Unlocking Africa’s Business Potential: A Panoramic Overview for Investors
Africa has increasingly positioned itself as the next frontier for global business expansion. In recent years, investors worldwide have taken note of the continent’s economic dynamism, youthful markets, and abundant opportunities. Yet alongside this promise comes complexity – a diverse patchwork of 54 countries, each with unique conditions. As Eddie Ueckermann, International CEO of Tsebo Solutions
Group, aptly observes, “Africa’s immense potential continues to attract global business attention; yet, successfully navigating this diverse and complex market requires a nuanced, strategic approach.” Uekermann oversees several of Tsebo’s businesses across diverse sectors on the African continent, including ATS, Tsebo’s Remote Site and Camp Solutions business, which has established a strong track record of successful operations, particularly within the African mining sector.
Key Investment Trends in Africa
Africa’s business landscape is marked by robust growth and innovation. Several African economies are among the fastest growing in the world; in fact, nine African countries rank among the global top twenty for GDP growth in 2024, according to the IMF. This underscores how Africa is becoming a key player in global trade and investment. Growth is buoyed by revitalisation in multiple industries – energy, infrastructure, agriculture, and commerce are all poised for long-term expansion as demand and investment surge.
Natural resource projects continue to attract capital, leveraging a continent that holds 30% of the world’s mineral reserves. At the same time, Africa’s technology and innovation scene is flourishing. The rise of fintech, mobile money, and startup ecosystems has been dramatic – African tech startups collectively raised over $5 billion in funding in 2023, indicating sustained investor interest in homegrown innovation. From Nairobi to Lagos, a new generation of entrepreneurs is harnessing mobile connectivity and creative business models to leapfrog traditional solutions. Overall, the trend is clear: Africa’s economic narrative is shifting toward growth and innovation, making it a compelling arena for business investment.
Ueckermann highlights the advantages of doing business in Africa:
- Investors are drawn to Africa by a confluence of compelling advantages: Massive Market Potential: Africa boasts 1.2 billion consumers and the world’s largest free trade area under the African Continental Free Trade Agreement (Reference: worldbank.org)
- Rapid urbanisation and a rising middle class are fuelling demand for everything from consumer goods to financial services across this vast unified market.
- Demographic Dividend: The continent has the world’s youngest population – the median age is about 19. This youth bulge is translating into a growing workforce and customer base; by 2030, half of all new entrants into the global labour force will come from sub-Saharan Africa, creating a huge talent pool and driving consumption for decades to come.
- Resource Wealth: Africa is richly endowed with natural resources, from minerals and oil to arable land and sunshine. It holds 30% of the planet’s mineral reserves (e.g., gold, diamonds, uranium) and significant oil and gas deposits (Reference: africaoutlookmag.com). These resources underpin strong opportunities in mining, energy, and agriculture and offer a foundation for industrial value addition.
- Innovation & Leapfrogging: In many sectors, Africa is bypassing legacy systems and adopting cutting-edge solutions. The continent leads in mobile money adoption (e.g. Kenya’s M-Pesa) and is a hotbed for fintech innovation. Venture funding is diversifying into cleantech, agritech, e-commerce, and more, reflecting a broad landscape of innovation that can solve local challenges while yielding scalable business models.
Challenges of doing business in Africa
“Doing business in Africa also comes with notable challenges that firms must navigate with care,” says Ueckermann.
- Infrastructure Gaps: Persistent infrastructure deficits raise costs and complexity. Around 60% of sub-Saharan Africans lack access to electricity, and only 25% of roads are paved, constraining logistics and connectivity. This translates to a huge infrastructure investment need – an estimated $130–$170 billion per year, with a financing gap of up to $107 billion. Companies often must invest in their own power, water, or transport solutions to operate efficiently.
- Regulatory Complexity: Africa’s 54 countries present a patchwork of regulatory environments. Navigating varying legal systems, tax regimes, and bureaucratic procedures can be complex for investors. Cross-border expansion may involve dealing with fragmented markets and compliance requirements in each jurisdiction. However, initiatives like the AfCFTA are gradually working to harmonise trade rules and reduce barriers. Staying agile and well-advised on local regulations is essential.
- Political and Security Risks: While many African countries enjoy stability, some regions pose political risks. Twenty-two African nations are classified as fragile or conflict-affected states, and recent events like coups or unrest in parts of West and Central Africa highlight potential volatility. Investors must gauge country-specific risks such as governance issues, policy uncertainty, or currency instability. Adequate due diligence, diversification, and sometimes political risk insurance are prudent measures given the varied risk landscape.
Case Study – ATS: Succeeding Across African Markets
One company that has thrived by skilfully balancing Africa’s opportunities and challenges is ATS, a remote site and camp solutions partner operating in 27 African countries. Founded in 1996 in Ghana, ATS has grown into a pan-African partner for businesses in mining, energy, and other sectors that operate in remote or logistically difficult locations. The company has built a reputation for “working in the most remote locations in Africa and overcoming every obstacle the continent can muster,” notes Ueckermann.
ATS’s success offers a valuable example of strategies that work in Africa’s complex markets:
- Localisation: ATS hires, trains, and empowers local talent in every country, and sources supplies locally whenever possible. By nurturing local expertise and understanding cultural nuances on the ground, the company builds trust and operational resilience. “The key is to understand the local market and the diversity of cultures to sustain business and enable growth within the communities we operate in,” explains Ueckermann. This localisation ethos also extends to a network of over 500 local suppliers that ATS has developed, boosting local economies while securing its supply chain.
- Community Engagement: Deep engagement with local communities is central to ATS’s strategy. Through its Legacy Programme and other initiatives, ATS invests in community development projects ranging from education and healthcare to agricultural support. In the past decade, ATS has invested more than $120 million into the communities where it operates, creating shared value and goodwill. This long-term community partnership approach helps ATS secure its social license to operate and creates a positive impact beyond the workplace.
- Sustainability: Operating sustainably is both a value and practical necessity for ATS. The company integrates Environmental, Social, and Governance (ESG) objectives into its operations – for example, working with local farmers and vendors not only supports community livelihoods but also reduces carbon footprint through shorter supply chains. ATS focuses on waste reduction, efficient resource use, and initiatives like community agriculture projects, aligning growth with social and environmental responsibility.
- Energy Solutions: In Africa’s infrastructure-constrained environments, ATS has developed in-house expertise to solve energy and utility challenges for clients. It provides reliable off-grid power solutions and energy optimisation services at remote camps, leveraging efficient generators, solar hybrid systems, and innovations to ensure uninterrupted operations. By addressing power and water needs proactively (often through sustainable technologies), ATS reduces one of the major barriers in remote African projects.
- Customer-Focused Innovation: Finally, ATS credits its customer-centric mindset as a key to its longevity. The firm continually adapts its service offerings to meet client needs – whether that means rapidly scaling up a camp’s capacity or adjusting menus to suit cultural tastes. “ATS is client-focused and not only profit-driven… To do this, we need to quickly adapt to change and provide the support needed by our clients,” notes Ueckermann of their partnership approach.
This agile, problem-solving culture drives innovation in service delivery, from menu planning apps to custom facility designs, helping ATS stay ahead of competitors and deeply integrate with its clients’ objectives.