15 Profitable Small Business Opportunities in Africa in 2023

In this article, we will take a look at the 15 untapped small business ideas in Africa in 2023. If you want to skip our detailed analysis, you can directly go to 5 Untapped Small Business Ideas In Africa in 2023.

The African region is becoming an attractive destination for investors and venture capitalists across the globe. According to a report by the United Nations Conference on Trade and Development, the African region boasts huge potential to become a key player in the technology sector, the automobile sector, the renewable sector, the healthcare sector, and the mobile telephone sector. According to the report, 60% of the region’s population is under the age of 25. A young population is extremely valuable for the African economy, particularly for the region’s technology sector.

The region is currently a dominant exporter of minerals used by the global medical industry, accounting for 12% of the exports. The African supply chain finance market rose by 40% between 2021 and 2022. These figures indicate that the African economy is striving to implement measures fostering long-term growth. The region has a long way to go, however, small businesses may play a pivotal role in speeding up economic growth in the region. You can also check out some of the safest countries to invest in or to start a business in Africa.

Business in Africa: At a Glance

South Africa was invited to join BRICS in 2010 after the country’s status was pushed as one of the largest emerging and rapidly developing economies in the world. As discussed above, the African region holds strong potential for growth. With that said, South Africa is one of the forerunners driving economic growth in the region.

However, the current economic status in Africa does reflect uncertainty. On October 4, Reuters reported that private sector activity in the region was relatively slower in September than in August. The S&P Global South Africa Purchasing Managers Index fell to 49.9 in September from 51.0 in August. The report suggests that this was primarily attributed to the country’s irregular yet frequent power cuts. However, despite that, the country did experience rising employment levels during the month.

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Power cuts and poor business infrastructure hinder growth, as is the case for South Africa. However, while power cuts have had jarring effects on business activity in Africa, the state’s investment in technology may be a ray of hope for the economy. On October 6, Reuters reported that the first virtual electricity transfer model in South Africa may go live by the end of next year. This investment will significantly improve the renewable energy capabilities of South Africa and reduce dependence and pressure on the state electricity utility, Eskom. Vodacom Group Limited (OTC:VDMCY) will execute the virtual electricity transfer model.

Prominent Names in the African Region

Investment in a company or region is a crucial decision. Lesaka Technologies, Inc. (NASDAQ:LSAK), MTN Group Limited (OTC:MTNOY), and Jumia Technologies AG (NYSE:JMIA) are some of the prominent companies in the African region. You can check out some of the other African stocks here.

Lesaka Technologies, Inc. (NASDAQ:LSAK) is a financial technology company based in South Africa. The company offers innovative solutions in the finance and banking sectors. On June 14, Lesaka Technologies, Inc. (NASDAQ:LSAK) published a comprehensive report on its offerings. The company particularly targets the informal economy and small businesses. The company offers retail merchants a point-of-sale device connected to a digital wallet, allowing them to sell their products and pay suppliers with a simple tap. Lesaka Technologies, Inc. (NASDAQ:LSAK) offers customers credit services, transactional banking, and microinsurance via its EasyPay Everywhere app and banking service.

MTN Group Limited (OTC:MTNOY) is a mobile telecommunications network operator in South Africa. On September 29, the company reported on its partnership with Accenture plc (NYSE:ACN) and Genesys. This partnership will significantly improve the customer experience for MTN’s subscribers through the integration of artificial intelligence capabilities and cloud-based solutions. Genesys’s Cloud CX platform is integrated with AI capabilities, understanding customer queries and providing crucial insights for better decision-making.

Jumia Technologies AG (NYSE:JMIA) operates as an online marketplace and provides services in logistics and payments. On October 2, Jumia Technologies AG (NYSE:JMIA) reported that they are set to expand internet services in Africa by collaborating with Starlink, a leading provider of satellite internet services. Jumia Technologies AG (NYSE:JMIA) will partner with Starlink to provide high-speed internet in African countries. Nigeria is first in line to receive coverage, followed by Kenya and other countries within the region.

These big names are enabling the African economy to become highly equipped with technology, providing enough opportunity for people to set up small businesses. With that, let’s discuss the 15 untapped small business ideas in Africa in 2023.

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15 Profitable Small Business Opportunities in Africa in 2023

15 Untapped Small Business Ideas In Africa in 2023

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Our Methodology

Coming up with a methodology for the title, 15 untapped small business ideas in Africa in 2023, was challenging. Therefore, we hypothesized that industries in Africa with a high growth potential would entail the most profitable small business ideas. We shortlisted 20 sectors applying a consensus approach from sources including McKinsey & Company, the UN, and the World Bank. These sources publish numerous reports on the business potential in the African Region and discuss industries that offer high growth potential in the coming years.

We then used the Africa MSME Pulse Survey Report 2023 to rank our sectors, compiled by GeoPoll, the African Talent Company, and Africa 118. The report entails the concentration of micro, small, and medium-sized enterprises (MSMEs) in different African industries. We picked the industries with the lowest concentration, as they are the ones that are “untapped”. We ranked the industries in descending order of the MSME concentration. We discussed the possible small business ideas under the industry headings.

15 Untapped Small Business Ideas In Africa in 2023

15. E-learning & Education

Percentage of MSMEs in the Industry: 13.6%

Growth demands education of an international standard. E-learning provides ample opportunity for small business owners in Africa to disseminate education. Vocational training, corporate-based training, and private tutoring through an online medium are some ways to make money in Africa.

14. Data Science & Storage

Percentage of MSMEs in the Industry: 12.1%

Data science is the future of the world, especially in the African region. Cloud computing and data storage capabilities are among the most profitable small business ideas. Services in cloud computing, data storage, and data analytics can be offered on a business-to-business basis.

13. Technology & Artificial Intelligence

Percentage of MSMEs in the Industry: 12.1%

The use of technology and artificial intelligence is gaining immense traction in the African region. As the population becomes more equipped with technology, there is a range of untapped small business ideas that could be offered in Africa. These include web development services, app development services, UI/UX design services, and AI services.

Lesaka Technologies, Inc. (NASDAQ:LSAK), MTN Group Limited (OTC:MTNOY), and Jumia Technologies AG (NYSE:JMIA) are some of the most prominent names making leaps in technological innovation in the African region.

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12. Media and Entertainment

Percentage of MSMEs in the Industry: 8.4%

Media and entertainment is another sector offering high growth potential to small business owners in the African region. Some of the untapped small business ideas in this sector may include the provision of social media management services, services in content creation, blogging, and influencer marketing.

11. Water Waste Recycling & Infrastructure

Percentage of MSMEs in the Industry: 7.3%

According to our methodology, water waste recycling and infrastructure were among the sectors with a lot of potential for growth. Small business owners can offer services for waste water collection and recycling, training and advocacy for hygiene, and producing water recycling equipment.

10. Recycling and Waste Management

Percentage of MSMEs in the Industry: 7.3%

The recycling and waste management sector may offer a range of small business ideas including waste collection, setting up a recycling center, setting up an organic compost business, and offering waste management services to businesses and households.

9. Retail and E-commerce

Percentage of MSMEs in the Industry: 6.4%

6.4% of small to medium-sized businesses were from the retail industry. The use of technology and online means of shopping is increasing in Africa. Small business owners can sell a range of goods through an online marketplace including handmade goods, agricultural products, fashion products, and electronics.

8. Agribusiness

Percentage of MSMEs in the Industry: 5%

Agribusiness entails all processes that go into agriculture and farming from production to marketing and distribution. Agribusiness offers a range of opportunities to small business owners. Small business owners can specialize in crop production, livestock farming, food processing, and agricultural services such as financial services, training, and insurance.

7. Fashion

Percentage of MSMEs in the Industry: 3.4%

The fashion industry in Africa offers a range of opportunities to small business owners. Business owners in Africa can set up an online clothing store, a fashion blog, an accessories business, and a conventional in-person boutique.

6. Beauty

Percentage of MSMEs in the Industry: 3.4%

According to our methodology, the beauty sector has a high potential for growth. Untapped small business ideas in this sector could include setting up a makeup artist business, a hairdressing business, offering skin care products, setting up a beauty blog, and offering pedicure and manicure services.

Some of the top African stocks to consider researching include Lesaka Technologies, Inc. (NASDAQ:LSAK), MTN Group Limited (OTC:MTNOY), and Jumia Technologies AG (NYSE:JMIA).

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Disclosure: None. 15 Untapped Small Business Ideas In Africa in 2023 is originally published on Insider Monkey.