UK business leaders eyeing Africa for growth opportunities
In addition to its great wealth in resources, Africa is home to vibrant economic centres, young populations, and loads of business opportunities. Analysis from Strategy Management Partners among UK business leaders in medium to large companies has found that 50% already operate in Africa and 28% are interested but may be unsure of the best entry strategy.
Africa now stands at a critical turning point. Though many regions may still carry the negative connotations of being mainly a source of raw materials, there is a growing realization (especially from UK business leaders) that good things will come of the continent’s rapid innovation and increased regional integration.
Business success will depend on loads of different factors, considering Africa is made up of 54 sovereign nations with different governments, legal systems, and local contexts. There is obviously a world of difference between war-torn and struggling nations like Somalia and Sudan to the flourishing and promising economic centres in Rwanda, South Africa, or Morocco.
But if one thing is true of the continent overall, it is that there is a growing determination for transformation – and there are real opportunities in many different industries.
Opportunities in many sectors
The opportunities across Africa focus on what the continent has always promised – in particular, abundant mineral reserves, fertile land, and a huge and growing population. Many African nations are home to very young populations with millions of digital natives.
In fact, the technology sector is where UK business leaders see the most promise, according to the survey. A total of 59% said that tech presents the most opportunities for investment and opportunities, with 46% pointing to oil and gas, and 41% to renewable energy.
Respondents indicated that the size of market opportunities and consumer demand were the top factors that would positively influence their decision to expand into Africa. Other very important factors are reliable energy, educated and affordable talent, and efficient transportation infrastructure.
Indeed, there is clearly a need in many African countries to improve energy supply. For example, there is a total lack of energy infrastructure in many rural parts of the Democratic Republic of Congo – a country in which many international companies operate mining and logistics businesses. Many other parts of Africa also lack power in rural areas, with unreliable power in some major cities.
Foreign direct investment
If Africa is to attract a larger amount of investment and foreign business, many regions will also need to make big improvements to roads, ports, and airports. Overall, a favourable macroeconomic environment could also be a deciding factor for foreign businesses. That includes low interest rates, low inflation, stable exchange rates, and seamless cross-border transactions.
FDI inflows to Africa rose by 75% to reach $97 billion in 2024, largely driven by a 277% surge in FDI to North Africa, fuelled by major energy (including renewables) and transport infrastructure projects. Egypt was ranked first in Africa and 9th globally in terms of FDI received in 2024, with $4 billion from Qatar for a sprawling tourism city, for example.
Increasing FDI to the relatively neglected Sub-Sahara African regions requires targeted projects and reforms to strengthen investment fundamentals, improve regulatory certainty, and deepen regional integration. These efforts can also be complimented by mobilising domestic institutional capital for infrastructure development, which would help stimulate investor confidence and support long-term economic resilience.
“Africa presents one of the most promising growth opportunities of the next decade and is now firmly on the radar of UK businesses,” says Muibat Ijaiya, partner at Strategy Management Partners.
“Business leaders are increasingly seeing Africa as a long-term strategic priority. But the realisation of that potential will depend on both private sector adaptability and government investment in enabling conditions – from infrastructure and talent access to regulatory reform.”
