Africa is one of the richest continents in the world

2022-12-27 18:37:10
Africa is one of the richest continents in the world

Africa is one of the richest continents in the world when it comes to natural resources. The continent has vast resources of valuable metals such as cobalt, gold, platinum, and coltan.

However, at the same time, it is also one of the least developed regions in the world, as years of colonialism, strife, political uncertainty, and conflicts have hampered the continent with the world's youngest population from growing.

However, Africa's young population and the continent's mineral resources are crucial to unlocking growth in the region. This is due to the fact that there is strong potential for several industries in Africa to grow in order for the continent to wean off from exports and produce its own food.

For instance, research from the Brookings Institution highlights that Africa has one of the strongest consumer goods industries in the world. This growth, as of 2018, had ended up outpacing the overall African gross domestic product (GDP) growth, as consumer expenditure grew by a compounded annual growth rate of 3.9% between 2010 and 2015 as it touched $1.4 trillion.

This growth won't stop there, as, by 2025 and 2030, the expenditure is slated to grow to $2.1 trillion and $2.5 trillion, respectively. Most of Africa's consumer goods companies are located in South Africa with some present in Nigeria as well.

Notable examples are Tiger Brands, RCL Foods and Flour Mills Nigeria.

Another key African growth industry is agriculture. According to Oxford Business Group, the majority of the African population is employed in agriculture, and the sector's massive potential is simply evident in the fact that 60% of the world's uncultivated arable land is in Africa.

To capitalize on this growth, agriculture technology companies are also growing in Africa, with estimates suggesting that for the first half of this year, African Agri tech startups received $95 million in funding - which marked a 58% annual growth.

These startups are using a host of different technologies to stimulate the African agricultural sector, to enable farmers to easily access finance, conduct data analysis, secure their inputs at the right time and the right price, access the right markets, and use global best practices in their plantations.

Some great African agricultural startups are AgriProtein, which transforms organic waste into animal feed; Releaf, which connects farmers with large companies; Cowtribe, which delivers livestock vaccines to farmers using last mile delivery; and Hello Tractor, which uses the Internet of Things (IoT) digital monitors on trucks that allows tractor owners to provide their equipment to farmers.

Finally, the growth in the African population will naturally lead to more users requiring access to communications services.

For instance, a research report from Mordor Intelligence estimates that the African telecommunications market will grow at a compounded annual growth rate (CAGR) of 11.2% between 2021 and 2026. It estimates that close to 300 million Africans use a mobile phone, with the market generating $90 billion in annual revenue.

Sub-Saharan Africa is witnessing aggressive infrastructure rollout as well, as 3G coverage stood at 70% in 2018. The use of telecommunications is not only for entertainment purposes, but it also allows farmers to pick out the right markets for their produce and for people in general to access better healthcare. Some of the largest Africa-based telecommunications companies are MTN Group, Safaricom, and Ethio telecom.

Source: Insider Monkey


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