The Promising Sectors of Africa: A Focus on Agriculture, Renewable Energy, and ICT

Ebai Local Guide Consulting

Aug 25, 20234 min read

Africa is a continent of great potential and greenfield investment megaprojects, with a population of over 1.3 billion people, a young and dynamic workforce, abundant natural resources, and a growing consumer market.

Growing Opportunities and Challenges

Foreign direct investment (FDI) to African countries hit a record $45 billion in 2022 (UNCTAD, 2023), capturing especially $889 million in foreign direct investments (FDIs) in 2022 (Business in Cameroon, 2023). However, Africa is knocked down by several challenges, such as infrastructure gaps, political instability, climate change, health crises, and low productivity. These challenges require substantial investment to boost entrepreneurship (Campus Lebkiri, 2016). The strategies and policies used by countries to attract direct foreign investment are independent given the quality of legal, political, and economic institutions.

This article looks at recent data and trends and offers some insights into the market entry strategies for investors interested in tapping into Africa’s potential. While taking countries like Nigeria, Kenya, South Africa, Morocco, Rwanda, and Botswana into consideration, we highlight the potentials of such sectors as agriculture, renewable energy, and Information and Communication Technology (ICT).

Agriculture as a Promising Sector for Investment in Africa

Like in most African countries, in Nigeria and Kenya, rural households depend directly or indirectly on agriculture. The contribution of this sector to the overall economy might seem obvious that it should be a key component of growth and development (Ahmed D., 2016, p. 1). The advent of Covid-19 negatively affected the agricultural sector of Africa; yet agriculture acts as a catalyst in achieving sustainable development (Akuffo A., Gourlay S., Zezza A., 2021, p. 4). To boost this sector, Africa needs more investors in scientific and technological innovation to promote productivity and alleviate poverty (Fernando A.,2020, p. 1).

What are some leading companies in Africa’s Agricultural Sector?

Considering Nigeria, some of the leading companies in the agricultural sector include:

Olam Nigeria (a subsidiary of Singapore-based Olam International): It operates across various value chains such as rice, wheat, cocoa, cotton, cashew, sesame, and animal feed.

Flour Mills of Nigeria (FMN): This is one of the largest food and agro-allied companies in Africa (Maduawuchi Obialo, 2021). They aim to supply products of superior quality and value to the market.

Turning to Kenya, some successful companies in the country’s agricultural sector are:

Kenya Tea Development Agency (KTDA): It is owned by 600,000 smallholder tea farmers spread across 16 tea-growing counties in Kenya (KTDA, nd). It is one of the largest tea producers in the world in 2021 (Cheema, 2023, p. 1).

Del Monte Kenya: It is a subsidiary of US-based Del Monte Foods. It is also one of the largest pineapple growers and processors in Africa (Bomann–LarsenBomann–Larsen and Wiggen, 2004, pp. 161-162).

Brookside Dairy: It focuses on the manufacturing of milk and milk products. They aim to be the market leader in East and Central Africa (Brookside, nd).

Renewable Energy — Another Promising Sector for Investment in Africa

African countries are progressively getting industrialized and energy intensive. South Africa, for example, still depends highly on coal for electricity generation, although there are other energy sources such as wind and solar power (Carien du Plessis and Bhargav Acharya, 2023, p. 1). On the other hand, Morocco emphasizes renewable resources for electricity to reduce energy greenhouse gas emissions.

So, what are the leading companies in Africa’s Renewal Energy’s Sector?

The existence of some successful companies in the renewable energy sector in Africa shows how promising the sector is.

Looking at South Africa's renewable energy sector, some prominent companies include:

Enel Green Power: They facilitate and enable electrification and supply sustainable energy, taking care of people and the environment with a focus on delivering progress with sustainable energy (Enel, nd).

Mainstream Renewable Power (South Africa): This is the most successful company in the history of the country's renewable energy independent power producer procurement program (Curley E., 2023).

Energy resources offer attractive investment opportunities in renewable energy, especially in areas such as utility-scale projects, distributed generation, energy storage, and green hydrogen.

Information and Communication Technology (ICT) is Yet Another Promising Sector for Investment in Africa

Rwanda is one of the fastest-growing African countries in ICT, mobile technology, and application development. The country also hopes to become a regional centre for the training of ICT professionals (Kimanuka, 2009, p. 89-93). Likewise, Botswana has a high-tech industry and is home to several information technology companies with exports valued at about $16.2 million.

What are some successful companies in Africa’s ICT industry?

Some examples of striving companies in Rwanda and Botswana include:

Zipline: A company that has been successfully delivering blood and medical products using drones in Rwanda since 2016. The company has expanded its services to include food, retail and animal health products.

HENCE : The company provides a data and AI-related platform that matches firms to external legal service providers.

Viebeg: Operating in 4 countries and having access to over 400 healthcare providers, the company provides an AI-powered inventory management and procurement system to ensure that medical products are always available and accessible.

Anton Tech: Founded in 2020 in Botswana, the company operates a machine learning and deep learning distributed agri-tech solution. Their product connects farmers to value chain stakeholders (F65, nd)

Africa is made up of 55 countries, each with its unique characteristics, opportunities, and challenges. The individual countries continue to strive for improvement in the above-mentioned sectors. (Oluwole, 2022, p. 1). To this effect, foreign investors willing and able to invest in Africa should consider the specific context and dynamics of each country before making any investment decisions.

Key Areas of Opportunities Worth Considering

Enhancement of industrialization
Increasing agricultural productivity
Expanding renewable energy generation and access
Expanding access to electricity
Improving infrastructure, diversifying
Enhancement of human capital development
Leveraging digital technologies

All these make it possible for international organizations and companies in Switzerland and other parts of the world to play substantial roles through their investments.

Nevertheless, to meet up with the Agenda 2063 on African Development plans and goals, it is equally important for African countries to take into consideration the less promising sectors and work on them for better growth.

Have something to add about the promising sectors in Africa? Tell us in the comments. We love hearing from you!!