took a close look at the lucrative potentials of this sector in our article: ‘Building and Construction materials – 9 Hot selling products that can make you money in Africa.’
Individuals, businesses and governments are making huge investments in Africa’s real estate market. Smart entrepreneurs are buying up undeveloped land around major cities in a bid to build their own houses and possibly earn rental income from tenants who need shelter too.
Other popular real estate investments are in office spaces and shops for traders.
How to make money in Africa: Do you still see problems instead of opportunities?
There is an abundance of amazing potentials and business opportunities in Africa for people like you to make money. The challenge is that most of these opportunities are buried inside tough and challenging problems.
It’s the same with everything in life.
It is the same with finding gold, diamonds or crude oil; there is usually a lot of hard and dirty work involved. Somebody has to dig or drill many metres into the belly of the earth to find these precious resources.
It’s also the same thing with Africa’s problems.
If you want to make money on our continent, you will need to roll up your sleeves and solve a serious problem. The tougher the problems you solve, the more money you are likely to make!
This article is intended to open your eyes to the possibilities around you.
Have you noticed a serious problem or suffering in your environment?
What have you been doing about it?
Blaming the government?
Well, now you know you should change the way you look at and react to problems. Problems are huge opportunities to make money. Find one and fix it!
Do you think there are some serious problems we left out?
Please share your thoughts in the comments section below.
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To your success!