6 Most lucrative industries in Africa (2024)

Over the years, Africa has been one of the most lucrative regions for both domestic and foreign business owners to invest in.

Currently, the continent is seeing a boom in ideas, technologies, and money that is driving an unremitting economic reformation.

The population, strength, and splendour of Africa are all growing. Her personnel and resources have a lot of financial potential. The amount of money the continent as a whole generates has significantly increased thanks to the economy of countries like Nigeria, South Africa, and Kenya, among others.

If the enormous wealth entering the continent are properly managed, many academics think Africa might become a significant economic power on the global stage.

 The continent’s economic prospects are excellent, although they vary.

The financial and telecom industries have employed millions of Africans. As a result, the growth ratio was significantly raised. 

Moreover, a quarter of all arable land on the planet is in Africa. But it doesn’t end there. Most African nations have at least one mineral deposit that significantly increases their GDP. The next investment opportunities, according to analysts, will be found in Africa.

So the issue is, what are the best sectors for investment in Africa?  In this post, we’ll analyze a few of these industries and their potential for development.

Most lucrative industries in Africa

1. Telecommunication industry

Due to the telecom sector’s rapid expansion, Africa’s economy is currently entering a new phase of growth. Only the wise will survive in this field because of how competitive it has become. Over 500 million telecom users are thought to exist across the continent.

Electronic transactions have been made possible by the telecom sector, which has also significantly boosted economic growth in other sectors. Due to the growing population of Africans, the number of telecom consumers is increasing every day. This has resulted in a separate demand for telecommunication services that has increased over time and seen a lot of investment. 

2. Infrastructure industry

The need for planned infrastructure projects on the African continent is considerable, as evidenced by rising FDI and government spending. Since the previous decade, infrastructure spending has increased dramatically, causing a noticeable gap between supply and demand.

According to the data, more investment is required in this sector if real GDP growth and fair access to public services are to occur. The past few years have seen a marked surge in infrastructure spending. 

By planning, establishing offtake agreements, being open to risk management rather than resisting it, doing feasibility studies, and having effective departmental coordination, most infrastructure projects in Africa may be turned into successes, according to a Mckinsey evaluation. 

African countries have recently shown astonishing readiness to transform into a continent with robust infrastructure. Over 42% of all investments in the sector were made by the government in recent years alone. The industry is anticipated to see significant FDI from all around the world due to a growing population.

3. Banking industry

In recent years, the banking sector has experienced incredible growth. It has transformed from a Western-inspired fashion trend to a sector that helps the continent’s economy. The banking sector has given Africans access to jobs and economic opportunities.

SMEs now have access to the capital loans they need to grow their businesses thanks to the rise of microfinance banks across the continent. Financial Technology is the most recent update. Banking has become more convenient and possible because of financial technologies.

PayStack is an illustration of a business that offers services outside of Nigeria’s borders. Just so you’re aware, this industry is seeing significant investment.

4. Oil and gas industry

Globally, several nations depend on African oil and gas. Oil and gas are in high demand since global demand for them rises daily. Many businesses and investors have become interested in projects in this sector. There is a historic push underway to build more refineries, onshore and offshore services, depots, and hire workers. 

Because of the expanding oil market, Dangote only recently put his refinery into operation. One-sixth of the top oil-producing nations in the world are located on the continent, which generated 9.6 per cent of global output in 2019, according to estimates. In terms of both worker productivity and inflation, the African oil sector experienced unprecedented expansion. While the latter declined, the former soared. Nigeria and Angola, among others, have been able to pique the interest of foreign countries interested in investing because of their substantial oil reserves.

5. Agriculture industry

The main economic sector on the continent is estimated to be agriculture, which contributes more than a hundred billion dollars annually or 15 per cent of the continent’s estimated GDP. According to reports, Nigeria and Egypt generate one-third of all agricultural goods in Africa.

Agricultural output in Africa can be higher, but its overall revenue is less than 10 per cent.  The African continent still expands each year at a pace of roughly 2-5 per cent notwithstanding the decline.  On the continent, agriculture was primarily practised to support the expanding population. However, the sector developed over time into a strong one, with new capacities for innovation, data analytics, the application of artificial intelligence, and machine learning for field tracking.

Rainfall occurs in Africa every two years, which promotes the growth of many different kinds of natural plants. The industry employs more than 60 per cent of the labour force in Africa and is estimated to generate 23 per cent of the continent’s GDP.

6. Textile industry

Before the arrival of the colonizers, Africa had a textile industry. While some African countries advanced with more textile industry, others competed in a lesser degree with smaller companies that thrived. There were lots of low-paying everyday workers in many different businesses. Since most textile works was done after harvest, it was done with unmatched quality and craftsmanship. 

Today, Africa provides a staggering 10 per cent of the cotton required by the globe. The Plateforme Industrielle d’Adetikopé in Togo was inaugurated, which aided in the localization of the textile value chain. About 50,000 tonnes of cotton fibre are expected to be converted into ready-to-wear apparel as part of the project.

Additionally, Cotonou, Benin, and Nook, Gabon are both economic zones established. These projects seek to encourage self-reliance at the heart of the textile industry, to enhance its global reputation.

Conclusion

Africa’s atmosphere is shifting; record-high stability, political sway, technical improvement, and a growing population have all contributed to the possibility of immediate growth. Africa has made investments in almost all emerging industries due to its capacity to exploit current resources without fully destroying them. New interest among stakeholders is also causing more money to pour into these areas.

A light of hope for the world economy is expected to emerge from Africa thanks to its large fertile land, human capital resources, and growing technology-driven economy. However, as an investor, or business entity, one must do thorough vetting and research to know when, where and how to invest in these thriving industries. 

What is the greatest industry in Africa?

The greatest economic sector in Africa is agriculture, which generates more than $100 billion annually or 15% of the continent’s overall GNP.