Top 5 sectors and industries to invest in in Africa as population rates increase

Several sectors are directly linked to population growth in the economy

The continent is currently experiencing an influx of ideas, innovations and revenues that are driving inexorable economic reform.

Africa is growing in population, splendor and strength. There is great financial potential in both its people and resources. Economies of countries such as: Nigeria, South Africa and Kenya resulted in a significant increase in revenues generated by the entire continent.

The new market potential, combined with the continent’s arable land and resource-rich areas, has led many experts to conclude that Africa could become a major economic player on the international stage, assuming the vast wealth flowing into the continent is properly managed. So the question is: what sectors are currently the most lucrative to invest in? Read on to find out…

1. Transport and logistics: Several sectors are directly linked to population growth in the economy. One such industry is transport and logistics. Interstate and international travel is at an all-time high, and local transport has never been more popular. The same applies to logistics, as there is a greater need for people to transport cargo.

As reported last month by Business Insider Africa, Lori, a Kenyan e-logistics company focused on digitizing transportation, has helped thousands of freight forwarders and carriers transport over $10 billion worth of cargo across the continent since its founding in 2017 . It is one of many logistics companies making huge strides in the African economy.

2. Real estate: Real estate is another market that is directly tied to an economy’s population rate. The more people there are, the greater the demand for housing options, land ownership, real estate investment and infrastructure. AfricaWorks, a flexible coworking space provider on the continent, is a prime example of what success can look like for a corporate real estate company. The company was recently recognized by the Financial Times as the fourth fastest growing company in Africa, proving that Africa’s real estate market is ripe for takeover.

3. Telecommunications: Unlike other continents, Internet penetration in Africa is, to put it mildly, deplorable, so the future of this market seems very encouraging. As technology becomes more available and affordable, more and more people on the continent will have no choice but to move with the times.

Telecommunications companies rake in billions of dollars in annual revenue. As of 2021, MTN Group, Africa’s largest telecommunications service provider, had annual revenues of $5.6 billion and a user base of 277.3 million subscribers; Orange Africa had $6.8 billion on a user base of 130 million subscribers, and Vodafone earned $6.8 billion on a user base of 123.7 million subscribers. Telecommunications is a business that is here to stay.

4. AgroTech: This is quite an interesting sector worth exploring. It is the perfect place where agriculture meets technology, creating the technology-driven solutions that Africa’s agricultural sector desperately needs. These digital solutions act as a ripple effect as more innovative young minds seek to contribute to the growth of this now lucrative industry.

This year alone, Nairametrics has listed the top 5 Logitech startups that have received the most funding. Topping the list was Nigerian agricultural technology startup ThriveAgric, which recorded the largest fundraising in the AgriTech sector, reaching a whopping $58.15 million. Ghana-based agtech Farmerline also raised $12.9 million in equity debt to help farmers access high-quality supplies.

5. Fintechs: The fintech explosion in Africa is big because the overall fintech wave in Africa followed the penetration of mobile phone technology. The growth of this sector is visible in the huge amount of funds it attracts every year. There are currently seven tech unicorns in Africa, the majority of which are fintech unicorns.

To name a few, Flutterwave, Chippercash and Fawry are among the top fintech startups creating value by solving real problems in large user markets. This space also includes “sooncorns”, i.e. companies that are on track to become future unicorns, such as TeamApt and Kuda Bank.