15 Business ideas for Diasporans moving back to Africa
Many Africans migrate abroad for greener pastures but over time a lot of people start thinking about coming back home. Of course, they can’t go back home to nothing. This is why diasporans look for business ideas when moving back to Africa.
Africa’s population alone makes it a market with huge opportunities. According to a UNICEF prediction, Africa’s population will increase by 1.8 billion people. This means that business opportunities will continue to be on the increase.
People move abroad for opportunities for a better life and standard of living. But most start to feel homesick after years and even decades of staying abroad.
So many plan to move back home to settle down eventually. But what to do after coming back home you ask? What do they do with all the money they have gathered and saved up in the diaspora?
Here are 15 promising business ideas that you as a diasporan moving back to Africa can invest in.
While agriculture is the backbone of most African country’s economy, it, however, has not been fully exploited as a business opportunity. Every year, over 257 million Africans starve while 12 Africans die of hunger every minute.
Everybody knows that with every growing population, so does the demand for their needs increase. And with a population growth like Africa, this definitely sounds like a business opportunity.
The World Bank suggests that by 2030, the food demand in Africa could equal $1 trillion.
One of the factors causing this is the shortage of canned and processed foods. A knock-on effect of this is that food prices are high. This is because, at the moment, most food products can’t be transported to distant locations without expiring.
When this happens, produces increase their prices to make up for their losses.
This is just one problem. There are several agricultural opportunities you can still look at.
Pharmaceutical products, Medical Clinics and Healthy Food
Did you know 80% of African pharmaceutical products are imported? But the African pharmaceutical market is a rapidly growing one.
Covid 19, however, exposed the true situation of the pharmaceutical and medical industry in Africa.
Only a few African countries manufacture their own medicine while the majority of them import from abroad. While it may require billions of dollars to invest in, the profits earned sure are outstanding.
It is also not news that many of our medical facilities are substandard. Most don’t even have a good working environment.
Perhaps, the easiest of the three medical challenges mentioned is the healthy food industry. Yes, it would require a great deal of knowledge on the production side but it is still doable.
There are however several challenges to face. From funds to various government licenses and regulations. Not everyone might be interested in manoeuvring these barriers.
If you are thinking of investing in any of these industries, go for it. It is a good opportunity for anyone willing to invest.
Construction and Real Estate Industry.
The world is changing and so is Africa. Change is inevitable, you could even tell from the tall buildings sprouting from the ground up, from the roads now snaking their ways into villages.
Construction and real estate as industries bring in massive profits.
The African population is ever-increasing and this leads to serious housing deficits. Examples can be seen in Accra, Kampala and even Cape Town.
According to World Bank, the urbanization rate in sub-Sahara Africa is suggested to increase from 36 percent to 50 percent by the year 2030.
Day in day out, it is not uncommon to see roads or buildings being constructed. From cement to sand, beams, and even roofing materials, all these things bring in massive profits to investors.
With the knowledge of when to invest, where to invest and where to get the raw materials, the construction industry is definitely profitable.
‘Car dealers’ as we like to call it. The number of cars being imported into Africa will definitely shock you.
In Nigeria for example, you simply have to take a drive down to Tin Can in Lagos to see the number of cars being offloaded from shipping containers every day.
Every year, 28.45 billion dollars is spent on importing automobiles while the profits earned will shock you even more.
An advantage you have over people doing car business in Africa is your nearness to resources. By this, I mean depending on the country you are living in, you have a first-hand inspection of cars that are to be sold.
For example, let’s say you live in the US and you see a car for auction near you. You have the opportunity to see those cars live and know the true working condition.
This is different from car dealers from Africa who just buy cars and hope the condition is not worse than what was stated on the auction site.
Invest in Mobile Phone Market
Thanks to the marketing plan of smartphone manufacturers as well as the effort put in by importers, Africa’s smartphone market has experienced a boom over the years.
Companies like Transsion, the manufacturers of Tecno, Itel and Infinix are the leaders in smartphone sales in Africa for a reason. The strategy of offering their low-end devices at prices as low as $100 or less have made smartphones affordable for everyone.
Also, we have an increase in demand for fairly used phones.
The impact of social media on phone demands can’t also be underestimated. Almost everyone now has digital devices. Social networking sites such as Facebook, Twitter, Reddit, and WhatsApp have popularized them even further.
The things you can do with mobile devices nowadays are boundless.
Smartphones and other smart gadgets from all over the world have been flooding the African market with astoundingly huge profits gotten from it.
According to reports from the Nigerian Communications Commission, the mobile phone market in Nigeria is worth about N484 billion.
Should you want to invest, then an investment in the smartphone market is worth it.
Information Technology (IT)
The IT sector in Africa is one of the fastest-growing industries. Even the U.S. Department of Commerce identifies it as one of the fastest and most profitable sectors in Africa.
We live in an age where connectivity is a priority. Companies and governments are always looking for ways to make their systems more effective.
If you are currently an IT professional abroad, you will quickly find out that systems and technology there is far superior to those in Africa. Already you have a problem you can solve, you just have to take action.
Commercial Food Services
Clothe, housing, transport and food are three industries that stay evergreen.
Food services like restaurants nowadays have become a sure way of reining in profits. From the young to the old, everyone must eat. It is not uncommon in Africa to see new restaurants spring up one after the other.
All over Africa, you will find few fast-food restaurants dominating the food sector.
The profits made from these restaurants are jaw-dropping.
Delivery or Logistics services
Thanks to the growth of eCommerce platforms and the impact of social media vendors, the demand for delivery or logistics companies have increased enormously.
These days, it is not uncommon to sight delivery vehicles every time you go out. Everyone wants something delivered.
Delivery services are surprisingly making huge profits in Africa.
Nowadays, people opt to buy goods online be it within Africa or abroad then have them delivered to either their homes or workplaces at a certain fee.
Should you want to invest in a business, then delivery or logistics service is worth looking into.
Invest in Education
Did you know that the under 18 demographic represents one-third of the African population?
This means that the education sector is a big potential market.
Also, thanks to the poor state of public schools, most people strive to send their kids to privately owned schools.
Investing in education, more so, in the private sector certainly does bring quite a lot of profits.
With the teacher to student ratio at the public schools being 1:60. Most parents opt to take their children to schools where there is no scramble for resources. Where their children’s needs will be catered for easily.
This opens up a lot of opportunities for new schools to enter the market.
Hair, Beauty and cosmetics products
The growth of the beauty and cosmetics industry over the years is truly phenomenal.
According to Euromonitor International, the beauty industry is worth about $25.4 billion in the Middle East and Africa. They also suggested that the market will grow by 6.4 percent over the next four years.
Reports have also estimated the market for weaves, hair extensions and wigs at over $6 billion a year.
All over Africa, there is a huge demand for hair, cosmetics and beauty product with profits earned being triple the amount invested.
Perhaps even more surprising is that these industries have not peaked in Africa. The global personal care industry is worth about $400 billion with Africa representing only a 3% share of this.
There is still significant room for growth and money to be made here.
Join The Fashion Industry
The fashion industry is huge anywhere in the world and it is no different in Africa.
Did you know that the footwear and apparel market in Africa is estimated to be worth about $31 billion?
The industry is worth about $2.4 trillion globally.
When you look at the African population, you will realize that there is still so much money to be made from this industry. Like many industries in Africa, people are only just starting to understand the true worth.
Imports of used clothes, bags and shoes have been found to make tremendously huge amounts of profits.
Perhaps there is no emerging industry that is making as much rave as the fintech industry in Africa right now.
A testament to this is that as of 2018, Africa had only one unicorn startup company, Jumia.
In 2021 alone, the continent has seen 3 unicorn startup companies. Flutterwave, Interswitch and Fawry are the three companies to achieve unicorn status this year.
There is no other industry in Africa that is getting as much international capital and backing as fintech at the moment.
This boom in the industry is however not surprising.
Did you know that more than 60% of Africa’s adult population are unbanked?
Over 350 million African adults own smartphones but a high percentage of them do not have a bank account or access to formal financial services.
The market here is huge.
The growth of apartment hotels in Africa is rather sudden but unsurprising. Africa’s real estate sector itself remains a prime industry and is ever-growing.
Apartment hotels which is a real estate niche is still an emerging market in Africa. The huge demand for it is however easy to understand.
Apartment hotels are fully furnished apartments that offer the comfort and privacy you can get in your very homes.
Serviced apartments can also cost 20-30% less than an equivalent extended stay at conventional hotels.
Apart from comfort and privacy, global business travel is also a driving factor for the rise in serviced apartments. This market is estimated to spend more than $1.2 trillion annually.
Supermarket (Grocery Retail Sales)
The supermarket industry has always been a lucrative one. It is not uncommon to see various minimarts almost everywhere you go.
Food is an essential part of our everyday lives and the demand for it will always be high.
It is also not uncommon to see multi function supermarkets with sectors divided into grocery, fashion, pharmacy and the likes. Supermarkets are popular for bulk and cheaper buys.
In 2017, Nigerians spent $44 billion on food with grocery sales accounting for 75% of it.
In the same 2017, the value of grocery retail sales in South Africa was about $44.9 billion.
Keep in mind that there have been more demand for food since then and the effect of inflation and recession.
The biggest aspect to be considered when opening a supermarket isn’t only capital. Your location probably plays the biggest part in the survival of your business.
You must choose a prime location.
Importing and Exporting
The importing and exporting industry has always been huge. With a little research, you can become an importer or exporter in no time.
Importing business can allow you to do business in your home country without really staying there. All you have to do is find products that you know is in demand in your host country and begin from there.
You have to be careful of greed when you start though. It is best for you to focus on only a few products so you don’t spread yourself too thin.
You can also choose to find products in Africa that you can export abroad.
If you are dealing with farm produce, for example, you can either export raw materials or processed commodities.
Products like coffee, honey, Shea butter and flowers are available at cheaper prices in Africa. You can take advantage of that.
Also, exporting from Africa is cheaper than importing back to Africa.
All you need to do is to source for reliable companies in your home country that you can sell to.
Go east or go west home is always the best. Home is where our roots are. While most African countries are underdeveloped, it is a continent rich in resources. The population alone makes it one of the fastest-growing consumer markets in the whole world. There is a market for virtually any business you want to do in Africa, all you have to do is decide. Over time it should become a worthy investment.