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12 Fastest Growing Industries in Africa This Year

October 21, 2024

12 Fastest Growing Industries in Africa This Year

Africa is experiencing significant growth across various industries, driven by a combination of factors such as population growth, urbanization, improved access to technology, and increased foreign investment.

This transformation is creating new opportunities for entrepreneurs, businesses, and governments across the continent.

In this blog post, we will explore some of the fastest growing industries in Africa, shedding light on the key drivers behind their expansion and the impact they are having on the continent’s economy.

12 Fastest Growing Industries in Africa

1. Telecommunications

The telecommunications industry is arguably the most rapidly expanding sector in Africa, with millions of people coming online each year. The widespread adoption of mobile phones and increasing access to the internet are transforming communication, commerce, and social interaction on the continent.

Key drivers

Mobile phone penetration: The rapid uptake of smartphones, particularly affordable models, has driven significant growth in the telecommunications sector. Many Africans now have access to the internet via mobile phones, allowing them to participate in the digital economy.
Mobile money: Services like M-Pesa in Kenya have revolutionized financial transactions, enabling millions of unbanked people to access financial services. This has led to increased demand for mobile networks and data services.
Foreign investment: International companies such as MTN, Airtel, and Orange have heavily invested in Africa’s telecommunications infrastructure, contributing to industry expansion and job creation.
5G networks: As African countries begin to roll out 5G networks, the telecommunications industry is poised for further growth, particularly in sectors such as fintech, healthtech, and edtech.

Telecommunications have been a key driver of economic development in Africa, providing essential infrastructure for businesses and enabling digital transformation across various industries. It has also fostered innovation, leading to the rise of tech startups and e-commerce platforms that are making significant contributions to the economy.

2. Agriculture

Agriculture remains the backbone of Africa’s economy, contributing to about 23% of the continent’s GDP and employing nearly 60% of the labor force. However, agribusiness—value-added agricultural activities such as food processing, packaging, and distribution—is the sector experiencing the fastest growth within the broader agricultural industry.

Key drivers

Population growth: Africa’s population is expected to reach 2.5 billion by 2050, driving demand for food. This is pushing the need for improved agricultural production and food processing capabilities.
Technology adoption: Digital solutions such as precision agriculture, data analytics, and mobile applications for farmers are increasing productivity and efficiency in farming.
Government initiatives: Many African governments are investing in agricultural infrastructure and providing incentives to boost local food production, reduce imports, and enhance food security.
Global demand: Africa is a major exporter of agricultural products such as cocoa, coffee, tea, and cotton. The growing demand for organic and fair-trade products in global markets is also driving the expansion of agribusiness on the continent.

The growth of agribusiness is contributing to job creation and rural development, helping to alleviate poverty and improve food security. It is also positioning Africa as a key player in the global food supply chain, with significant export potential.

3. Fintech

Fintech is one of the most exciting and fast-growing industries in Africa, with mobile money and digital payment solutions revolutionizing how financial services are delivered. The rise of fintech is helping to address the issue of financial exclusion, with millions of people gaining access to banking services for the first time.

Key drivers

Mobile money: Services like M-Pesa, Paga, and MTN Mobile Money have transformed the financial landscape, allowing users to send, receive, and save money via mobile phones. This has made financial services more accessible, particularly in rural areas.
Investment in startups: Africa’s fintech sector has attracted significant venture capital investment, with several startups securing funding to scale their operations and expand into new markets.
Digital payments: E-commerce platforms and small businesses are increasingly adopting digital payment solutions, further driving the growth of the fintech sector.
Government support: Several African governments are implementing regulations and frameworks to support the growth of fintech, recognizing its potential to boost financial inclusion and economic development.

Fintech is reducing barriers to financial services for millions of Africans, driving economic growth and fostering entrepreneurship. The sector is also creating jobs and providing new opportunities for innovation, particularly in areas such as microfinance, insurance, and digital lending.

4. Renewable energy

Africa has vast untapped renewable energy resources, including solar, wind, hydro, and geothermal power. As the demand for energy continues to grow across the continent, renewable energy is emerging as a fast-growing industry, offering a sustainable solution to Africa’s energy challenges.

Key drivers

Energy demand: Africa’s growing population and increasing industrialization are driving up demand for electricity, leading to investment in renewable energy projects.
Climate change: African countries are increasingly focused on reducing their carbon footprint and transitioning to clean energy sources to combat the effects of climate change.
Cost efficiency: The cost of renewable energy technologies, particularly solar panels and wind turbines, has decreased significantly in recent years, making them more affordable for both consumers and businesses.
International funding: Development finance institutions, including the African Development Bank and the World Bank, are providing funding for renewable energy projects, while foreign investors are also entering the market.

The renewable energy sector is helping to address Africa’s energy deficit, providing reliable and sustainable power to communities that previously had limited or no access to electricity. This is improving the quality of life for millions of people and supporting the growth of industries such as manufacturing and agriculture.

5. IT & digital services

The IT sector in Africa is experiencing rapid growth, with the rise of tech hubs and the increasing demand for digital services across the continent. From software development and data analytics to cloud computing and artificial intelligence (AI), the IT industry is driving innovation and digital transformation in various sectors.

Key drivers

Tech hubs: Cities like Lagos, Nairobi, and Cape Town have become major tech hubs, attracting entrepreneurs, developers, and investors. These cities are home to a growing number of startups that are leveraging technology to solve local problems and create new business opportunities.
E-Government: Many African governments are adopting digital platforms to improve service delivery and enhance efficiency in sectors such as healthcare, education, and public administration.
E-Commerce: The growth of online retail platforms like Jumia and Konga is driving demand for IT services, as businesses seek to optimize their operations and improve the customer experience.
Outsourcing: African countries such as South Africa, Kenya, and Egypt are becoming popular destinations for IT outsourcing, with companies offering services such as software development, customer support, and data processing.

The growth of the IT sector is creating new opportunities for skilled professionals, driving innovation, and enhancing Africa’s position in the global digital economy. It is also helping to improve service delivery in both the public and private sectors, contributing to overall economic development.

6. Healthcare

Africa’s healthcare sector is evolving rapidly, driven by population growth, rising incomes, and an increasing focus on improving healthcare infrastructure and services. The pharmaceutical industry is also expanding, with both local and international companies investing in the production of essential medicines and vaccines.

Key drivers

Population growth: Africa’s population is projected to increase significantly in the coming decades, leading to higher demand for healthcare services.
Government investment: Several African governments are investing in healthcare infrastructure and working to improve access to medical services, particularly in rural areas.
Private sector investment: Private healthcare providers and pharmaceutical companies are expanding their operations in Africa, seeking to capitalize on the growing demand for healthcare services and products.
Medical technology: The adoption of telemedicine, digital health platforms, and mobile health applications is transforming healthcare delivery in Africa, making it more efficient and accessible.

The growth of the healthcare and pharmaceutical industries is improving access to medical services, enhancing the quality of care, and addressing the continent’s burden of disease. This is not only improving health outcomes but also contributing to economic development by creating jobs and reducing healthcare-related poverty.

7. Tourism & hospitality

Tourism is a major contributor to Africa’s economy, and the hospitality sector is experiencing rapid growth as a result. Africa’s diverse landscapes, rich cultural heritage, and unique wildlife are attracting tourists from around the world, while increasing domestic travel is also boosting the industry.

Key drivers

Cultural and natural attractions: Africa is home to iconic destinations such as the Serengeti, Victoria Falls, the Pyramids of Egypt, and the beaches of Zanzibar. These attractions continue to draw tourists from around the globe.
Improved infrastructure: Many African countries are investing in transportation infrastructure, including airports, roads, and railways, to improve access to tourist destinations.
Business tourism: Africa is becoming a hub for conferences, exhibitions, and corporate events, particularly in cities like Johannesburg, Nairobi, and Lagos, leading to increased demand for hospitality services.
Government support: Several African governments are actively promoting tourism through marketing campaigns and visa reforms, aiming to attract more international visitors.

The tourism and hospitality industries are creating jobs, generating foreign exchange, and supporting local businesses such as restaurants, tour operators, and souvenir shops. These sectors are also helping to preserve Africa’s cultural and natural heritage by promoting conservation and sustainable tourism practices.

8. Real estate

The real estate and construction industries are booming in Africa, driven by rapid urbanization, population growth, and increasing demand for housing and commercial properties. Major infrastructure projects such as roads, airports, and industrial parks are also contributing to the growth of the construction sector.

Key drivers

Urbanization: Africa is experiencing one of the fastest urbanization rates in the world, with millions of people moving to cities each year. This is driving demand for housing, office space, and commercial developments.
Government projects: Many African governments are investing in large-scale infrastructure projects to support economic growth and improve living conditions for their citizens.
Foreign investment: International real estate developers and construction companies are increasingly looking to Africa as a high-growth market, attracted by the continent’s expanding middle class and rising demand for property.
Affordable housing: Several African countries are launching affordable housing initiatives to address the housing deficit and provide homes for low- and middle-income families.

The growth of the real estate and construction industries is driving economic development, creating jobs, and improving living standards across Africa. These sectors are also contributing to the modernization of Africa’s cities, with new residential, commercial, and industrial developments reshaping the urban landscape.

9. Oil industry

Africa is home to 1/6th of the top oil-producing countries in the world and contributed around 9.6% to the world’s output in 2019. During the first decade of this century, the oil contribution to the world supply was even higher.

However, as prices came to a standstill, production also followed the trend. Between 2000 to 2011, the African oil industry experienced unprecedented growth in terms of labor productivity and inflation- the former went up and the latter went down.

Countries like Nigeria and Angola have been able to attract investor interest due to their large oil reserves. Other popular countries include Gabon, Tanzania, Uganda, and Mozambique.

Despite having large oil reserves, Africa’s oil industry is not able to effectively realize its potential. Reasons include but are not limited to:

Lack of pipeline infrastructure and refinery capacity to enhance oil production
The huge distance between final consumers and processing sites
Gaps in investment to build up investor sentiment
Need for embracing digitalization to quickly acquire data for key decisions
Risk planning

Several positive events have also followed up the remarkable performance of the sector. For instance, countries like Ghana and Mozambique have recently entered the competitive ground with staggering production value.

The recent discovery of oil reserves and continuous exploration, closer proximity to Asian countries, and investment in newer processing units like the Coral floating Liquified Natural gas development in Mozambique are significant steps.

11. Transport sector

Africa’s journey to full-scale development rides high on its transportation sector. With the rising African population comes the trend of urbanization. As more and more people continue settling in popular urban areas, the transportation sector in Africa becomes even more attractive.

Logistics make up more than 70% of a product price in Africa, as compared to less than 6% in the United States. Decoding the logistics of the transportation sector, therefore, lies at the heart of new startups and companies.

The development of e-logistics in the continent has gained investment from companies like Google, mobilizing the vast population and commercial goods. The continent has established a fair share of air routes, port networks, rail networks, and road networks.

According to data, even with year-on-year growth in developing transportation routes, Africa currently has lopsided growth, e.g. majority of highway network in the continent is restricted to the Central zone.

There has also been slight reduction in terms of revenue from last year, driven primarily by Covid-related restrictions. According to African Union, the port infrastructure in the continent requires upgrades to ensure large-scale handling of passengers and bulk cargo.

Maritime ports in Africa handle almost 10% of the global trade. According to AfDB, cargo volume moving through these ports has tripled in the last decade. Therefore, the transportation sector has a lot of development to experience in the upcoming years with growth expected to more than just double.

11. Mining industry

Africa was probably the first continent to begin the process of iron ore extraction for painting on rock surfaces. 20,000 years ago, the Ingwenya mine in Swaziland (Southern Africa) was the first mine to be extracted. Later, the mines facilitated global trade led by European countries.

Post-independence, several countries took to 100% nationalization of the sector owing to the need for industrialization. However, the stakes were lowered eventually to facilitate inclusive growth and bring in the private sector for improved financial gains.

Africa is a major producer of some of the most precious minerals and metals in the world. From precious metals like Gold and Platinum to production-inclined metals like Iron and Nickel, the economy reeks of reserves in every region.

DR Congo is the third largest diamond producer in the world whereas Rwanda and DR Congo together form the biggest producers of Tantalum. The sector is an attractive one for FDI from various countries of the world.

Moving forward, a positive state outlook can be seen in the form of assistance offered to the industry. For instance, Both Uganda and Tanzanian mineral policies make it imperative for the sector to contribute to the national GDP. There is also growing public sentiment to participate in the growth of the mining industry.

12. Space industry

Like most of the world, the African space sector is government driven with year-on-year interest buildup from commercial players as well. Space activities have accelerated the growth of thousands of startups that continue to deploy spare faring for commercial gains.

The African satellite TV market has an edge with a bigger pie in terms of the total share. More than 250 startups have already started working towards the democratization of Space activities. The current value of the sector stands at more than $19 billion and is expected to surpass $22 billion by 2026.

Geospatial technology is gaining momentum with a push from both the private and public sectors. Earth observation (EO) technology provides a route for targeted delivery mechanisms and improved location maps.

The data is highly sought after by newer businesses whose entire business model stands on the shoulder of EO data tracked from satellite activity. The lengthy development time in the construction of large satellites becomes a road blocker.

The integration of IoT and early warning system can also strengthen the prospects of the industry for worldwide recognition and taking up of space programs. Investment can trigger innovation that propels growth and development in the right direction.

Conclusion

Africa’s economy is undergoing a remarkable transformation, with several industries experiencing rapid growth and creating new opportunities for businesses, entrepreneurs, and workers. The expansion of telecommunications, agribusiness, fintech, renewable energy, IT, healthcare, tourism, and real estate is not only driving economic development but also improving the quality of life for millions of Africans.

As these industries continue to evolve, Africa is well-positioned to become a global leader in sectors such as fintech, renewable energy, and agriculture. However, realizing this potential will require continued investment in infrastructure, technology, and human capital, as well as policies that support innovation, entrepreneurship, and sustainable development.

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