According to the African Development Bank (AfDB), more than 370 million people are in middle-class Africa. The increase for this demographic and the purchasing power is dependent on the fast-growing economic growth trajectory, diversifying economic activities like agriculture and a search for better-salaried jobs. Africa is home to 1.2 billion people and is the world's 2nd biggest continent. By 2030, the population growth is estimated to reach 1.7 billion, with spending reaching $22 trillion and the middle class growing to half a billion.
Despite the adverse effects of the COVID-19 pandemic on some of the continent's thriving sectors like the travel and tourism industry, fragile states with poor public healthcare systems have suffered the most. In preparing for future pandemics to mitigate business risk and ensure resiliency, some African nations have bolstered their economies by improving healthcare systems, focusing on digitalization and creating enabling business environments to attract more FDI amidst the challenges.
With most African countries heavily dependent on export commodities, there is a willingness and shift in diversifying exports to create domestic value and add to the global value chain. According to research, the AfCFTA promises better intracontinental trade, lifting 30 million Africans out of extreme poverty, increasing employment and wages, and Africa's income by USD540 billion by 2035 to add USD 76 billion to the global revenue.
The continent during the pandemic and post COVID-19 has created value from innovative adaptations, developed solutions to daily challenges and championed the VC ecosystem with startups from the continent disrupting for social impact. Agriculture, infrastructure, retail, fashion and beauty, construction industries are ambitious investment opportunities with fast profit returns.
Infrastructure sector: The continent has lags and deficits. Approximately 600 million Africans lack access to the electricity grid. With only about 47% of the population having access to running water and paved roads, the opportunities available to businesses and investors are myriad. With most African cities looking to build smarter cities, innovators, companies, and investors have a range of solutions to partner, collaborate and develop for the continent's growing population.
Consumer Goods and Retail sector: Jumia is an online shop for electronics, fashion, among other things targeting most African countries. Logistics services built into the platform enable shipments and delivery of packages to customers and involve different payment services. Jumia is an example of innovative solutions tackling delivery and logistics.
The continent has diversified platforms and mediums of delivery, payment services, and customer services. The growing middle class and higher purchasing power indicate the need for timely service delivery, faster customer feedback, and reliable logistic platforms. The business opportunities in this sector are enormous.
Agriculture Sector: This is by far the single most important economic activity on the continent of Africa, providing employment to about a third of its working population and contributing to about 29% of GDP. The continent is rich in unexplored arable lands, and markets are estimated to grow by 8% a year to 2025, this is according to an African Union report, 2018. The opportunities in the agricultural sector are open for innovation and growth to tackle Africa's hunger issues, ensure food security and contribute to climate change resiliency. New and improved farming methods and sustainability solutions are some of the areas being explored in the agriculture sector.
Digitalization and technology: The fastest rate of new broadband connections and mobile data traffic was recorded in Sub-Saharan Africa between 2008 and 2015. With more than a 120million active mobile money accounts, the estimated contribution to GDP by 2025 could exceed $300 billion. Countries like South Africa, Kenya and Nigeria are Africa's largest fintech hubs. South Africa has the largest fintech penetration. Nigeria tops the charts as the most diverse and dynamic fintech ecosystem, with a population of 200 million; the country has over 200+ fintech companies, according to a report by McKinsey & Company. In Kenya, fintech development has advanced due to the mobile money revolution M-Pesa. South Africa has 94% of people having regular access, 67% with a bank account, and over 100 mobile phones for every 100 people. This sector has enormous growth potential with advanced ecosystems, higher connectivity rates, a growing population and innovative companies ready to shape the fintech revolution in Africa.
Smart Cities Projects: Smart cities are transforming the continent's urbanization wave. Countries like Nigeria, South Africa, and Kenya rank in advanced and innovative smart city projects. Egypt is preparing to build a new capital city with smart city innovations and sustainable technologies at the forefront. Accommodation and housing deficits are challenges facing major African cities, among other problems. In Nigeria, for example, the deficit is about 17 million to solve its serious housing problem. Ghana is no exception, with a projected 5.7 million deficit by 2030. Will Africa's smart cities revolution be the solution to the continent's booming economy and urbanization? There's no doubt the opportunities in this sector are fast-growing.
Other trending industries include the manufacturing sector, media and entertainment industry, the creative industry, energy, mining, hospitality and tourism, financial institutions, logistics, healthcare, to name a few.