Africa: A diamond in the rough
Africa is an exceptional region with uneven patterns in economic growth, development, population distribution, and stability among member countries. The region is resource-rich, but its resource wealth is one of the lowest among the world’s developing regions. Africa is blessed with a vast amount of human capital, a burgeoning middle-class, and remains the fastest-growing continent. It is home to six of the world’s 10 fastest-growing economies, two of the world’s 10 biggest proven natural gas reserves, seven of the world’s 10 biggest proven natural diamond reserves, and host to the country with the highest fortune of metals and minerals-South Africa, indicating the region’s strategic importance on the global map. Based on the World Bank’s Doing Business Report (2019), five of the 10 most improved countries are in Africa. Although the region holds so much promise, it has struggled post-colonial era to achieve its full potential.
The region’s potential as a growth market for business is underestimated, as well as the potential for business to play a transformative role in solving the continent’s biggest challenges. This has left much of African resources untapped or under-utilized. A good example is a quantum of uncultivated arable land in the region, which Foresight Africa puts at 65 percent of the world’s uncultivated arable land. This means the region can achieve self-sufficiency in food production and be a major supplier to global food markets if the uncultivated land is put to good use.
Africa’s minerals industry is the largest in the world, with the world’s largest reserves of some mineral resources including cobalt, platinum, and bauxite, offering opportunities in the mining sector. The oil-rich region, which is considered a premier target for oil and gas exploration, hosts many under-explored basins, and the gradual gravitation of world powers towards de-carbonizing the environment and stabilizing the climate, brings the region’s natural gas potential (7.5 percent of the world’s proven natural gas reserves) into prominence.
There is no doubting the business potential of the region is huge in various sectors, including energy, infrastructure, agriculture, natural resources, and information and communications. Although, the dearth of infrastructure in the region is a constant dampener for prospective investors, the drive by African leaders to close the infrastructure gap is a masked opportunity which the Chinese government has tapped into through its Belt and Road Initiative (BRI) in Africa.
For entrepreneurs ready to proffer solutions to Africa’s extraordinary challenges, there is a tremendous opportunity for growth. The region’s biggest challenges offer valuable business opportunities to entrepreneurs across different spheres. Africa’s human capital abundance-led by Nigeria-makes it a toast of the retail industry. Also, an industrial revolution is underway in the region as the region’s heavyweights make major strides towards technological progress. Businesses will seek to ensure resource-efficient production, offering opportunities for industrial integration across seemingly divergent sectors. The impending industrialization has the potential to spur development in the region.
The big winners will be innovators that can remain committed for the long-haul, giving them the opportunity to understand the business climate and identify the barriers to their businesses. This will give them enough time to build resilience into their business models, in order to insulate their businesses against varying degrees of shocks that it might be vulnerable to.