Western markets are highly competitive, which motivates many entrepreneurs to move their businesses to the developing countries. Until recently, China and Southeast Asia were on the top of this list, but since most of the countries in the Far East have stabilised their economies in the last two decades, entrepreneurs have started looking for other prosperous developing markets. Many Western investors have recently started investing their funds in Sub-Saharan Africa.
Africa is not a single homogenous market, but we also can’t look at small African countries as completely separate economic entities. When talking about starting a business in Sub-Saharan Africa, we should always look it from a regional perspective.
For example, many Western companies are opening their African headquarters in Accra when they want to target Nigerian, Cameron or Ivory Coast markets. Ghana offers great networking opportunities, better business infrastructure and much higher standard of living than any other country in West Africa, which is why entrepreneurs prefer to locate their office there. At the same time, Ghanaian government provides great benefits to foreign investors, which is one of the most desirable incentives for the first time entrepreneurs.
In this article, we’re going to list some of the best business advantages that Sub-Saharan Africa provides to entrepreneurs and investors.
1 It’s great for running a digital business
Many digital entrepreneurs choose to live in African countries because the money they earn online is much more valuable there. A freelancer who does one-time gigs on websites like Upwork or Freelancer and earns from $500 to $1,000 per month can afford many different luxuries that would be inaccessible in the Western world. On top of that, expats and digital nomads also tend to travel a lot around the region, which allows them to get to know this wonderful continent and discover many great business opportunities.
2. Africa has a lot of skillful workforces
Many Westerners consider African schools and universities to be mediocre. This is the first prejudice you need to ditch if you are planning to start a business in Sub-Saharan Africa. Countries like Kenya, Nigeria, and Tanzania have great universities, both state and private ones. African students often receive grants from their government and various non-governmental organizations. They also take part in student exchange programs and make use of online learning resources.
To cut the story short, Africans who attend colleges and universities are not doing it because of fraternity parties or spring breaks, but because they want to improve their knowledge and business career. This tendency has been recognized by many software companies that employ experts in various Sub-Saharan countries. Crowdsource tester jobs have also been popular among the African tech students in the last couple of years because they allow them to earn additional income and practice their front-end UI design skills.
3. Affordable labour is easy to find
Although many big companies have already invested huge funds in African countries, these markets still offer plenty of affordable workforces. This trend is primarily influenced by the low standard of living and affordable prices, but also by the fact that population in African countries is incredibly young on average. Official figures say that more than 40% of the African population is below thirty. Still, many African countries are facing a fast rise in GDP, but in spite of this, the labour markets in Africa still offer high expertise at a very affordable price.
4. Africa is a growing market
In the previous paragraph, we’ve mentioned the fast GDP rise. African middle class is growing at a very fast pace, and they are looking for a good-quality and reasonably priced products. Although most entrepreneurs who build their production centres in Africa sell their goods on American and European markets, there are companies that have recognized the growth of African middle class and started offering products and services that they might like. One of these is Onyx-Connect, a South African company that is planning to produce a $30 smartphone and offer it to African consumers.
5. Plenty of resources
Africa is one of the richest continents when it comes to natural resources. We’re not only talking about mines here. The Sub-Saharan region is known for its fertile land and clean water resources. There’s also more sunny days than anywhere else on the planet. Apart from big corporations that have been sucking African mines dry for more than a century, today there are plenty of businesses founded by local entrepreneurs that use sustainable resources to equip inaccessible African villages with electricity and make them more prosperous and comfortable for everyday living.
In addition to all of the advantages that we’ve listed in this article, many African countries are actively trying to attract foreign investors. They are doing this by granting them a free land for building their office headquarters and production facilities and by providing them with tax exemptions in the first few years of their business development.
About the Author
Nate Vickery is a business consultant and an online author. He is mostly focused on streamlining startup and SMBs business processes. Nate is also the executive editor at Bizzmarkblog.com and a writer for The Next Web, Tech In Asia, among others.