In recent times, Africa has emerged as one of the most profitable regions for local and foreign capitalists to invest in.

The continent is currently experiencing an influx of ideas, innovations, and revenue, propelling an unrelenting economic reformation.

Various sectors like Fintech, Agritech, Telecommunication and Information & Technology (I.T.) sector, Transport and logistics industry, and Mining industry have emerged as the mainstay of the African economy.

The economies of countries such as Nigeria, South Africa, and Kenya, among others, have prompted a significant rise in the amount of revenue the continent generates as a whole.

New market potentials coupled with the continent’s arable and resource-filled lands have led many experts to deduce that Africa could become a major economic player on the global stage, assuming the massive wealth pouring into the continent is properly managed.

According to leading investment platform, ARISE Integrated Industrial Platforms, while sectors like banking and finance remain crucial drivers of Africa’s economic development, new-age domains like I.T. and telecom are increasingly playing a critical role in Africa. Besides, with the pandemic re-emphasizing the need for modernizing healthcare and logistics, growth opportunities are virtually limitless. Some of the other active players in Africa include the real estate sector, fashion industry, automobile industry, and insurance industry.

Speaking further, ARISE IIP disclosed that Fintech, Telecoms, Transport and Logistics topped the list of thriving sectors, and industries to invest in Africa and what makes them tick.

“Several sectors tie directly into the population growth of an economy. Transport and logistics is one such industry. Interstate and overseas travel is at an all-time high, and local transportation has never been in such high demand. The same goes for logistics as there is more need for people to transport cargo.

According to a report last month by Business Insider Africa, Lori, a Kenyan e-logistics company digitizing haulage, has helped thousands of shippers and carriers move over $10 billion of cargo across the continent since its founding in 2017. This is one of the many logistics companies making huge strides in the African economy” the platform stated.

“Real estate is another market that is directly tied to the population rate of an economy. The more people there are, the more need there is for housing options, land ownership, real estate investments, and infrastructures. AfricaWorks, a flexible co-working space provider on the continent, is a prime example of what success looks like as a corporate real estate company. The company was recently listed as the 4th fastest growing company in Africa by Financial Times, proving that the real estate market in Africa is ripe for the taking.

Telecommunications: Unlike other continents, the internet penetration of Africa is deplorable, to say the least, which is why the future of this market seems very encouraging. As tech continues to become more accessible and affordable, more people within the continent would have no choice but to get with the times. Telecom companies are raking in billions of dollars in annual revenue. As of 2021, MTN Group, Africa’s largest telecommunications provider, had annual revenue of $5.6 billion with a userbase of 277.3 million subscribers; Orange Africa had $6.8 billion with a user base of 130 million subscribers, and Vodafone brought in $6.8 billion with a user base of 123,7 million subscribers. Telecommunications is a business that is here to stay” the platform added.

The platform also identified Agritech as a rather interesting sector to key into. It’s the sweet spot where agriculture meets tech, creating tech-driven solutions the African agricultural sector desperately needs. These digital solutions act like a ripple effect as more innovative young minds seek to make their contributions to growing this now lucrative industry. Just this year alone, Nairametrics reported the top 5 Logitech startups with the highest amount of funding received. Sitting atop that list was Nigerian agri-tech startup ThriveAgric which recorded the largest fundraising in the AgriTech sector, coming in at a whopping $58.15 million. Ghanaian-based Agtech Farmerline has also raised $12.9 million in equity debt to help farmers access quality supplies.

“The fintech explosion in Africa is large because the general African fintech wave followed the penetration of mobile phone technology. The growth of this sector is evident by the huge amount of funding it attracts each year. There are currently seven tech unicorns in Africa, with fintech unicorns being the majority. To name a few, Flutterwave, Chippercash, and Fawry are among the top fintech startups creating value that comes with solving real problems within large user markets. The space also includes ‘soonicorns’, or companies that are on their way to becoming future unicorns, such as TeamApt, and Kuda Bank.

The year 2021 saw more and bigger deals closed in Africa, as tech startups across the continent raised close to $5 billion. This amount was double the previous year’s investment and nine times what was raised five years ago, an indication of how much the startup scene has transformed over the last few years.

Fintechs dominated the fundraising, accounting for nearly $3 billion, or two-thirds of all the investment realized by startups across the continent last year, a report by markets insights firm Briter Bridges shows. This amount was also more than double the $1.35 billion investment that fintech in Africa raised in 2020, and triple the amount in 2019.

Among the largest beneficiaries of the fintech capital were Opay, which raised $400 million in Series C funding; Flutterwave, which got $170 million in a Series C round; and TymeBank, which raised $180 million in a Series B. Jumo and MNT Halan raised $120 million rounds, as digital payments gateway MFS Africa gained $100 million. This was as Zepz (formerly WorldRemit) raised $292 million in Series E financing, while Chipper Cash raised $250 million, Tala $145 million and Wave sealed $200 million in funding.

And, given the incremental funding for fintech in Africa over the years, capital injected into these startups is only likely to increase with deepening mobile phone usage and internet penetration.

Mobile subscriber penetration across the continent is predicted to increase by four percentage points to hit 615 million — half of the continent’s population — by 2025, according to the GSM Association. It is also poised for greater growth as the adoption of lending, digital payments, banking and insurance services grows.

Financial Technology Partners, an investment banking firm focused exclusively on fintech, in a past review of the sector in Africa said that the continent, with its rapidly growing population, some of the fastest-growing economies and an underdeveloped financial services ecosystem, presents an attractive opportunity for fintech.

“While the payment space begins to see scale-ups such as Flutterwave, Chipper, MFS Africa, Cellulant and Jumo playing alongside global, established providers such as Visa, Mastercard and Stripe, the next few years are likely to (in fact, we already do) see increased movements across other fintech verticals, from lending to KYC, SME management software, and decentralised finance. This, and greater M&A activity, as the ecosystem moves towards maturity and consolidation,” director at Briter Bridges Dario Giuliani told TechCrunch.

Read More: https://matrixliveng.com/why-fintech-telecoms-real-estate-topped-list-of-thriving-sectors-industries-to-invest-in-africa/